Gig Nation
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The Gig Economy: Greater flexibility — but for some, financial instability
Being a gig worker appeals to many because of the autonomy, freedom, and flexibility at work that are hallmarks of the gig lifestyle. The ability to work from wherever, whenever, and for whomever one chooses has inspired many to become freelancers, making the gig economy more mainstream. Gig economy jobs grew by 33% in 20201 and are projected to grow another 17% in 2023.2
As a result of the flexibility inherent in freelance work, gig workers report generally high levels of well-being and report lower levels of depression and anxiety than full-time workers.
However, this may be disguising a potentially precarious financial situation. While many gig workers report positive overall financial health, most don't have traditional workplace benefits available to them. As a result, many gig workers are underinsured, but don't realize it. Therefore, there's a gap between reality and their perception of their financial state. In reality, millions of gig workers are unprotected and overexposed to risk.
Flexibility drives gig workers' overall well-being
Gig workers have traditionally enjoyed high overall self-reported well-being. In fact, in past years, their well-being was significantly higher than full-time employees’.
Twenty percent of gig workers choose the gig lifestyle because they desire flexibility, even though they understand they may earn less than FTEs.
The influence of flexibility on overall well-being cannot be overstated. In fact, it’s the biggest factor that impacts gig workers' choice to work at a particular organization, which ranks higher than all other benefits, including compensation.
Caregiving responsibilities drive many to choose gig work
For many caregivers, gig work is a logical choice as it enables them to balance their caregiving responsibilities with the need to earn a living.
Gig workers who are caregivers also place a high premium on flexibility at work, which is likely what drove many of them to seek gig work in the first place. Female gig workers in particular places slightly more emphasis on the importance of flexibility (26%) than male gig workers (20%), not only because they disproportionately provide care for elderly family members, but also often bear the majority of childcare responsibilities, too.
Over half (51%) of employers say that their workforce's caregiving responsibilities have a negative impact not only on their health, but their productivity.
Gig workers lack protection, which contributes to their lower financial wellness
Because benefits are typically offered with full-time employment, it’s no surprise that gig workers have far lower rates of insurance coverage and financial product owners than full-time employees do.
The benefit that is most widely available from employers to gig workers is not a product for coverage and protection, but a flexible work schedule.
Gig workers prioritize having a good work-life balance (76%), far more than having a predictable salary (59%) or access to health insurance (48%). The gig lifestyle, with its inherent flexibility, often including the opportunity to work from home, fulfills that goal.
Unfortunately, the prioritization of flexibility over access to benefits like life and disability insurance means that many gig workers — perhaps unwittingly — sacrifice financial protection. This could lead to devastating financial consequences in the long run.
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