Businesses everywhere are facing unique challenges due to the COVID-19 pandemic, and workers in the so-called gig economy are being affected in a variety of ways. The gig economy refers to the system of workers and employers that rely on contract work rather than long-term, full-time employment. In this pay-per-job system, employees must remain on the prowl for jobs constantly. While this system is touted as being liberating and lucrative by those who can leverage it, the gig economy is not for everyone. Contract workers and freelancers across a variety of industries have been impacted by the COVID-19 pandemic, both positively and negatively, leading some to question the financial futures of themselves as individuals and the gig economy as a whole.

The Backbone of the Gig Economy Faces a Massive Boom (Along With Increased Risk)

Contract jobs that involve the delivery of food, groceries, and other supplies represent a major portion of the gig economy, and these services have faced steep increases in demand during this pandemic. Delivery services have made it possible for people to shop and dine while under quarantine, allowing them to minimize their potential exposure to coronavirus. While workers can reap the benefits of a sudden surge in available work, they must also contend with a few challenges. Many laid-off workers from other sectors are entering the gig economy to make ends meet, providing an unusual amount of competition for drivers. Perhaps most concerning is the risk that delivery drivers face when making in-person deliveries. Every job presents the potential for coronavirus exposure, which is made even more daunting by the fact that most delivery drivers do not receive benefits or sick pay.

The Supply of Remote Contract Workers Often Outweighs Demand

While it may seem like there shouldn’t be any significant changes to the lives of freelancers who work from home, many home-based contract workers are struggling to find work during the COVID-19 pandemic. Like delivery drivers, remote workers are being met with a sudden influx of competition for jobs. While demand for delivery is booming, many freelancers work with businesses that are temporarily closed or are scaling back operations. The combination of an increase in competition and the decline in paying jobs is leading many in the gig economy to take a closer look at their personal finances and minimize expenses wherever possible.

Many On-Location Gigs Have Shut Down

Although discussions of today’s gig economy focus heavily on app-based contract work, other types of gigs are being significantly affected by the COVID-19 pandemic. For those involved in the performing arts, this pandemic is creating a near-industry-wide shutdown. Small local performers are faced with a massive threat to their livelihood, and even those who work in mainstream media are left without work due to set and studio closures. While some restaurants remain open, many cooks, servers, and bartenders are struggling to make ends meet.

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