Members of America’s Gig Economy, including contractors in the tech sector, and laid off workers would be among those to benefit from the Trump administration’s $1 trillion coronavirus economic relief package.
Treasury Secretary Steven Mnuchin on Tuesday previewed a plan to send checks of $1,000 or more in emergency funds to all Americans except for the wealthiest within the next two weeks. He described the concept in broad terms during a mid-day televised White House briefing before quickly departing to discuss the details with Senate leaders. U.S. Sen. Mitt Romney, R-Utah, on Monday floated a similar proposal of giving $1,000 to every American. The Senate is considering multiple relief proposals.
“Americans need cash now,” Mnuchin said. A sudden infusion of cash for nearly all Americans is intended to help a massive group of people, including those who don’t have regular paying jobs or any job at all. That approach could be preferable to a payroll tax holiday, which would take weeks to roll out, President Trump said during the briefing. A payroll tax holiday also would only apply to people who are working and have payroll taxes regularly withheld.
Mnuchen also told GOP senators on Tuesday that without a stimulus package, the U.S. faces a 20% unemployment rate in coming months, according to sources that spoke to CNN and Bloomberg, among others. By comparison, the rate was 25% in the Great Depression and was 10% in the recession of 2010.*
Many workers have been laid off with coronavirus-induced closures of restaurants, bars, movie theaters and gathering places. The Gig Economy generally refers to jobs normally held by freelancers who connect to customers through digital networks. That includes software and hardware developers who run sole proprietor or small businesses that farm out work on a case-by-case basis to small and large companies. Other examples include artists selling crafts on Etsy and drivers working for ridesharing companies such as Uber.
Mastercard and Kaiser Associates measured the gross volume of the global Gig Economy at $204 billion in 2018, with 58% generated by ridesharing and other transportation-based services. In a study, the authors projected it will grow to $455 billion in 2023.
Included in the Gig Economy are freelancers that do coding and other tech work, design, microwork, writing and translation and administrative and other business work, according to the study. This sector was valued at about $7.7 billion in 2018, the authors said.
The Trump administration coronavirus aid package is valued at $1 trillion, Mnuchin told congressional leaders, but the total value of the plan is a moving target. That would include $500 billion in direct aid to households, according to a senior official who talked to Roll Call.
President Trump also said at the briefing that hard-hit airlines would get some form of relief, which Roll Call put at $50 billion. An additional $200 billion would go for expanding loans to small businesses.
Senate Minority Leader Charles Schumer, D-NY, was planning to submit a proposal for $750 billion in relief. Other legislative measures are under consideration as well.
The Information Technology & Innovation Foundation (ITIF) recently urged Congress to create a stimulus plan “to assist those who are hardest hit, first and foremost ensuring they have adequate unemployment insurance.”
But ITIF also argued that “even if the federal government mails consumers checks…they are not likely to spend the money on the most hard-hit sectors, such as restaurants, travel services and lodging.” ITIF argued also that “technology should be part of any stimulus plan” and said advanced information and communications technology are important for dealing with national crises like the coronavirus pandemic.
Some business leaders have argued that thriving businesses should reach out to help contract workers and the homeless during the coronavirus crisis. “We have to step in in the interim, to continue paying hourly workers, custodial and café workers,” said Cisco CEO Chuck Robbins in an interview on CNBC. “Those are the ones who are going to suffer…during this crisis.”
Cisco employees get excited by working at a company that helps the community, which leads to greater innovation and business success, he said.
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* The original version of this story did not include comments about a potential unemployment rate of 20%.