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COVID-19 and the gig economy: Who’s a gig worker and what benefits can they get now?

  • Gig workers like photographers are now eligible for emergency unemployment coverage. Staff photo by Ben Conant—

Granite State News Collaborative
Published: 4/3/2020 2:36:25 PM
Modified: 4/3/2020 2:36:12 PM

During the last economic crisis, when the housing market collapsed and took the financial sector and the rest of the U.S. economy down with it, business ground to a halt for contractors, real estate agents and service providers such as electricians and plumbers.

Even then, most of those professionals who worked for themselves didn’t qualify for unemployment benefits in New Hampshire. In general, self-employed individuals cannot collect unemployment if they lose work because they don’t pay into the unemployment system, as an employer would on its workers’ behalf.

But last month, with the coronavirus outbreak widening across the country and businesses big and small shutting down to stop the spread, Gov. Chris Sununu passed emergency legislation that made self-employed workers eligible for unemployment benefits if they have lost work and income due to COVID-19, the respiratory disease caused by the novel coronavirus. Those workers qualify if they get COVID-19 or are quarantined to avoid transmitting the virus; if they have a family member who is sick with the virus and needs their care; or if they are responsible for children whose school or daycare programs have closed.

During the Great Recession of 2008-2009, many people in the construction field called the New Hampshire Employment Security office to inquire about benefits, but no emergency orders at that time gave them permission to file unemployment claims as they can today, said Annette Nielsen, economist for the Economic and Labor Market Information Bureau of New Hampshire Employment Security. “This is a whole different scale,” she said.

On Friday, President Donald Trump signed the Coronavirus Aid, Relief and Economic Security (CARES) Act, a sweeping financial package to support U.S. citizens and businesses struggling amid the pandemic. Among its provisions, the emergency legislation allows self-employed individuals to file unemployment claims and provides federal funding to states to support the expanded benefits.

Self-employed workers include those in the “gig” economy. People tend to think of “gig” workers as Uber and delivery drivers who bring food and Amazon boxes to their doors. But, essentially, it’s any type of freelance work. And the category includes a scope of jobs that aren’t usually recognized as self-employed gigs.

“There are people you might not think about, like your hairdresser or your barber,” said Reagan Baughman, associate professor of economics at the Paul College of Business & Economics at the University of New Hampshire.

The size of the gig workforce is difficult to quantify and depends on how it’s defined, labor economists said. Gig workers are generally considered someone paid by the individual job or service provided. Some – for example, freelance photographers or plumbers – make their full-time living doing that work.

Others take gigs on the side while they have part- or full-time jobs, so it’s not a primary source of income. Someone might tend bar at night as a part-time restaurant employee and clean houses during the day for extra money.

If the side-hustle category is carved out of the overall New Hampshire labor force, the number of gig workers in the state isn’t significant, Nielsen said.

“We don’t have a very good grasp on that, but it’s not huge,” she said.

The Gig Economy Data Hub, a partnership between the Industrial and Labor Relations School at Cornell University in New York and the Aspen Institute’s Future of Work Initiative, estimates from several surveys that gig workers of all types make up at least 25 percent of the national workforce, and at least 10 percent of workers derive their primary income from gig work.

Even as a small part of the New Hampshire economy, these self-employed workers are more likely to feel the pain of plummeting income during the coronavirus shutdown.

“Both the length of this crisis and the individual situations of these workers could leave them disproportionately exposed,” Phil Sletten wrote in an email about gig workers and unemployment. He is a policy analyst at the New Hampshire Fiscal Policy Institute, a nonprofit organization that promotes public policies to enhance economic opportunity, particularly for low- and moderate-income residents. 

“Measuring the size and importance of the gig economy is difficult, but these workers may be less likely to have health insurance, paid leave, or other benefits through their employment to support them during this crisis,” Sletten wrote.

Baughman agreed. These workers are “particularly the vulnerable people” who live “paycheck to paycheck,” she said.

Now, if those paychecks disappear, they can file unemployment claims. New Hampshire Employment Security will base their benefit amount on the income they listed in their 2019 tax returns. Under the CARES Act, the federal government will provide an additional $600 per week on top of their regular benefits, through July 31, and will extend eligibility by 13 weeks over the usual 26 weeks.

These articles are being shared by partners in The Granite State News Collaborative. For more information visit collaborativenh.org.




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