The past decade has witnessed a significant rise in the gig economy, with a surge in the number of workers providing services for platform companies without being classified as employees. This trend is most evident in the transportation and delivery sectors, with companies like Uber, Lyft, DoorDash, and InstaCart leading the way. However, the gig economy has expanded beyond just driving services, with freelancers on platforms like Upwork and craft creators on Etsy also contributing to its growth.
Data on gig work is challenging to measure, but studies have shown a substantial increase in the number of gig workers over the years. According to Garin et al. (2023), the number of gig workers has grown by 5 million since 2012, making up approximately 3% of the U.S. workforce by 2021. This growth was accelerated during the pandemic, with the number of platform workers more than doubling. A survey by the Pew Foundation in 2021 found that 9% of the workforce reported working for an online platform in the past 12 months.
One of the key implications of the gig economy is the provision of employee benefits. Traditional employer-sponsored benefits do not align well with gig workers’ needs due to the nature of their work, which involves flexibility and working across multiple platforms. Reclassifying gig workers as traditional employees has been proposed in some states, but this approach may not be effective as it could limit the flexibility that gig workers value.
To address the challenges faced by gig workers in accessing benefits, a new model is proposed. This model is based on insights gathered from a study surveying Uber drivers about their benefits preferences. The study revealed that gig workers value benefits highly, with retirement and flexible savings accounts being preferred over health insurance coverage.
The proposed model involves the creation of a Gig Worker Benefits Platform (GWBP) at the state level, where gig workers and platform companies can contribute to benefits accounts. Platforms would be required to make minimum contributions to the GWBP, with additional voluntary contributions allowed. Gig workers would also have the option to make contributions, with benefits including insurance purchase, retirement savings, and emergency savings accounts.
The GWBP would provide gig workers with flexibility in allocating their contributions across different benefits categories. Decision support tools would be available to assist workers in making informed decisions about their benefits. The model also includes provisions for injury benefits, pooling of contributions, and partnerships with financial providers for retirement and savings options.
In conclusion, the proposed model aims to address the unique needs of gig workers by providing them with access to workplace-based benefits that are essential for their financial security. By offering a flexible benefits platform tailored to the preferences of gig workers, policymakers can ensure that this growing segment of the workforce is adequately supported in terms of income and health security.
