GIG ECONOMY FEELS STRAIN
COVID-19 fallout makes situation dire for workers
In the long-term, it is scary. Two months from now, if I’m still out of work, I’m really going to have to figure something else out.
By late last week, it
TORONTO dawned upon Celeste Morton, a self-employed makeup artist, that she would be completely out of work for at least the next few months.
First came a call from the Toronto Raptors last Thursday.
The team was under a mandated self-quarantine due to the new coronavirus crisis, and players wouldn’t be available to shoot a commercial for which Morton was booked to do makeup.
Within days, the rest of her gigs — weddings, film and television shoots, photography sessions — were all cancelled, wiping out every source of income she was hoping to get over the spring and summer months.
As governments across the world shut borders and mandate social distancing to control the spread of the deadly coronavirus, gig economy workers in Canada are seeing their work drain away by the hour.
And with little access to employment insurance benefits, no paid vacation or sick leave, their situation is increasingly dire.
“My biggest worry is my rent. I’ve recently had to email my landlord telling him about my situation … I can only survive for a month on what I have now,” Morton said.
On Wednesday, the government announced a temporary support plan for workers affected by the crisis. The Emergency Care Benefit would provide up to $900 bi-weekly for 15 weeks for the self-employed who are “quarantined or sick with COVID-19, but do not qualify for EI sickness benefits.” An additional $5 billion was promised to those, including the self-employed who “lose their jobs or face reduced hours” as a result of the pandemic.
It was unclear if Morton would have any immediate access to the $900 bi-weekly benefit since she did not fall into the category of having to self-quarantine because of travel and was not sick with the virus. “It doesn’t give me much reassurance,” she said.
The Bank of Canada estimates that approximately 3.5 per cent of the total workforce is made up of gig economy workers.
The most recent data from Statistics Canada indicates that as of 2016, about 1.7 million workers made up the gig economy — more importantly, the share of gig workers as a percentage of the labour force has been rapidly increasing.
Typical workers who are considered part of the gig economy include Uber drivers, food delivery workers for services like Foodora, and unincorporated self-employed freelancers. The median net gig income in 2016 was a mere $4,303, according to Statcan data.
Shafik Ulam, an Uber driver in Toronto, says that his hours have plummeted as bars and restaurants shut down and residents began complying with calls to maintain social distancing.
“I had just two rides yesterday, compared to maybe 15 that I do in an eight-hour work day,” he said.
Uber has said that drivers whose accounts have been suspended as the result of a public health advice, or who got sick with COVID-19 would be eligible for up to 14 days of paid sick leave.
But Ulam is unsure if he even qualifies for that benefit because the City of Toronto is not completely shut down and there is no emergency law that bans cars from being on the road.
“I haven’t thought about what I’m going to do. I hope everything will be back to normal in two weeks,” he said.
Economist Rosalie Wyonch at the C.D. Howe Institute, who has studied the impact of technology and innovation on the labour market, said that to some extent, the government’s emergency support benefit addresses a gap in labour support policies that Canada currently does not have.
“We don’t really have a good employment insurance system for the self-employed, unless workers opt to pay in and voluntarily sign up for EI. This package is really aimed at addressing that group of people that are not covered by EI, though it remains to be seen how they will evaluate who qualifies on a case-by-case basis,” she said.
At a news conference Wednesday, Finance Minister Bill Morneau emphasized that the emergency COVID-19 fund was designed to target people who have had an income but “seen it dry up over the last few weeks.”
“My only job right now is to make sure Canadians can keep food in the fridge and afford the medicine they need,” he said.
“We’re starting to see that for gig economy workers, the problem is really, inadequate EI support,” said David Macdonald, an economist at the Canadian Centre for Policy Alternatives, a left-leaning think-tank. “We’ve certainly seen recessions, but now we’re talking about mass layoffs that this country has never really seen before. Our EI system will be stretched to the max to try to counter some of this. At present, it is not designed to sustain people’s incomes at this scale.”
For Melissa Doldron, a registered massage therapist who was put out of work last week when the sports clinic she works at decided to temporarily shut their doors, life feels extremely precarious right now.
“If this lasts two or three months, the situation will be critical for me. I would love to hear if there is going to be some kind of suspension of people needing to pay their rent,” she said.
To date, there have been no specific policies targeted to relieve the burden of renters.
But the Big Six banks have promised mortgage deferrals for up to six months, and the Canada Mortgage and Housing Corporation has said that it will offer tools to lenders like loan re-amortization and payment deferrals that might assist homeowners experiencing financial difficulties.
“In the short-term, the mortgage deferrals will alleviate the pressure on needing to collect rent immediately so there’s some knock-on benefit to renters if landlords are flexible,” Wyonch said.
But again, it is unclear who would qualify for mortgage payment deferrals, which will be evaluated on a case-by-case basis.
“You know, I’m generally a calm person and I’ll probably make it work in the very short-term,” Doldron said.
“In the long-term, it is scary. Two months from now, if I’m still out of work, I’m really going to have to figure something else out.”