Precarious Employment, Wage Theft, and Financial Health: Evidence from a Nationally Representative Survey

• In Event: Advancing Economic Justice: Employment and Safety Net Approaches

Abstract

Background and Purpose: Work is becoming increasingly uncertain, unstable, and insecure (Kalleberg, 2009), particularly for lower-wage workers. The general phenomenon of precarious work including the rise of “gig” work and other alternative work arrangements has been well studied (e.g., Katz & Krueger, 2017). Gig and other self-employed workers experience greater financial insecurity compared to those who work for an employer (Auguste et al., 2022, 2023), yet working for an employer does not guarantee financial security as employers vary widely in pay, benefits, and working conditions. Less studied is the relationship between precarious work and household financial security, including the use of public benefits. Similarly, while other research has examined precarious employment in terms of employment security, income volatility, and job attachment, there is limited research examining precarious employment through the lens of exploitative labor practices such as wage theft. This study seeks to better understand the relationship between precarious employment and financial security and public benefit use among lower-wage workers.

 

Methods: Data for this study are from wave one of the Workforce Economic Inclusion and Mobility survey administered in November 2023 with a nationally representative sample (N=2,426) of U.S. lower-wage workers from the AmeriSpeak panel. We restricted the sample to respondents who worked for an employer (N=1,584) and coded employment precarity based on the following conditions: temporary position, wage theft, unpredictable scheduling, and/or a lack of paid sick leave. We ran a series of probit regressions to produce predicted probabilities of multiple indicators of financial insecurity controlling for demographic variables, household income, partner’s employment, health insurance, and non-retirement savings and examined the relationship between precarious employment and use of public benefits.

 

Preliminary Results: Nearly half (46%) of the sample met the criteria for precarious employment. Workers in precarious jobs were more likely to also do gig work (36% vs. 17%, p < .001) and had worse financial security for six out of nine indicators compared to workers in non-precarious jobs, controlling for income and assets. Compared to workers in non-precarious jobs, workers in precarious jobs were more likely to report problems paying bills (56% vs. 41%, p < .001), having no emergency (58% vs. 49%, p < .05) or retirement (40% vs. 29%, p < .05) savings, problems making student loan (66% vs. 40%, p < .001), credit card (21% vs. 14%, p < .05), and medical bill (28% vs. 20%, p < .05) payments and using SNAP (24% vs. 13%, p < .001), Medicaid (30% vs. 24%, p < .001), and housing assistance (9% vs. 3%, p < .001).

 

Implications: To mitigate the risk of financial security and lessen dependence on public benefits, employees should enjoy greater protections as some states have implemented concerning guaranteed paid sick leave, predictable work schedules, and wage theft. A lack of these protections shifts economic risk from the private sector (via reduced labor costs) to the public sector (via increased public benefits spending).

 

Author

• Stephen Patrick Roll, Washington University in St. Louis
  Presenting Author