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 schedulesâ€”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 whatâ€™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 jobsâ€”and temps in industry, construction and manufacturingâ€”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.
â€śThe programs we have to help people are very biased toward traditional incomes,â€ť says Stettner, senior fellow at The Century Foundation. â€śVolatility in earnings is a really big problem.â€ť
â€śThose with the least to lose are most likely to lose itâ€ť
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 â€śexperience nearly twice as much earnings volatility as standard workers.â€ť
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.
â€śThis broad issue of underemployment,â€ť says NELP senior counsel George Wentworth, â€śthereâ€™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.â€ť
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 complementâ€”if any, in the case of self-employed freelancersâ€”of standard employment benefits, including employer paid health insurance or any form of unemployment insurance, explains Wentworth.
As the report notes, â€śThose with the least to lose are most likely to lose it.â€ť
Both Stettner and Wentworth explain that historical policy responsesâ€”and those set up to help workers laid off during the Great Recessionâ€”focus on traditional employment situations. Typical unemployment insurance is also biased against those who take up part-time or self-employment gigs while theyâ€™re looking for new full-time jobs by reducing unemployment payments. Some states have partial unemployment benefits designed for part-time workers, including those whoâ€™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, â€śten states would replace half of their lost earnings while fourteen states would provide no benefits at all.â€ť
To address whatâ€™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 theyâ€™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.
â€śIt also should be easier to file for these benefits,â€ť says Stettner, explaining that current work documentation requirements donâ€™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. â€śThis is basically for high road employers,â€ť says Wentworth.
The report also recommends a pilot program to provide unemployment insurance to freelancers who donâ€™t have a traditional employer relationship. This is perhaps the most challenging of the reportâ€™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.
â€śWeâ€™re just scratching the surface to understand how to come up with a better set of market-based and government solutions,â€ť says Stettner. â€śWeâ€™ve created a whole view of the world that now applies to only about half the working people in America,â€ť he says. â€śWe have this huge divide we need to hammer on. It should concern everyone.â€ť
This article originally appeared at Inthesetimes.com on DecemberÂ 28, 2016. Reprinted with permission.
Elizabeth Grossman is the author of Chasing Molecules: Poisonous Products, Human Health, and the Promise of Green Chemistry, High Tech Trash: Digital Devices, Hidden Toxics, and Human Health, and other books. Her work has appeared in a variety of publications including Scientific American, Yale e360, Environmental Health Perspectives, Mother Jones, Ensia, Time, Civil Eats, The Guardian, The Washington Post, Salon and The Nation.