Coronavirus Will Hit Gig Workers Particularly Hard
About a quarter of U.S. workers are in the fast-growing gig economy, doing work often linked to tech platforms like Uber and Lyft that classify workers as independent contractors. Many gig workers do not have health insurance and that could be bad for everyone in the time of coronavirus.
The gig economy has been good for U.S. growth, Financial Times reported. The creation of new tech-related gig jobs has helped push U.S. unemployment to 50-year lows. It may also have kept inflation and wage growth down, enabling the Fed to keep interest rates low.
But there’s a dark side to gig work in the U.S. — insecurity. Gig workers usually don’t have the safety net that European enjoy including access to national medical insurance, sick pay and unemployment benefits.
In the gig economy, companies use a loophole in employment law to claim their workers aren’t employees. Instead, they are classified as independent contractors, implying they have the same control, freedom and negotiating power as self-employed plumbers or business consultants.
In reality, gig economy workers usually have most of the risks and costs of running a business, while the company enjoys most of the control and rewards, Emily Guendelsberger wrote for Washington Post.
Here’s why the U.S.’s weak safety net matters. There are 27.5 million Americans without health insurance. This creates medical risks with the coronavirus. The cost of testing and treatment will deter some Americans from seeking care if they get sick. The media are abuzz with stories of ridiculously high coronavirus-related medical bills. A Miami man says he was charged $3,270 for a voluntary coronavirus test. An American evacuated from Wuhan, China says he was charged $3,918 bill for mandatory quarantine in San Diego.
In the insecurity of no health insurance, sick gig workers may keep on working. The coronavirus has already caused a downturn in travel, tourism, retail and manufacturing. Low-paid contingent workers will be hit especially hard, according to Financial Times.
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About 40 percent of U.S. families could not come up with $400 in an emergency.
Congress could make coronavirus testing, quarantine, and treatment free for all U.S. residents without insurance, Financial Times suggested:
“That would deliver far more impact and reassurance than the vague pledge of $1 billion in loan subsidies to small companies in Wednesday’s bill. But American leaders must start a proper debate about creating a better longer-term safety net for gig workers.”