US economy

Gig workers bear the brunt of US labour market slowdown


Chase Copridge sleeps in a van, then spends 16 hours a day sitting in a car. Parked outside grocery stores in the San Francisco Bay area with other drivers, he waits for a job to come through on Instacart, DoorDash or Amazon Flex, whichever app he is working for that day.

But delivery assignments have been few and far between as a winter surge of Covid cases triggered new lockdowns in several states, prompting increasing competition for app-based work. Before the pandemic, Mr Copridge says he easily made up to $400 in a single day but that sum was at an all-time low of between $100 and $150 in recent weeks — at the end of a devastating year for the US economy and his own finances.

“That’s the reality of gig work,” he said. “Time taken away from your family and friends and other avenues of life just to get by.” 

The struggles of the 33-year-old driver in California are emblematic of the broader travails of the American jobs market, which after a faster-than-expected rebound from the initial pandemic shock, is showing signs of another serious slowdown.

US employers slammed the brakes on rehiring workers shed during the coronavirus crisis, creating just 245,000 jobs in November compared with 611,000 the previous month.

As employment in restaurants, movie theatres, stores and other parts of the service economy comes under pressure, more people are turning to gig work such as delivery, putting downward pressure on earnings, workers say.

The same-day delivery service Shipt, which is owned by the retailer Target, said the number of independent contractors it now pays to pick groceries off store shelves and deliver them to customers has more than doubled since the end of 2019. The grocery delivery service Instacart hired 300,000 new shoppers in April alone and announced plans to hire 250,000 more.

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At the same time, pandemic restrictions are cutting into areas of the gig economy such as car-hailing. Uber said in August that its gross bookings on rides fell 75 per cent between April and June.

One of the most troubling features of the labour market slowdown has been a surge in applications for jobless benefits disbursed through a federal programme set up specifically for gig workers and the self-employed who do not have access to regular state benefits.

A bar chart showing people in service sectors hit hardest throughout the pandemic

According to the labour department, 455,037 people filed for the so-called Pandemic Unemployment Assistance scheme in the week to December 12, almost double the number from two weeks earlier, and the number of new applicants was still high in the week to December 26, at 308,262.

“You’ve really seen since August very little improvement in the economy [and that] is running full force into this new surge of the pandemic,” said Eliza Forsythe, a professor of economics at the University of Illinois at Urbana-Champaign. “People that are in service sector jobs, customer-facing jobs, lower wage workers and gig workers have been hardest hit throughout this period. That same group of people is again losing jobs and going back on unemployment insurance.” 

Even in states such as Texas that have fewer Covid-related restrictions on activity, low-wage workers have been struggling to regain business.

Willy Solis said his earnings have dropped in recent weeks, while expenses have been cutting into his diminished income

Willy Solis has driven through the suburbs of Dallas for apps including Shipt since late 2019 to help bridge the gap between construction jobs. Mr Solis says his earnings from being a Shipt shopper have dropped in recent weeks, and expenses including petrol, insurance and additional personal protective equipment have been cutting into his diminished income.

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Mr Solis — who also works with the Gig Workers Collective, an informal union of Shipt shoppers and drivers for Instacart and DoorDash — said many others also complain of reduced workloads. “There are fewer orders in our individual queues,” he said.

Shipt said in a statement that the company’s shoppers were being offered more orders than at this time in 2019, in addition to complimentary PPE and holiday bonuses.

This week US workers such as Mr Copridge and Mr Solis received an important reprieve. After months of tortuous negotiations and tense stand-offs, Congress and the White House passed a $900bn economic relief bill that includes a $600 cheque for people earning up to $75,000 a year as well as aid to small businesses. Most importantly for the millions of low-wage and gig workers on the front lines of the crisis, the legislation also brought back emergency unemployment benefits worth $300 a week to each recipient for 11 additional weeks.

Column chart of Weekly new claims for Pandemic Unemployment Assistance, thousands showing Applications for jobless benefits continue to be elevated

“There’s huge relief,” said Andrew Stettner, a senior fellow at the Century Foundation, a think-tank. “It averts poverty, it averts extreme distress, but for a lot of people in that place it’s still a limited package. They are still in a hard spot.”

Michele Evermore, a senior policy analyst at the National Employment Law Project in Washington, said recipients of unemployment benefits would still have to wait a few weeks before receiving their payments while states reconfigured their systems, so the delay in reaching a compromise on Capitol Hill had already taken a toll on the most-stricken workers in the labour market.

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And she expressed concern that minority groups will not get the same access to the relief benefits as other workers. “Fewer people get benefits and those benefits are smaller in states with the highest population of black workers, Latino workers and indigenous workers,” she said.

In California, Mr Copridge expressed a sense of powerlessness, saying that until the economy recovers fully, he does not see any viable alternatives to gig work. The stimulus cheque will help subsidise the cost of his car, but even if a mooted increase to $2,000 were approved it would not be a game-changer.

“For most people in the Bay Area, that isn’t going to do jack for them,” he said. “We’re hustlers, but we’re also victims.”



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