COVID-19 Exposes a Much Needed Change In The Gig Economy
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Over the past few months, the COVID-19 pandemic has made things extremely difficult financially for countless workers and businesses in almost every industry across the globe. One of the industries that’s been particularly hard hit is the gig economy. In fact, many gig workers are now on-call at all hours because they could not afford to live otherwise. Of course, that is, if they have been lucky enough to retain their source(s) of employment.
Being that plenty of people are now looking to work from home or away from the office, the gig economy has become more important than ever and may actually be the future of employment for many consumers in Canada.
The Gig Economy: The Future of Employment in Canada?
Simply put, the gig economy is made up of freelancers, contract workers, and anyone else that doesn’t have a permanent source of employment. Although many people are still working (or are now on leave from) regular jobs, the gig economy seems to be an ever-popular place, particularly for millennials. In fact, statistics show that around 45% of Canadians aged 18-34 have dabbled in the realm of self-employment since 2014.
As mentioned, the COVID-19 pandemic has also caused many permanent workers to take a temporary leave from their jobs, to enter early retirement or, even worse, to become unemployed. The same goes for many small and medium businesses, some of which have had to close their doors altogether. So, while millennials may be the driving force of the gig economy, people of all ages are now starting to partake in gig work.
As such, the gig economy may be considered the future of the workforce for a large portion of Canadian residents. Thankfully, there is an increasing number of jobs that can be done from home or on an on-call basis, so as to respect social distancing rules.
Click here to find out how to file your taxes as a gig worker.
The Problems Gig Workers Face Amid Covid-19
Apart from the unexpected nature of the pandemic itself, there are a few issues that most gig workers in Canada are now encountering, including but not limited to:
- Unsteady Income – Perhaps the most glaring problem is that many gig workers don’t have access to steady work hours or a fixed salary, even under normal circumstances. If the income isn’t flowing, the savings go fast, which is why most people in the gig economy could not stop working even if they had the option.
- Lack of Benefits – The fact that most gig workers don’t qualify for financial or health-related benefits has been very troublesome in recent months. Most cannot get paid leave during quarantine or medical coverage if they get sick, and must rely solely on their savings to get by if they’re lucky enough to have any.
- General Safety – Since they must take whatever jobs they can, many gig workers, such as delivery drivers, have a higher risk of exposure than the average salaried employee, especially if they have to travel or be close to clients. At that point, a loss of income may be the least of their worries.
- Not Enough Support From Companies and/or Clients – Because they aren’t full-time employees, the majority of gig workers also won’t have job security or qualify for unemployment insurance if they get laid off. Even those that normally work from home may experience a distinct loss of income, as many employers have been forced to reduce business or shut down altogether.
Financial Help For Struggling Gig Workers
If you’re a gig worker that’s faced a loss of employment or you’re looking to avoid as much risk as possible by not working in the wake of the coronavirus pandemic, don’t worry, because there are a few solutions available, including but not limited to:
Government Help: CERB
Otherwise known as the Canada Emergency Response Benefit, the Federal Government is currently offering a $2,000 (per 4-week period) payment to anyone who has stopped working or is earning under a certain income because of coronavirus. Qualified beneficiaries can now apply for this benefit for a maximum period of 24-weeks.
Before you apply for the CERB, keep in mind that each payment will qualify as taxable income, meaning you’ll have to factor them in when your 2020 tax return comes due. Check out the Government of Canada website to learn exactly who is eligible.
Company Help: Uber, DoorDash, and Other Essential Services
For gig workers in the delivery industry, companies like Uber and DoorDash are now offering financial assistance to employees who have been infected by COVID-19 or have had to self-quarantine for various reasons. For instance, Uber can now provide up to 14-days of financial relief. However, the specific eligibility terms vary from city to city.
To date, the delivery industry isn’t the only essential service that’s now active in Canada. While many businesses don’t offer any financial or medical benefits, it’s possible that yours will, even if you don’t qualify as a part or full-time employee. Be sure to ask your employer about their policies before you start working during the pandemic.
Alternative Help: Personal Loans
If you’re a gig worker and you’re having trouble covering all your daily expenses due to a lack of proper income or employee benefits during COVID-19, then it may be time to consider other alternatives, such as a low-interest personal loan.
A personal loan is a lump sum of money that you can apply for through almost any bank, credit union, or alternative lender. Typically, the sum is deposited directly into your bank account after your application is approved. You would then repay the loan in divided installments (with interest) over several months to several years, depending on how much you’ve borrowed.
Thankfully, you can apply for a personal loan online with most lenders these days, so there’s no need to physically visit their branch or office. Plus, if you’re a qualified client, you may be able to negotiate the size and frequency of your payments to suit your financial needs. Generally speaking, the stronger you are as a potential borrower, the more favourable your loan amount, interest rate, and repayment plan will be.
Before you apply for a personal loan or any other type of credit product, it’s important to understand that you could be taking on a significant amount of debt. If you already have an unsteady income, it may not be safe to apply for a large loan, as your credit and remaining finances could be negatively affected if you can’t afford all your payments.
Protecting Your Finances During COVID-19
In the end, being part of the gig economy may offer up many opportunities that other industries don’t. However, it can also be problematic to not have any of the benefits that come with being a full-time employee. As such, it may be time for Canada to change the way its gig workers are compensated for their efforts. If you’re looking for financial help, whether it’s in the form of a personal loan or debt relief, Loans Canada can help.
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