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Millions out of work, economists claiming different story – here’s the lowdown on the ‘hidden’ gig economy

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POCATELLO, Idaho (KIFI/KIDK) – The clock is ticking, leaving millions of unemployed Americans nervously waiting to see if their federal relief will suddenly lapse.

Federal lawmakers have until December 31st to renew two programs under the CARES Act — The Pandemic Unemployment Assistance Program and the Pandemic Emergency Unemployment Compensation Program.

A whopping 13.5 million people are relying on one of these two programs, and just to put this into perspective – the population of the entire state of Idaho is nearly 1.78 million people, which is a mere fraction of the people relying on these programs. Still doesn’t hit home? This is about three times the population of Los Angeles, which is the second largest city in the US.

The number of workers who have been unemployed thanks to the Covid-19 pandemic rose by 40 percent to 21 million people by November, according to the US Labor Department.

The country is seeing unprecedented unemployment numbers, which keeps getting worse as most of the world is now entering a second, stricter lockdown and Idaho is one of several states rolling-back its reopening stages.

“Honestly, I didn’t know what I was going to do,” Robert Wardlow said, after he was laid-off from his company in Pocatello in June.

Since we are unable to obtain a statement from his former company, we will not name them in this article.

Like millions others, Wardlow immediately started applying for jobs in an unforgiving economy.

The Labor Department shows Wardlow is one of the 19.5 million Americans who were out of a job in September after the pandemic caused their employer to close-up shop. This is actually down from the 24.2 million in August.

Without much luck and a family at home who needed the income, he decided to turn his carpentry skills into a career.

In fact, he makes-up an extremely large population of Americans who were forced to do this exact thing after the pandemic left them jobless – turning their passions and side-hustles into their soul-source of income, known as the gig economy.

But it’s nearly impossible to determine how many people actually make-up the gig economy right now since most of them don’t have to file applications or jump through all of the same federal or state ‘red tape’ most traditional business owners need to do first.

“Someone could make that decision in their bedroom, they become a ‘gig worker’, and they fly under the radar,” Small Business Development Center regional director Ann Swanson said. “Those folks can be in business without doing anything more than just deciding to be.”

Swanson added, the PEUC and PUC benefits are mainly for those who have already been running some sort of business before the pandemic sent them in a financial spiral.

“So, none of that money is earmarked for new businesses at all,” she added.

This means newcomers forced to be a part of the gig economy to keep their families fed, such as Wardlow, are not counted in the 13.5 million people relying on those federal dollars.

Not only that, Wardlow didn’t even apply for any sort of financial help since he realized his time not spent finding new jobs is costing him more than what the government could offer.

After Wardlow is hired to build a new porch or lay tiles, he’s out of a job until he can find someone else who needs his handiwork.

But he still went above and beyond and filled-out all of the proper paperwork to make sure Unique Construction, LLC can operate as a proper company, and has since already hired two employees, whom he made sure he could provide medical insurance benefits.

Most people don’t go to those limits, but he tapped into his 401K benefits and made the decision to turn this company into something that will last for years.

“It’s a lot of work and it gets expensive. It seems like (sic) every new job I get, I have to buy a new tool,” Wardlow said. “I got out $35,000 to buy my trailer and tools and now I think I’m down to just $7,000.”

So we’re seeing a record number of people out of work, and what could be an even larger, unprecedented number of gig workers who are unaccounted for, yet economists continue to claim our unemployment numbers are lowering.

Something’s not adding-up.

Swanson said her department was also bewildered to not see a huge influx in new applications after southeastern Idaho was hit by pandemic’s economic fallout.

“Typically, when there’s a shock in the economy, the real fallout for small businesses doesn’t happen for another 12 to 18 months,” Swanson pointed-out.

So, in areas such as southeastern Idaho, lower-wage workers have been hit the hardest by lay-offs, in terms of how many jobs have been lost, and at the same time, are the slowest to bounce-back.

While this is happening, larger companies such as Amazon, are able to hire workers and even open new facilities (such as the one slated to open this season in the Twin Falls area), as smaller companies continue to cut jobs and side-hustles continue to struggle as the demand for goods and services just isn’t there.

The result is exactly what we’re seeing: a job market being pulled in two different directions at the same time and economists telling a different story than what your neighbors and friends are struggling to deal with in the field.

