Future of Work

Understanding the New World of Work for Financially Vulnerable Americans

As lower-income American workers navigate the growing landscape of non-traditional work, new research findings point to how policymakers and companies can better support these workers.

Understanding the New World of Work for Financially Vulnerable Americans

May 24, 2018

It was back in 1997 when Fast Company first coined the phrase “free agent” to describe a new breed of workers. It was a time of rapid change, when retirement watches after 40 years with the same company had all but disappeared and workers (and employers) were looking for something new. Free agents were rushing to develop a portable “brand” that they could peddle in the new project-based world of work.

Fast-forward 20 years and add the rise of the sharing economy, the decline of “good” jobs for low-skilled workers and a couple of notable financial upheavals; what many thought would be just a blip is now a confirmed trend.

Nontraditional firms—platform-based and self-employed, sole proprietor, contractors and freelancers—have outpaced the growth of traditional firms during the last two decades. Nonemployer firms have grown overall by 2.6 percent annually between 1997 and 2018, according to the Brookings Institution, while payroll employment has grown by only 0.8 percent.

While many see this rise of nontraditional jobs as a cause for concern, workers themselves appear to appreciate many aspects of it, according to a new comprehensive analysis of lower-wage workers in nontraditional jobs from Uber drivers to freelance construction workers. The survey, focus groups and in-depth discussions with more than 1,000 workers reveal that there’s much to like about these jobs. Yet, financial instability and lack of benefits remain prevailing concerns.

New study peers under the rug

The study by Commonwealth is the first to focus on lower-wage workers and how the changing nature of work affects them—and by extension, how best to support them. The survey was supported by the Rockefeller Foundation and the Mastercard Center for Inclusive Growth.

Workers’ households earned less than $55,000 a year and were working in both traditional and nontraditional jobs. Nontraditional jobs included temp agencies, gig platforms, subcontract work and freelancers.

The jobs and work arrangements varied widely. Drew, for example, opted for freelance construction work to tend to his wife’s medical issues. Elizabeth subcontracted as a personal care assistant to special needs children. Adrian was an independent manager, producer and designer.

Given the variety, the researchers sorted the jobs into several categories, ranging from traditional jobs to freelancers.

Within the employment categories, researchers distinguished jobs as either typical or atypical based on a set of attributes associated with traditional employment:

  • Single employer
  • Predictable work schedule
  • W-2 tax forms
  • Health & retirement benefits
  • Keep current job into future
  • Guaranteed weekly work hours
  • Tools and resources
  • On-the-job training

Typical traditional jobs had most of these attributes while atypical traditional jobs had fewer. Typical nontraditional jobs had few, if any, of the attributes, whereas atypical nontraditional jobs had some of them.

Financial vulnerability remains a big concern

Research has long noted the financial vulnerability of nonpayroll workers, and the survey backs that up. The top three “wants” in a job reflect a desire for more financial security through steady, predictable income and benefits to weather life’s ups and downs.

Income volatility: Although nearly everyone mentioned it, nontraditional workers were more likely to report that their income varied month to month. The majority of all workers placed a steady, predictable income first on their list of things important to them in a job.

No benefits: Health and retirement benefits are largely nonexistent for nontraditional workers. Yet nearly four in ten typical traditional workers lacked those benefits as well.

Limited savings and retirement plans: All workers struggled to save, as the chart shows. But typical nontraditional workers and freelancers were most precarious. Just over half of both groups had less than $100 in savings.

About one-fourth of typical nontraditional workers struggled to save for retirement. Rates were similar, however, for those working in traditional jobs.


Unbanked: Only 56 percent of typical nontraditional workers used checking/savings accounts to handle day-to-day finances versus 94 percent of typical traditional workers. Few are using fintech solutions.

Workers across the spectrum are precarious

Although nontraditional workers are more financially vulnerable, lower-wage workers in traditional jobs are also struggling. Three-fourths (75 percent) of all workers surveyed, nontraditional and traditional combined, had a hard time making ends meet. Nearly one-third of all workers had skipped medical treatments because they couldn’t afford them.


“Good jobs,” in other words, are scarce among lower-wage workers.

But for many workers, the tradeoffs outweigh the risks 

For Lucy, a 31-year-old from New York, her former accounting job “just wasn’t my thing,” though the money was good. Her gig work now allows her to spend more time with her son. Drew, too, likes the flexibility. He can work freelance construction jobs between tending to his wife’s medical issues and still make a decent income.

But, it is often more than flexibility that these workers find rewarding. These jobs, they say, meet what researchers call the higher-order qualities of good jobs, such as being meaningful, having opportunities to learn and having a sense of agency and choice.

“Most of the nontraditional workers in our study do not feel their current arrangement had been imposed on them,” the authors said. Almost all instead described the advantages of their new work, “such as meeting different people in their work, having agency and having the opportunity to serve people directly.” Tellingly, only 31 percent of nontraditional workers report that they are dissatisfied with their current work.

Solutions to better support nontraditional workers 

The numbers working in nontraditional jobs will likely continue to grow, and new supports are needed to help them both navigate the field and gain financial security.

Several states and organizations are working to bolster benefits for this group by collecting surtaxes or fees from clients to fund benefits. The construction industry and several states have developed multi-employer health and benefit plans, which allow workers to take their healthcare with them when switching jobs.

To better support the flexibility that workers prize, tools could be developed to help them more seamlessly find work arrangements. Tools to help workers understand the benefits and challenges of different work arrangements are also needed. The existing job-finding platforms could be improved, according to workers, to prioritize the needs of workers.

“The privilege of choice—the opportunity to find employment suited to their household circumstances, professional desires and personal needs—is a potential benefit to everyone,” the authors write. As such, helping workers find a viable work arrangement that meets both their immediate and longer-term needs will be critical.

Click here to watch a webinar recording of the research findings.