Economic Insecurity Of US Workers Increases With Unstable Jobs

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Above Photo: More Americans work without full-time employers yet policies fail to address this new reality. (Luke Sharrett/Bloomberg via Getty Images)  

The U.S stock market may be at record highs and U.S. unemployment at its lowest level since the Great Recession, but income inequality remains stubbornly high.

Contributing to this inequality is the fact that while more Americans are working than at any time since August 2007, more people are working part time, erratic and unpredictable schedules—without full-time, steady employment. Since 2007, the number of Americans involuntarily working part time has increased by nearly 45 percent. More Americans than before are part of what’s considered the contingent workforce, working on-call or on-demand, and as independent contractors or self-employed freelancers, often with earnings that vary dramatically month to month.

These workers span the socioeconomic spectrum, from low-wage workers in service, retail, hospitality and restaurant jobs—and temps in industry, construction and manufacturing—to highly educated Americans working job-to-job because their professions lack fulltime employment opportunities given the structure of many information age businesses. As Andrew Stettner, Michael Cassidy and George Wentworth point out in their new report, A New Safety Net for an Era of Unstable Earnings, what all these workers have in common are highly volatile, unstable incomes and a lack of access to the traditional U.S. unemployment insurance safety net.

“The programs we have to help people are very biased toward traditional incomes,” says Stettner, senior fellow at The Century Foundation. “Volatility in earnings is a really big problem.”

“Those with the least to lose are most likely to lose it”

Published by The Century Foundation, a progressive, nonpartisan think tank, in collaboration with the National Employment Law Project (NELP), which advocates for policies that expand access to work and labor protections for low-wage workers, the report found that those in the contingent or nontraditional workforce “experience nearly twice as much earnings volatility as standard workers.”

It also found that because of this situation, between 2008 and 2013, three out of five prime earners experienced at least as much as a 50 percent drop in their month-to-month income. Half experienced month-to-month income drops of more than 100 percent.

“This broad issue of underemployment,” says NELP senior counsel George Wentworth, “there’s less of a light on it and these people are not showing up in national unemployment figures. But these workers are struggling and many of them are not making ends meet.”

Central to this problem is that most workers now employed part time are making less than what they made previously, working full time. At the same time, their part-time or independent contractor status means they are likely not eligible for a full complement—if any, in the case of self-employed freelancers—of standard employment benefits, including employer paid health insurance or any form of unemployment insurance, explains Wentworth.

As the report notes, “Those with the least to lose are most likely to lose it.”

Policy recommendations

Both Stettner and Wentworth explain that historical policy responses—and those set up to help workers laid off during the Great Recession—focus on traditional employment situations. Typical unemployment insurance is also biased against those who take up part-time or self-employment gigs while they’re looking for new full-time jobs by reducing unemployment payments. Some states have partial unemployment benefits designed for part-time workers, including those who’ve involuntarily had their hours reduced, but these vary widely. The report found that for workers whose hours are cut from full time to part time, “ten states would replace half of their lost earnings while fourteen states would provide no benefits at all.”

To address what’s becoming the new normal for U.S. workers, the report makes several recommendations. It proposes that states offer partial unemployment benefits to workers earning less than 150 percent of what they’d qualify for weekly if they were laid off (rather than working part time). This would substantially improve coverage for workers whose hours have been cut or who take part-time jobs after losing fulltime jobs.

“It also should be easier to file for these benefits,” says Stettner, explaining that current work documentation requirements don’t necessarily reflect the reality of how part timers work and get paid.

The report also recommends broadening unemployment insurance support for work-sharing programs. Work-share programs, explains Wentworth, are designed to help employers avoid layoffs by retaining their existing workforce but with reduced hours.

The report proposes beefing up existing financial support for work-share programs to reduce the impact to employees of reduced hours. “This is basically for high road employers,” says Wentworth.

The report also recommends a pilot program to provide unemployment insurance to freelancers who don’t have a traditional employer relationship. This is perhaps the most challenging of the report’s proposals since it seeks to address circumstances that extend well beyond the issue of reduced hours. Ideas include giving freelancers better access to certain tax credits in ways that help even out swings in earnings. It could also involve building on international examples such as professional guilds in Europe, where people contribute in order to draw benefits when needed, Stettner explains.

These proposals go beyond and build on those already being discussed at the state, local and federal level to require employers to provide more stable scheduling, pay a minimum number of hours if workers are called for a shift and that protect workers who request schedule changes. They would also begin to address the situations of the estimated 19.1 million Americans who depend solely on freelance income and are currently without any employment safety net.

“We’re just scratching the surface to understand how to come up with a better set of market-based and government solutions,” says Stettner. “We’ve created a whole view of the world that now applies to only about half the working people in America,” he says. “We have this huge divide we need to hammer on. It should concern everyone.”

 

  • Roland Petit

    Spending less on wars and establishing a Universal Basic Income would be a step in the right direction?

  • DHFabian

    This instability has remained true since the 1980s. Liberals/media played a powerful role since the 1990s in reframing or disappearing the consequences. The consequences, obviously, are seen in our poverty crisis. What did you think happened to those workers who have been pushed out? The last I heard, there are 7 jobs for every 10 jobless people who still have the means to pursue one (home address, phone, etc.). What do you think happens to the three who are left behind?

    It’s not to complicated, really. In real life, not everyone can work, and there aren’t jobs for all. The US shipped out/shut down a huge number of jobs since the 1980s, ended actual welfare aid in the 1990s. In the process, we built up an abundant surplus of job-ready people who are absolutely desperate for any job at any wage — grateful for the chance to replace you for far less than you are paid. There’s nothing to fall back on today.

    Middle classers understand job insecurity. What they won’t think about is what happens to those who get pushed out. In the backs of their minds, they embraced magic, believing that if they were brutal enough to the poor, the gods of capitalism (out of appreciation) would protect middle class workers. They were wrong.

  • DHFabian

    We embraced a degree of this with our former welfare aid system from FDR to Reagan/Clinton, during which the US actually did achieve its height of wealth and productivity. This provided just enough economic stability to enable the jobless to get into (or back into) the job market.

    What they wrote off as a failure was actually very successful, as welfare itself enable some 80% of recipients to secure jobs within a reasonably short time, with most eventually working their way up. Consumer purchases grew, more products needed to be produced, more workers were needed to produce them, etc. We reversed this with the Reagan/Clinton era. More people in hopeless poverty, fewer consumer purchases, fewer workers are needed, more people in poverty.

    Twenty years after actual welfare aid was ended, many middle classers still rail against (non-existent) welfare recipients.

  • Blame big government (excessive regulation, excessive taxation, excessive spending and the Federal Reserve) for hoarding off-shore, outsourcing, corporate inversions and the problems of American workers; not innovation, not technology, not immigration, not globalization, not foreign currency manipulation, not foreign subsidies, not journalists, not the media.