Retirement, paid sick days, a steady schedule — in theory, these should be a given for all working people. In practice, not so much.
Right now, a little over 10% of the American workforce is part of the “gig economy,” according to the UC Berkeley Labor Center, which means that most or all of their main income comes from work they do as independent contractors or through temp, on-call, and contract work.
They aren’t guaranteed direct deposits, they don’t get paid-time off, and they often have to grapple with stagnating wages and self-employment taxes. Plus, there is no employer contribution when it comes to saving for retirement and health care coverage.
This means that health care can also get expensive quickly. Full-time employment versus contract employment is the difference between putting an average of $89 a month toward the health care benefits provided by your company and paying an average of $396 a month for coverage on your own.
Making matters worse, many low-earning contractors or gig economy workers are among the 55% of Americans that live paycheck to paycheck. This means that they don’t earn enough to build a safety net in case of an unexpected emergency. According to a report by the Federal Reserve, nearly half of Americans struggle to scrape together even $400 when something unexpected comes up — like car trouble.
The solutions available during these times of emergency, such as borrowing from friends and family or payday lending, can be inaccessible or predatory, which means that these workers are often forced to make an impossible choice between feeding their family or fixing the car.
There’s a clear need for a safety net for these workers — that’s why one organization, The Workers Lab, is working tirelessly to provide it.
Supported by The Rockefeller Foundation, The Workers Lab funds experiments and innovations that build power for working people.
