The forgotten Americans

https://www.usatoday.com/story/money/2020/03/23/coronavirus-stimulus-self-employed-workers-seek-relief/2892919001/

Apparently they are not part of the business assistance packages being debated in Congress.

“The self-employed – independent contractors, gig workers, temporary and part-time workers – number 57 million in the U.S., representing more than a third of the working population and driving $1 trillion in income, but have none of the benefits and protections that employees or even other small businesses do.”

True, some are very well off and self sufficient. And if it is the 2nd or 3rd job in a family where someone is employed by a larger company, it would hard to sort out.

Yet the new economy gig workers don’t make much money. Maybe $11/hour and if they lose that, they can be SOL. And if in fact as part of a group that is a third of the workforce, the impact on them and where they spend could be dishearteningly huge.

In short, a shut down economy is a disaster for these folks.

22 thoughts on “The forgotten Americans

    1. 2019 taxes if filed. 2018 if not? Not sure what the correct answer is, but the working people of this country, be they employed by a major corporation or a mom-and-pop shop (like where I work) deserve to be treated fairly and the focus of any monies should be real people. Not those deemed “people” by court decisions like Citizens United.

      Liked by 1 person

        1. The stockholders already have a strong political voice through the corporations they hold shares in. Airlines and hotel chains are already in line.

          No matter how you parse it 57 million self employed are a lot of customers in our retail economy.

          Liked by 3 people

      1. As I look out at my bird feeder with its weight sensitive bar to access seeds it occurred to me it might reflect our economy.

        The “chosen” birds can feast one or max two at a time from the feeder. As they do a lot of seeds gat tossed to the ground where many other birds, ducks, geese, squirrels scramble for the dropped seeds.

        They might be the gig workers. But when the select birds are gone so are the dropped goodies.

        So when services, restaurants, ships , hotels, janitorial companies shut down these ancillary workers are stuck.

        Maybe removing the weighted barrier from the feeder and providing some of the corporate monies to temporarily provide unemployment benefits to freelancers and gig workers. They will put that money right back into the economy faster than many other venues.

        Liked by 1 person

    2. I don’t know. I was just stunned when I saw the numbers involved. Not long ago I saw that 47% of jobs pay $15/hour or less. The gig workers probably make up a sizable chunk of that.

      At those wages it would take a lot to build a 6 month cushion.

      I think that such an economy might be on shaky legs when stuff happens.

      Liked by 1 person

    3. It’s NOT a simple answer as it is a complicated question. I’m actually glad that there will be more negotiations as making adjustments in this political climate will be a bitch.

      However, they need to get serious and their collective asses in gear…

      Liked by 2 people

    4. @Tabor

      How do you propose fixing that?

      You don’t have to fix anything. Just send the checks to every PERSON. Trying to find out who is worthy and who is not is a waste of money especially in the current meltdown. Treat this Universal Basic Income as taxable income with a sliding high special rate for those above a certain AGI and those who did not need it can pay it back when they do their taxes.

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      1. As I wrote earlier, when we drafted people to fight WW2, we paid them, and I have no problem with paying people we require to stay home from work.

        The question is how to best do it. Gig workers are basically self employed and direct payments to them make sense, but for people who have a job to go back to, paying them through their employer preserves that relationship, which has value of its own.

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          1. But are those existing pathways the best?

            Consider if I were still in practice. The government mandates, and the market demands, that I shut down operations for a month or more for the virus.

            I have savings to fall back on, and the accounts receivable and pending insurance payments will cover rent and notes, but not my three employees salary and payroll taxes.

            So, how are they better off, laid off and on unemployment, meaning they have to interview for other jobs or the government loans me enough to keep paying them at least partial pay, and forgives the loan if I use it for that purpose? Consider that way they are never unemployed, no gap in their employment history, and their jobs are waiting for them when I can reopen.

            That may not be traditional, but I think it is better.

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          2. Sadly, it really appears that Trump’s top priority is the future of his personal businesses. We see this in at least two ways.

            First, his talk of reopening businesses in spite of the best medical advice that intense social distancing is the only way to curb the outbreak and save lives.

            Second, it the insane GOP idea of a $500 billion slush fund for corporations to be used by Trump secretly and without public disclosure for six months. Never mind, the issue of helping corporate investors instead of working people, what possible justification for the secrecy? Six months? To get us past the election?

            Liked by 1 person

  1. RE: “The self-employed – independent contractors, gig workers, temporary and part-time workers – number 57 million in the U.S…”

    57 million is a big number, but it is not the one to focus on. Many self-employed people are incorporated, and many who are incorporated pay into the federal unemployment insurance program because the state in which they work requires it. Those who pay into the program can claim unemployment benefits.

    Many who are incorporated may also qualify for small business loans.

    The at-risk group consists only of those who don’t qualify for unemployment along with those who can’t get other support, which is likely a much lower number than 57 million. Still a valid concern, but one of lesser magnitude.

    Liked by 4 people

    1. Stats are hard to pin down. BLS has 15million self employed businesses. 70% have 1-4 employees.

      “ There are now 57 million Americans in the freelance economy, and the majority — 51% — say no amount of money would ever entice them to take a traditional job.”

      The median income is $28/hour. So my guess is that the lower income gig jobs are lumped below the median.

      What I don’t know is whether freelance and self employed are lumped in that 57 million.

      I think Paul has the right idea. Other economists have voiced similar ones. Don’t sweat the details too much. Pick an AGI as a cutoff and get the incomes out.

      Kind of the economic equivalent of “shoot ‘em all, let God sort them out”.

      The Dems want a better transparency on business supports and no anonymity. It seems reasonable enough.

      The key though is money in the hands of individuals. They have immediate bills to stay sheltered and fed. Then we can sort out loans, tax breaks, and other business assistance. Most can wait a bit longer. Think weeks not months.

      Liked by 2 people

    2. RE: “Stats are hard to pin down.”

      When you pin them down, let us know.

      I appreciate that the problem you describe is real, and I appreciate the wisdom of “thinking large” in a crisis to avoid the unintended consequences of small mistakes. But I do not condone panic-based decision-making, nor operating in “panic mode” generally.

      You say the most important thing is to put money in the hands of individuals. When you are able to answer key questions like, How much? And Who gets it? And Where will the money come from? Then we can talk about it.

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      1. I think the amounts and recipients are already more or less agreed to in Congress.

        I just posted another view on this thread:

        https://fivethirtyeight.com/features/stimulus-checks-arent-a-bad-idea-but-theyre-not-enough/

        As far as panic mode decision making, both the administration and Congress are trying to move quickly. So whether or not you or I agree about working under pressure has no bearing in the political sphere.

        I think when employment reports come out in April, the numbers are going to be staggering. Unemployed people can’t spend money they don’t have. So there is a crunch.

        Keeping local, there was a post on NEXTDOOR website from a young man who was truly scared…his word. He was working a modest wage job supporting his wife who was getting a post graduate degree. He was let go. They spent his last paycheck to cover about 10 days of food, supplies and rent. They had not accumulated savings yet. He wasn’t begging, but his concern was real.

        Theories and political maneuvering means little if you are caught in such a corner.

        No one can predict this crisis yet. But I am sure we will be injecting many trillions to bolster a $23 trillion economy. I just hope we can do it with smarts, ethics and compassion.

        Liked by 2 people

      2. ” Where will the money come from? ”

        The same place as the tax cuts from 2017. The Treasury Dept has already said the printing presses are ready to go.

        Not being facetious. I saw a piece on The Hill that actually said that about the printing presses.

        Like

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