Swanson stresses, those looking to start their own business should seek the free advice and expertise of the Small Business Development Center. In case you missed that, I’ll say it again – it’s free.

“We offer bookkeeping help, financial statement assistance, and we now have a CPA on staff to answer your tax questions as well as an e-commerce web developer,” Swanson said. “We have a lot of resources for small businesses or anyone looking to start one, and it’s all taxpayer funded.”

Here’s her phone number: (208) 282-4402 and click here for the website.

Here’s Robert Wardlow’s contact information if you’re looking to get ahold of Unique Construction, LLC: (208) 269-8445.

Business Watch / Coronavirus Coverage / Economy / Idaho / Local News / News / Videos

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SEC Proposes to Permit Offerings of Equity Compensation to Gig Economy Workers

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The SEC has proposed amendments that would permit, for a temporary five-year trial period, companies to offer equity compensation to “platform workers” (gig economy workers who provide services by means of an internet or other technology based marketplace platform) under the same regulatory framework available for offerings to employees (available here). The amendments would expand Rule 701 (by which non-reporting companies may issue equity-based compensation without a registration statement) by adding a new subsection, Rule 701(h), and Form S-8 (by which reporting companies issue equity-based compensation) by adding a new General Instruction A.1.(b), to permit these offerings.

The proposed changes would be effective for five years, in order to allow the SEC to assess the impact of these changes in light of the evolving gig economy and to assess whether the issuances are being made for appropriate compensatory purposes rather than capital raising purposes. The proposed amendments take into account comment letters received in response to the SEC’s July 2018 Concept Release, in which it sought input on the ways to modernize Rule 701 and Form S-8. The proposed changes are particularly timely, as the COVID-19 pandemic, shutdowns and “work at home” orders continue to cause a re-thinking of, and evolution away from, the traditional model of a brick and mortar office-based work place.

The SEC noted that these proposed amendments are meant to address solely “considerations relevant to the U.S. Federal securities laws.” To that end, the SEC stated that it is not expressing any opinion on whether platform workers should or would be considered “employees” for the purposes of other laws or regulations.[1]

In a separate but simultaneous release, the SEC proposed amendments to more generally modernize and simplify the requirements of Rule 701 and Form S-8. For our summary of these proposed changes, please see our separate client alert, “SEC Proposes Amendments to Rule 701 and Form S-8.”

Eligible Workers

Under the proposed changes, to be eligible, platform workers must provide bona fide services through or by means of the issuer’s internet-based or other widespread, technology-based marketplace platform or system (a “platform”). Additionally:

  • workers must be unaffiliated with the issuer;
  • workers providing services to third-party end users would qualify, so long as the issuer benefits (g., by receiving a fee or percentage of compensation);
  • consistent with the existing provisions of Rule 701 and Form S-8, platform workers providing services to the issuer, its subsidiaries, its parents and subsidiaries of its parent would be eligible;
  • issuances may be made to an entity, if (i) substantially all of the entity’s activities involve the performance of bona fide services provided through a platform, and (ii) it is wholly and directly owned by the natural person actually performing the services; and
  • consistent with the separately proposed amendments to Rule 701 and Form S-8, former employees and former employees of acquired entities would be eligible for issuances under certain circumstances.

Eligible Services

The provision of certain services would not be eligible for issuances under these expanded rules – services in connection with capital-raising or with promoting or maintaining a market for the issuer’s securities would not qualify, nor would the use of a platform for the sale or transfer of permanent ownership of discrete, tangible goods (e.g., a platform that provided for the permanent transfer of real estate would not be eligible, whereas a platform that provided for the temporary rental of real estate would be).

The services would need to be provided pursuant to a written contract or agreement between the issuer and the platform worker and must be provided through a platform that the issuer operates and controls. In order to demonstrate that it controls the platform, an issuer would need to be able to show that it: (i) provides access and establishes the principal terms of service, (ii) establishes the terms and conditions by which the platform worker receives payment for services and (iii) has the authority to accept and remove platform workers providing services.

Conditions for Issuances

Any issuances would need to be made pursuant to a compensatory arrangement that is evidenced by a written compensation plan, contract or agreement between the issuer and the platform worker. To ensure that the securities are issued/received for compensatory and not speculative purposes, the SEC has additionally proposed that:

  • the amount and terms of securities issued to platform workers could not be subject to individual bargaining, nor could platform workers be permitted to elect between payment in securities or cash;
  • a platform worker could receive no more than 15% of their compensation in any 12-month period, and no more than $75,000 in any 36-month period, in securities issued pursuant to Rule 701 or registered on Form S-8; and
  • any issuances made under Rule 701 would be subject to enhanced transfer restrictions – issuers would need to take steps to ensure that these securities would be transferrable only to the issuer or by operation of law.

