The spread of COVID-19 and its accompanied social distancing measures have exposed all types of vulnerabilities within the United States’ economy and its labor force. Freelancers, in particular, have been left to fend for themselves against the dangers of the pandemic. That’s because gig workers are not classified as “employees,” often leaving them without benefits like sick pay, health insurance, or workers’ compensation which would otherwise provide a safety net to those at risk.
“You have companies like Uber, GrubHub, and Amazon delivery. It's all contract workers and these people are without protections. Without health protections, without job protections,” Kara Swisher, co-founder of technology news site Recode, told Yahoo Finance. “And they really have to go to work. At the same time, there's going to be a big push for delivery at home with most people staying home, hopefully.”
Data from the Labor Department shows 701,000 Americans lost their jobs in March, the worst month for payrolls in more than a decade. The unemployment rate currently sits at 4.4%, but economists expect a significant rise over the next few months. Goldman Sachs estimates the unemployment rate “to reach a postwar record of 15% by midyear.”
The government is doing what it can to ease the pain, but it may not be enough. Freelancers have been given access to federal aid under the CARES Act, Congress’ $2 trillion stimulus bill, which grants unemployment benefits to gig workers and self-employed Americans. Millions of people will also receive checks of up to $1,200 over the coming weeks.
“We have to start thinking hard about what kind of society we have created and what protections we need to put in place to protect all people who work, and have a better life for them. [The coronavirus] made us think about it in a really dramatic fashion,” said Swisher, who recently joined New York magazine as editor-at-large. “Gavin Newsom and I, who's now the governor of California, talked about this new designation of worker. We had to change what a worker is and how we protect them,” she said.
Last year, California passed a controversial bill to regulate people working as independent contractors. The law, named Assembly Bill 5, restricts employers from hiring freelancers, forcing them to designate these workers as employees. Proponents say the bill provides access to job benefits they would not have had otherwise, but critics claim it puts an unfair burden on business owners which in turn put many contractors out of work.
The pandemic has thrust AB5 back into the spotlight, with some arguing the state should suspend the law in order to boost hiring. Swisher points to companies operating outside of California which are helping gig workers without the government’s intervention.
“I think technology companies by and large have reacted pretty well to how to deal with their workers at home,” Swisher said. “They're at least stepping up to the gig workers, in some cases, how to take care of them. We're all starting to realize how vulnerable our society has become from an employment point of view.”
Nick Rose is a producer for Yahoo Finance.