More than 50% have lost half their pay, pointing to the financial insecurity of many, particularly those without traditional full-time jobs.
By Ron Varrial
COVID-19 and its economic fallout have revealed the fragility of Americans’ finances, particularly among a growing segment of the workforce: those in flexible jobs.
According to a new survey by FlexJobs and Prudential, more than half of workers—specifically those who seek positions such as gig employment, remote jobs and alternative schedules—have seen their income cut in half during the pandemic, and nearly a third have lost it all.
With the steep reduction in income, 44% of participants in the survey said they are currently struggling financially, up from 24% before the pandemic. An already low 21% said they were financially secure before COVID-19, but that number has dropped to 10% now.
“We are deeply aware of how intricately jobs and finances are intertwined, which is why we have partnered with Prudential to gain a better understanding of the challenges that many people are now facing,” said Sara Sutton, founder and CEO of FlexJobs. “We also co-hosted a financial wellness educational webinar to help educate workers about financial steps they can take during the pandemic and beyond. For the longer term, we established a financial wellness resource center to support their growing financial literacy and ultimately help them reach their financial goals.”
The pandemic has only exacerbated tenuous financial conditions for many in the flexible workforce.
Just 30% agreed that they had a good plan in place in case they got sick or needed care in the short-term and half said they don’t feel prepared to make informed decisions about their finances.
Respondents said they are taking steps now to address their current situation, while preparing for future disruptions in income. Their efforts underway include: Trying to pick up extra work and looking for sources of additional income (49%); building emergency savings (28%); filing for unemployment (28%); delaying a major purchase, such as a car (25%); and using emergency savings (23%).
Looking longer term, only about half said they or their spouse had an employer-sponsored retirement plan, such as a 401(k), and less than a third had non-retirement related investment accounts.
Gig workers are one of several communities whose finances have been disproportionately impacted following the pandemic’s outbreak. Prudential’s latest Financial Wellness Census, which explores the financial health of Americans, found that people of color, women, younger people, small business owners and retail industry employees also were hit especially hard. Published in July, that research echoes the financial precarity for those working outside of traditional full-time employment: 17% of all Americans—but 31% of gig workers—saw their income fall by half or more.
“The pandemic has exposed the widening gap between the financially secure and insecure in this country,” said Dawn Goldbacher, vice president of business development at Prudential. “Access to protection, savings, education and employment opportunities through the workplace and other channels are essential to recovery.”
The survey, conducted in June, included 1,100 U.S.-based respondents interested in flexible work.