In order to enable the SEC to assess the use and impact of this temporary expansion, the SEC would require issuers who elect to issue securities to platform workers under Rule 701 or Form S-8 to furnish to the SEC, in a non-public manner (e.g, this information would not be filed or furnished publicly via EDGAR), the following information regarding these issuances at six-month intervals (commencing six-months after the first issuance):

  • the criteria used to determine eligibility for securities awards to platform workers, whether they are the same as for other compensatory transactions, and whether those criteria are communicated to workers in advance as an incentive;
  • the type and terms of securities issued to platform workers during the prior six months, and whether they are the same as for other compensatory issuances in that interval;
  • if issued pursuant to Rule 701, the steps taken to ensure that the securities are non-transferable;
  • the percentage of overall outstanding securities that issuances to platform workers represents;
  • during the interval, the number of platform workers and the number of non-platform workers the issuer has, and the number of platform workers and non-platform workers who received securities; and
  • the number and dollar amount of securities issued to platform workers, both in absolute amounts and as a percentage of total sales under Rule 701 and/or Form S-8, as applicable.

Issuances Treated Like Other Rule 701 Issuances

Similar to other issuances pursuant to Rule 701, these issuances would be excluded from the calculation of outstanding securities under Rule 12g5-1 (e.g., to calculate whether an issuer must register a class of equity securities under Section 12(g)(1)).

Securities sold to platform workers would be included when calculating the amount of securities offered by the issuer, both for determining the maximum threshold amount issuable under Rule 701 and for determining the applicable disclosure requirements of Rule 701(e).

Comment Period

The SEC has requested comments on the proposal within 60 days of the date of its publication in the Federal Register.

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Portable benefits are the future of the gig economy

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The decisive win for Proposition 22 in California on November 3 shows a likely majority of voters—even in the most progressive states—see the value of flexible work that allows people to generate income on demand. That value has only grown amid an ongoing economic crisis that has hammered employment in nearly every industry in New York and left thousands searching for immediate opportunities to earn income.

Rather than repeat California’s tumultuous past year, New York’s leaders should learn from it and deliver what voters are asking for: a bold plan to ensure that independent workers in all sectors can access universal, portable benefits, gaining financial security without losing flexible work.

It was just over a year ago that California passed Assembly Bill 5 into law, which established strict guidance on classifying workers as independent contractors and challenged the ability of app-based platforms to operate. California’s new ballot measure reverses course, allowing app-based drivers to work as independent contractors while extending a range of benefits—and earning the support of workers, tech companies, and voters.

In New York and across the nation, the problem has grown increasingly clear. Far too many workers in the gig economy live in a state of perpetual financial precarity. Few have access to the benefits that typically flow from full-time employment — including health care, worker’s compensation, paid leave, life insurance, retirement savings, and more.

The result is an unacceptable level of risk for workers and their families, and the potential for the further erosion of the middle class.

But faced with so many obstacles to an inclusive economic recovery, tackling this challenge shouldn’t require a knock-down, drag-out fight. Instead, New York policymakers should bring together workers and industry to establish a universal system of portable benefits for the future workforce.

This system would allow New Yorkers to tap into the flexible, income-generating opportunities that gig platforms are providing — even amid a major economic downturn — while ensuring that independent workers have the financial security to thrive.

Under this system, benefits from health care to retirement accounts would move with independent workers from job to job. Freelancers, gig economy workers, and other independent contractors would have the ability to access a wide range of benefits through a regulated exchange, including offerings from established companies, nonprofit organizations, unions, start-ups, and government. As is the case in Oregon and California, employers and platform companies should make substantial financial contributions to at least some of these benefits.

To ensure that lower-wage workers are equally supported, legislators could levy a small surcharge on services rendered through app-based platforms—similar to New York’s current Black Car Fund—with the revenue used to cover any employee contributions to portable benefits for lower-income workers.

New York policymakers are not alone. Recent initiatives in Oregon, Colorado, Washington, and Philadelphia demonstrate growing support for the portable benefits framework—with Oregon’s approach showing particular promise.

