Food delivery driver in traffic | Tricky_Shark / Shutterstock
Ask any organizer and you’ll hear how hard it is to reach gig workers. These workers typically lack a physical place of work or regular schedule (though many work all the time), and their work is poorly measured in Census Bureau and Bureau of Labor Statistics datasets. The gig workers themselves agree this is a problem. In a focus group conducted by the Consortium for Worker Education (CWE), one worker said: “There needs to be somebody workers can go to [in order to] voice their thoughts independent of HR, because HR works for the company. They’re being paid by the company.” Interviewees felt that the decks were stacked against them, not knowing to whom they could make complaints and who would take those complaints seriously.
While the number of unincorporated independent contractors can be drawn from the Nonemployer Statistics issued by the US Census Bureau (its data primarily coming from the IRS), and the demographics of workers can be found in the American Community Survey (but only for those for whom gig work is their primary job), there is no single government survey that tracks all nontraditional freelancers, independent contractors, and gig workers. This makes recent research by the Center for New York City Affairs, an applied economics think tank at The New School, even more important. In collaboration with the CWE and dozens of frontline nonprofits, the center surveyed more than four hundred gig workers in Western Queens. What we found was illuminating: nonstop work schedules, economic precarity, and dismayingly high rates of labor violations.
“Gig worker,” “freelancer,” and “independent contractor” all name roles that are not traditional W2 employment. “Gig work” is perhaps most readily associated with jobs arranged through an app or online platform, including delivery or for-hire driving. But independent contractors can be found across most industries—from construction to personal services to the arts. What all these workers have in common is that they often lack basic labor protections, rights, and benefits, such as a minimum hourly wage, a safe workplace, and, in New York State, access to paid family and sick leave.
As economist and former administrator of the Wage and Hour Division David Weil has argued, the use of gig workers is part of a decades-long erosion of worker protections and fissuring of stable jobs into precarious employment. The US Treasury Department concurred in a 2022 report, noting that the gig economy offers workers lower wages, worse benefits, and fewer opportunities for advancement, conditions increasingly “widespread [in] industries with low average pay.”
Our research focused on workers in these low-paid industries, such as transportation, construction, and personal services (a category that includes, for example, nail salons). These sectors tend to have the most vulnerable workers and the highest number of potentially misclassified workers, or those who should be considered employees, and entitled to corresponding benefits, but are misclassified as independent contractors. We distinguish these workers from self-employed workers in higher-paid industries, such as finance and information, who may be legitimately considered independent contractors if they are free from control of the hiring company, work for multiple employers, and set their own pay rates. We also focus on independent contractors who put in full-time hours or for whom gig work is their primary source of income, rather than those who are earning a few dollars on the side.
In accordance with the Department of Labor classification, our research is based on the premise that independent contractors should have control over the pace and content of their work, set their own hourly rates, and perform jobs that are not core to the company they are hired by (like a pipe fitter who is hired to do some work at a tax accountant’s office). As David Weil has pointed out, there are certainly gray areas where workers have roles between that of an employee (for example, performing a job central to a company’s operations, supervised by the employer) and an independent contractor (like setting one’s hourly rate and determining the timing and manner of service delivery). Uber, for example, has argued that though they set pay rates for drivers and incentivize their behavior and location through nuanced pay algorithms, they are not actually a transportation company, they are a technology company. This, despite the fact that “Uber” has entered the everyday lexicon as a verb for hailing a for-hire car to get from A to B.
Our analysis of New York State’s labor market found there are an estimated 873,000 workers in these low-paid industries, nearly 10 percent of the state’s 8.8 million workers. We estimate a little over 20 percent (190,000) of this pool are gig workers whose work is mediated by online labor platforms. The reclassification of even a portion of these workers poses a major problem for the solvency of many of the state’s social safety systems. Between 2008 and 2015, the state identified nearly 1 million workers as misclassified or paid off-the-books and estimated a cost of $290 million in unpaid unemployment insurance taxes and penalties.
Misclassification weakens the state’s social insurance programs and puts law-abiding businesses at a disadvantage. It also harms workers. In New York, full-time independent contractors in low-paid industries earned roughly two thirds of what their employee peers did in the same industries. For example, independent contractors in transportation receive only 75 percent of wages paid to their payroll counterparts. And because they must cover considerable overhead expenses, their net earnings are likely even lower relative to payroll workers. We found that in New York, full-time independent contractors are more likely to rely on Medicaid and twice as likely to lack health insurance as payroll workers in the same low-paying industries.
Our survey of gig workers also shed light on the working conditions of this diverse group, which includes delivery workers, Uber drivers, dog walkers, graphic designers, and substitute teachers. While we paid attention to differences between two broad categories—service, administration, and construction workers, on the one hand, and professional, educational, and arts workers, on the other—we also found that they share significant common challenges. Our survey discovered that gig workers often work full-time weeks, at a typical five days a week with a median of eight hours per day. Two-thirds rely on gig work as their primary source of income, while the other third supplement their payroll jobs with gig work. Despite gig work being touted as a side hustle, for most it is their main source of income, and they often struggle to pay bills.
About 50 percent of gig workers surveyed said gig work was essential for meeting basic needs, yet only 45 percent said they regularly covered all their costs. One-third were not confident they could make the next month’s rent or mortgage payment, and nearly half relied on public assistance. Immigrant and undocumented workers were particularly vulnerable to predatory practices. When we asked gig workers why they didn’t find a payroll job instead, many pointed to difficulties navigating the job market, finding work with flexible schedules, accessing childcare, and language barriers. These problems all point toward practical ways workforce organizations, advocates, and unions can intervene.
Another significant finding was the high level of labor standards violations reported by gig workers. Over half of those surveyed had filed labor complaints with the New York City Department of Consumer and Worker Protection, the New York State Department of Labor, or a union or other worker-representing group. The top occupations for filing complaints were nurses and health workers, software developers, cleaners, and delivery workers. Further research into the content of these complaints is needed, but they likely relate to wage theft, late payments, and unsafe working conditions.
The economic vulnerability of gig workers is part of what Arne L. Kalleberg called “a new age of precarious work that represents a fundamental shift toward widespread uncertainty and insecurity.” Over the past three decades, American payroll jobs have fragmented and deteriorated into lower-paid, and less protected forms of work. These fissures have eroded financial security and wellbeing in working people’s lives.
But there are ways we can move forward. Clear rules and active regulation can improve the lives and working conditions of gig workers in a wide range of industries. We might look to the 2010 State Construction Industry Fair Play Act, which created a presumption of employment in the construction sector and set clear standards for enforcement. Or the Freelance Isn’t Free Act, which protects freelancers against late or non-payment, the city’s for-hire minimum pay standards, and the package of measures the City Council enacted to protect app-based food delivery workers from wage theft, ensure their access to restaurant bathrooms, and authorize a minimum compensation standard.
City and State legislators, unions, and service providers must unite to ensure gig workers receive the protections and resources they deserve. Next steps could include enacting industry-specific standards, to protect from conditions like those affecting nail salon workers, or broadening the presumption of employment. Our survey conducted in Queens suggests that clear standards for enforcement and protection are critical to stem the growth of what threatens to become a new realm of exploitation in New York’s economy.
