A food delivery cyclist is photographed on Adelaide St. West on June 13.Fred Lum/The Globe and Mail
Alexandrea J. Ravenelle is an assistant professor of sociology at the University of North Carolina at Chapel Hill. Her newest book, Side Hustle Safety Net: How Vulnerable Workers Survive Precarious Times, will be released in October by the University of California Press.
The first time I lost my job, I didn’t apply for unemployment assistance. I thought it was welfare and not for “people like me.”
A few years later, laid off again, I applied for benefits. But most weeks I received less than US$200, half the usual amount. That’s because I’d lost my full-time job in public relations – but not my adjunct teaching gigs at universities.
My part-time teaching gigs didn’t pay enough to live on, a sad statement on life in academia, but I did them because I was pursuing my passion for teaching and trying to keep working. An unintended effect was that this disproportionately reduced my unemployment assistance. I ended up taking home less than what I would have gotten had I simply not worked at all.
Because I was trying to work more, I ended up in a worse financial position. In recent years, with the rise of the gig economy, many more workers are in the same boat.
During the pandemic, the United States had the second-largest fiscal response as a percentage of GDP among industrialized countries, behind only Singapore. In the early days, 76 per cent of laid-off workers who received full benefits got more from unemployment assistance than they’d made while working. But those engaged in polyemployment – working multiple jobs – received reduced assistance that did not reflect their true income loss.
This is the polyemployment paradox: Some efforts to create income security and a personal safety net can leave workers in even more precarious situations.
This is important, because the rise of polyemployment and its impact on the social safety net isn’t uniquely American – it’s also an issue in Canada.
Most employment surveys still operate on the premise of “one person, one job”; at best, they ask about an additional job the week prior. But gig work is episodic. Work today does not mean work tomorrow. It is not surprising that people can have many such jobs.
When surveys such as the 2019 Canadian Quality of Work and Economic Life Study ask people how many jobs they have, 19 per cent report multiple jobs, three times as many as official Statistics Canada estimates. Even that number is likely an undercount, since it excludes those who rely entirely on gig-based work.
For many workers, polyemployment creates a semblance of job security and income stability, reducing the risk of putting all their eggs in one basket, not to mention the promise of flexibility for those who only do gig work. But workers who turn to polyemployment find that, among other issues, low unemployment benefits push them further into gig-based work.
More than a decade after my own experiences, multiple-job holders continue to face reduced unemployment assistance. In Canada, if you earn money while receiving employment insurance benefits, you can keep 50 cents of benefits for every dollar you earn, up to 90 per cent of your previous weekly earnings. Above that cap, benefits are deducted dollar-for-dollar. And people who work a full week are not eligible to receive benefits, regardless of earnings.
Additionally, the requirements for accessing unemployment benefits, such as a minimum number of annual work hours, may be difficult to meet for workers with multiple jobs or erratic work hours. Workers are also disqualified if they leave a job without cause. Gig workers and the self-employed can receive unemployment assistance, but they have to pay into the system for a year first. It’s not surprising that the Canadian Centre for Policy Alternatives estimates that in 2017 only 42 per cent of unemployed workers actually qualified for unemployment benefits – and among those making $15 an hour or less, just 28 per cent were eligible.
In the U.S., where state-run systems further complicate the process, any work – even if unpaid, or if payment isn’t expected for months – can reduce unemployment benefits. Workers who lose their main income source but continue to work side hustles or accept freelance opportunities also see a disproportionate decrease in their benefits. Workers in this situation are forced to turn to the survival strategy of off-the-books employment, including illicit work.
Think of the big picture: Unemployment assistance is an economic stabilizer, allowing the unemployed to keep spending on food and rent and transportation, which benefits the economy. In Canada, consumer spending accounts for about 60 per cent of GDP. One worker’s purchases become another worker’s paycheque. If too many people pull back on their spending, we can go into a recession.
One solution is to return to the relatively generous unemployment benefits offered during the earliest days of the pandemic and ensure that all workers can access that assistance. When workers start jobs, and otherwise at least once a year, they should be informed about unemployment assistance.
All nets have holes, and the social safety net is no different. But workers who see the side hustle as a safety net instead find a tightrope across a chasm. Workers who hustle shouldn’t have to struggle even more. This Labour Day, it’s time to make a change. Let’s acknowledge the challenges of working in the gig economy and recognize, instead of punish, those who seek additional income and work. Let’s forever eliminate the polyemployment paradox.