Now New York has the opportunity to fit all of these pieces together into a visionary, integrated system: taking decisive action to rebuild a more inclusive economy while gaining a major competitive advantage over other states where the future of independent work is in doubt.

As California’s experience with AB 5 and now Proposition 22 makes clear, the most effective path forward is to create systems that support the financial security of independent workers — not limit their existence.

Winston C. Fisher is co-chair of New York City’s Regional Economic Development Council. Eli Dvorkin is the editorial and policy director for the New York City-based Center for an Urban Future.

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Comprehensive Report on Gig Economy and Sharing Economy Market 2020 | Size, Growth, Demand, Opportunities & Forecast To 2026

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“Gig Economy and Sharing Economy Market is growing at a High CAGR during the forecast period 2020-2026. The increasing interest of the individuals in this industry is that the major reason for the expansion of this market”.

Gig Economy and Sharing Economy Market research is an intelligence report with meticulous efforts undertaken to study the right and valuable information. The data which has been looked upon is done considering both, the existing top players and the upcoming competitors. Business strategies of the key players and the new entering market industries are studied in detail. Well explained SWOT analysis, revenue share and contact information are shared in this report analysis.

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Top Key Players Profiled in this report are: 

Couchsurfing, Lyft, Uber, Door Dash, Airbnb, Uber, Postmates, GoGoGrandparent, BlaBlaCar, Airbnb, Upwork, Task Rabbit, Fiverr, Lyft, SilverNest, Zipcar, Rover

The key questions answered in this report:

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  5. What are the Trending Factors influencing the market shares?
  6. What are the Key Outcomes of Porter’s five forces model?
  7. Which are the Global Opportunities for Expanding the Gig Economy and Sharing Economy Market?

Various factors are responsible for the market’s growth trajectory, which are studied at length in the report. In addition, the report lists down the restraints that are posing threat to the global Gig Economy and Sharing Economy market. It also gauges the bargaining power of suppliers and buyers, threat from new entrants and product substitute, and the degree of competition prevailing in the market. The influence of the latest government guidelines is also analyzed in detail in the report. It studies the Gig Economy and Sharing Economy market’s trajectory between forecast periods.

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Global Gig Economy and Sharing Economy Market Segmentation:

Market Segmentation by Type:

Gig Economy
Sharing Economy

Market Segmentation by Application:

Shared private car
Shared private residence
Independent contractor
Freelancers

Regions Covered in the Global Gig Economy and Sharing Economy Market Report 2020:
• The Middle East and Africa (GCC Countries and Egypt)
• North America (the United States, Mexico, and Canada)
• South America (Brazil etc.)
• Europe (Turkey, Germany, Russia UK, Italy, France, etc.)
• Asia-Pacific (Vietnam, China, Malaysia, Japan, Philippines, Korea, Thailand, India, Indonesia, and Australia)

The report provides insights on the following pointers:

  1. Market Penetration: Comprehensive information on the product portfolios of the top players in the Gig Economy and Sharing Economy market.
  2. Product Development/Innovation: Detailed insights on the upcoming technologies, R&D activities, and product launches in the market.
  3. Competitive Assessment: In-depth assessment of the market strategies, geographic and business segments of the leading players in the market.
  4. Market Development: Comprehensive information about emerging markets. This report analyzes the market for various segments across geographies.
  5. Market Diversification: Exhaustive information about new products, untapped geographies, recent developments, and investments in the Gig Economy and Sharing Economy market.

Table of Contents

Global Gig Economy and Sharing Economy Market Research Report 2020 – 2026

Chapter 1 Gig Economy and Sharing Economy Market Overview

Chapter 2 Global Economic Impact on Industry

Chapter 3 Global Market Competition by Manufacturers

Chapter 4 Global Production, Revenue (Value) by Region

Chapter 5 Global Supply (Production), Consumption, Export, Import by Regions

Chapter 6 Global Production, Revenue (Value), Price Trend by Type

Chapter 7 Global Market Analysis by Application

Chapter 8 Manufacturing Cost Analysis

Chapter 9 Industrial Chain, Sourcing Strategy and Downstream Buyers

Chapter 10 Marketing Strategy Analysis, Distributors/Traders

Chapter 11 Market Effect Factors Analysis

Chapter 12 Global Gig Economy and Sharing Economy Market Forecast

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