the toll of job insecurity in turbulent economic times
Global – While full-time work is generally protected by labor laws, freelance or free-time work is more vulnerable to sudden drops in demand. When a recession hits, employers can terminate short-term contracts or terminate temporary workers much more easily than firing full-time employees.
Some workers choose precarious employment to sell their skills and diversify their wages on a freelance basis with family time.
However, other workers find themselves in unprotected employment due to forced circumstances. In particular, this could happen in the service sector, where zero-day contracts and free-time work are common in industries such as hospitality, transportation and the arts. In these cases, low-paid employees have no guaranteed income and often do not receive paid vacation or sick leave.
As the role of technology has grown, so has the role of precarious work in the economy. Statistics on exact numbers vary; According to a 2017 U.S. Bureau of Labor Statistics estimate, temporary agency work, on-call work, contract work, or freelancing is the main source of income for more than 10% of U.S. workers. In the UK, a June 2022 report found that 3.7 million workers were in precarious employment; defined as people working on a zero-day contract, agency, temporary and seasonal workers, and the low-paid self-employed (but not workers on fixed-term contracts). People are also increasingly turning to platform work to fill income gaps; according to a 2021 survey, 16% of U.S. workers have made money on an online platform at some point, favoring younger, lower-paid workers.
Without a steady job to rely on, precarious workers face a host of challenges that their more formal counterparts are better protected from.
The economic downturn means many freelancers are now under more pressure to take on as much work as possible. By saying yes to more work, you create a form of security. This means not only accumulating more wealth through a recession, but also that workers are not dependent on a single source of income.
However, this form of financial planning is not without consequences. Those who have lost a huge job now have three or four contracts, even if they only have one or two. We probably overwork – and burnout can occur – but at least we have a fallback if something goes wrong.