As the gig economy continues to evolve, the people who keep it running, the gig workers, face significant challenges. They are often drawn to the flexibility and potential of earning higher income but find themselves without the crucial safety nets provided by traditional employment. This blog post explores the precarious relationship between gig workers and employee benefits, underlining the pressing need for innovative solutions.
Defining the Gig Worker:
Before delving into the intricacies of gig work and its implications, it’s essential to define what a gig worker is. A gig worker is an independent contractor, a freelancer, or a part-time worker who is paid for each “gig” they do rather than receiving a salary or hourly wage. This can include everything from driving for rideshare services like Uber, delivering food for companies like DoorDash, or offering specialized skills on platforms like Fiverr or Upwork.
The Study’s Findings:
A broad study sponsored by Legal & General, “U.S. Gig Economy, Part 4: Gig Workers Aren’t Meeting Their Health, Life Insurance Needs,” has shed light on the hardships these workers face. The study revealed that 48% of gig workers reported that their work negatively affected their ability to access health insurance. Even more alarming, nearly 23% of gig workers have no health insurance at all.
This lack of insurance coverage results in gig workers ignoring minor health issues due to cost, which can quickly escalate into serious health problems. During the pandemic, almost half of the gig workers surveyed claimed that their work negatively impacted their access to paid time off, further exacerbating their precarious situation.
Beyond health insurance, the study also highlighted other key social and financial safety nets that are poorly represented among gig workers, such as life insurance, disability insurance, and retirement savings. Only 4 in 10 of those surveyed have life insurance, even if they had a child or partner, while 33% said gig work negatively impacted their access to disability insurance—and 53% said the same about retirement savings.
The Path Forward:
While the gig economy offers flexibility and potentially higher earnings, it’s clear that it has a long way to go in providing the benefits traditionally associated with full-time employment. It’s a problem that cannot be solved by gig workers alone – employers, policymakers, and other stakeholders must come together to develop innovative solutions that can create a more equitable and sustainable gig economy.
For example, digital platforms could be developed to help gig workers access affordable health insurance, retirement planning, and other benefits. This could involve partnerships between gig work platforms, insurance providers, and financial institutions.
Another potential solution is the creation of portable benefits systems, where benefits are tied to the worker rather than the job. This would allow gig workers to carry their benefits with them from job to job, providing a level of stability and security that is currently lacking.
The gig economy presents a significant shift in how we perceive and execute work. While it offers many advantages, it also surfaces glaring issues related to employee benefits. It’s crucial that we find ways to address these issues and create a more equitable and sustainable gig economy for all. The future of work is here, and we need to ensure it’s beneficial for everyone involved.
