Concert workers need better payroll access | Payments Source
Displaced workers are turning to the odd-job economy in the wake of the COVID-19 pandemic, and likely will continue to do so.
By some estimates, concert workers will make up more than half of the workforce by 2023, and that growth has likely been accelerated by the pandemic. While many are now struggling to make up for lost income, turning to work in the gig economy isn’t always a path to financial health – 58% of full-time workers say ‘They would have a hard time covering an unexpected expense of $ 400.
Concert workers are essential workers who are the lifeblood of our economy. There is a path to financial health for them – and it only requires a little adjustment in the way they are paid. Making gig workers’ wages automatically available for free every day or after every completed shift would benefit everyone, while providing a win-win scenario for the worker and the platform. It’s also an easy way for the payments industry to have a truly positive impact on the financial health of concert workers.
Here’s why on-demand platforms should make payment automatic (free of charge):
Workers in the gig economy are facing a “cash flow gap”. Concert workers don’t get the pay structure they need to function; most gig workers are paid weekly through slow bank transfers, while they continue to incur daily expenses. Although some platforms offer instant payment options, they usually come with a fee. This “cash flow gap” in which gig workers incur high operating expenses creates a need – they need their funds to be readily available at no cost so they can keep working and generate more income. It also presents a challenge for some freelancers who do not get paid on a regular basis and puts them at risk of paying overdraft fees, taking on expensive payday loans, or resorting to high interest credit cards.
Predatory lending is not the solution. Payday loans are not the answer – many payday lenders charge exorbitant fees and often leave borrowers deeper into the debt cycle. However, automatic payment offers an alternative. Also consider this: 85% of gig workers would work more if they could get paid faster.
Concert workers are essential workers. Many concert workers perform necessary tasks such as delivering to restaurants, grocery stores, and even pharmaceuticals; providing transportation to other essential workers; and more. Automatically giving gig workers their wages will ensure that a low gas tank, flat tire, or other unforeseen expense doesn’t derail them – or make their jobs impossible. Many on-demand platforms are already solving these challenges. For example, DoorDash’s Uber Money, Lyft Direct, and DasherDirect offer automatic access to earned wages, as well as debit accounts, rewards, and more.
Working together is the lifeblood of our economy. On-demand and independent platforms should take note: While many Americans may not be financially healthy, it doesn’t necessarily have to be for millions of essential workers. But the wrong method of remuneration can prevent them from performing essential tasks, while limiting their earning potential (and their financial health).