Gig Economy Workers Should Have Unemployment Protections, Experts Say

From Progress Illinois:

by Ellyn Fortino

Workers in the gig economy and other independent contractors should be eligible for temporary unemployment benefits if they lose their jobs, according to a new report.

The Center for American Progress, Georgetown Center on Poverty and Inequality, and the National Employment Law Project have a package of proposals aimed at adapting the unemployment insurance (UI) system "for 21st century realities."

The proposed reforms include creating a "Jobseekers Allowance" for workers ineligible for traditional UI, including independent contractors and others in the "gig" or sharing economy, such as Uber and Lyft drivers. A Jobseekers Allowance would also cover individuals with limited work history, including young people transitioning from school to work and people re-entering the labor force after caring for a family member or recovering from an illness.

UI is a federal-state program that temporarily replaces wages for individuals who lost their job through no fault of their own and are actively looking for employment, among other eligibility requirements. Workers in most states can receive UI benefits, which are paid by businesses through payroll taxes, for a maximum of 26 weeks.

About 2.1 million Americans are collecting unemployment benefits, according to the Labor Department, which reported that 7.4 million individuals were unemployed last month. The average weekly unemployment insurance benefit is $336.

"We are at a historic low in terms of jobless workers having access to unemployment protections--only about one in four jobless workers receives UI benefits today," said Indivar Dutta-Gupta, director of the Georgetown Center on Poverty and Inequality's Project on Deep Poverty. "The failure to modernize our UI system hurts us all but has a disproportionately negative effect on women, low-paid workers, younger workers and workers of color."

Through a Jobseekers Allowance, workers ineligible for UI could receive $150 per week for up to 13 weeks. According to the groups' estimates, such a program would cost $10.9 billion annually. In 2014, the UI system as a whole cost $42 million.

"While JSA's weekly benefit would be quite modest relative to UI--and its job-search requirements at least as stringent as UI--the JSA would encourage workforce participation, support geographic labor mobility, and promote family stability and social cohesion," reads the groups' report.

The Jobseekers Allowance is just one of many ideas the think tanks recommend to strengthen unemployment protections in the country. Bolstering UI's re-employment services, increasing UI participation, expanding UI eligibility, improving the "adequacy of UI benefits," setting a uniform benefit duration of at least 26 weeks, and imposing "solvency requirements for states' trust fund[s]" are among the recommendations.

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