Traditional nine-to-five office workers aren’t the only ones having a hard time during the pandemic — gig workers also have seen their livelihoods greatly impacted.
More than two-thirds — 68% — of gig workers who perform services such as making deliveries and ride-share driving said their total income has declined during the COVID-19 outbreak, according to a new report by venture capital firm Flourish Ventures.
For many gig workers, their earnings aren’t enough to meet their most basic needs.
A precipitous drop in gig workers’ income
Many gig workers saw a dramatic drop in income between March and the summer months of July and August.
- 16% of gig workers earned $4,000 or more
- 32% earned between $2,000 and $4,000
- 32% earned between $1,000 and $2,000
- 20% earned less than $1,000
In contrast, during the months of July and August:
- 5% earned $4,000 or more
- 14% earned between $2,000 and $4,000
- 22% earned between $1,000 and $2,000
- 59% earned less than $1,000
People of color have been particularly hard hit by the crisis. An earlier survey found that job concerns were weighing heavier on Latinos than other groups.
Among Black gig workers, 61% earned less than $1,000 in the past month, according to the Flourish Ventures study. Additionally, 71% of Black workers said they were “very concerned” about COVID-19 compared with 68% of Latino workers and 55% white workers.
Gig workers using savings, borrowing to get by
Gig workers have turned to a variety of measures to withstand the current economic crisis. Nearly two-thirds — 63% — have dipped into their savings during the pandemic. Other tactics taken include:
- Cutting spending (62%)
- Borrowing money (55%)
- Finding new or additional work (39%)
- Selling or pawning something they owned (33%)
- Reducing or cutting bill payments entirely (33%)
With a reduction in income, some gig workers are having to choose between using their money to buy food and spending it on bills and other priorities, such as health insurance. Of those who have cut their spending, more than half — 55% — cut back on food. Meanwhile, 24% reduced their entertainment costs and 21% cut back on household bills.
Among the gig workers surveyed, more than 3 in 4 — 77% — received an economic impact payment as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Of those who received a payment, 66% said they were able to cover their living expenses for more than a week compared with 53% of those who did not receive a payment.
Those who did not receive a payment from the federal government were also more likely to feel hopeless about their situation. Nearly half of those who did not receive a payment — 46% — reported a lack of hope. Of those who did receive a payment, only 35% reported such feelings.
Methodology: Flourish Ventures partnered with Steady, a gig worker platform, and 60 Decibels, a research firm, to survey 695 gig workers in five cities in the months of July and August 2020. Among respondents, 31% were from Atlanta, 22% were from New York, 19% were from San Francisco, 18% were from Chicago and 10% were from Philadelphia. When it comes to the racial/ethnic makeup of respondents, 41% were Black, 33% were white and 13% were Latino.