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A Tale of Two Workers: The Urgent Need to Support Part-Time Workers

A Tale of Two Workers: The Urgent Need to Support Part-Time Workers 1

Mariel Beasley, Co-founder, Common Cents Lab

The “Great Resignation” and low unemployment rates have gotten some employers scrambling to offer better wages and novel benefits to attract and retain their workforce. Yet, 24 million part-time workers have been largely left out of these gains.

While part-time status typically deprives them of the traditional employer-offered benefits, like paid sick leave, vacation, health insurance, or retirement savings, it also adds a significant amount of logistical stress and uncertainty to their lives. Uncertainty compounds stress, which leads to fatigue and irritability, decreases performance, and increases errors.

The life of a typical part-time, hourly employee is filled with uncertainty: not knowing when they’ll work, how long they’ll work, or when they’ll work next. Not only is this bad for workers, this stress also directly impacts a company’s bottom line through increased turnover and no-shows, decreased productivity, and increased preventable workplace accidents.

In this moment of opportunity for the American workforce, let’s design a better system for part-time workers as well:

Have Companies Commit to Publishing Schedules Sooner

Part-time employees, particularly in retail and food services, typically only receive a few days notice ahead of their work schedules. This makes it logistically challenging for households to pick up additional work elsewhere to supplement their income, but it also makes it near impossible to plan childcare and transportation.

Last minute changes to their schedule can make them rely on costlier alternatives, like needing to pay for a Lyft or Uber or hire a babysitter because a friend isn’t available on short notice. It also risks eroding their social supports because of the frequent last-minute requests.

While companies say they need the last-minute flexibility, our research with Homebase, a scheduling platform used by thousands of businesses, found that simple nudges within the scheduling platform led to thousands of employees getting earlier notice of their schedule. First, we made scheduling easier by creating an easy-to-use template. This led to 33% of the employers in our pilot giving at least one week’s notice to employees. Second, we added an implicit expectation of posting a schedule sooner by flagging when a schedule was less than two weeks away and still not published. Now almost 40% of employees provided at least one week’s notice.

Expand Unemployment Insurance to Include Benefits for Under-Employed Workers

3.7 million people are under-employed. This means that they would like to work more hours, but their employer is not able or willing to provide them with those hours. This mismatch between hours wanted and hours offered contributes to the financial stress of the employee. When households are financially stressed, accidents happen.

A study by Jirs Meuris and Carrie Leana found that financially stressed drivers cost a small- to mid-sized short-haul trucking company an average of $1.3M in preventable workplace accidents. Part-time workers in construction, food service, retail, tourism, etc. all face increased financial insecurity, which likely contributes to the $192 billion price tag of preventable on-the-job injuries.

A concrete way to improve the financial stability and reduce some of the financial stress of part-time workers is to provide income-smoothing benefits through “under-employment insurance“. A small investment by a company to provide this benefit for their workforce could end up paying outsized dividends in prevented accidents and increased performance.

Support Well-Designed, Innovative Solutions like Portable Benefits

Industry and innovators can collaborate to build a system of portable benefits that include part-time employees. Benefits, like health insurance, paid sick-time and vacation, and 401(k) contributions, are an important contributor to an individual’s financial health. However, providing these benefits through the employer can cost an average of $10.88 per hour worked.

Portable benefits offer a way to expand access to benefits to vulnerable workers while also spreading out the cost beyond any one individual employer, making it more financially feasible as well.

Social Security and the Affordable Care Act (ACA) marketplace are perhaps the two best examples of portable benefits and have important lessons in thinking about how to design a more comprehensive portable benefits system. Social Security program automatically enrolls most workers into the benefit, which then automatically follows them from eligible job to eligible job. It is also funded by both employers and employees. The ACA allows people to access health insurance regardless of their employer, but an individual must actively enroll, and it is funded by the government and the individual.

The simple design difference around the “Default Effect”, opt-in versus automatic enrollment, has tremendous differences in participation or even knowledge. In a 2021 survey by Policygenius, 60% of survey respondents said they did not know they could get subsidies to purchase individual plans on the ACA marketplace. A comprehensive portable benefits package will be most effective at increasing financial stability of part-time workers if employees are automatically enrolled, it follows them from eligible job to eligible job, and it is funded by a variety of stakeholders.

Ultimately, employers, industry, and policymakers need to do better by these parttime workers so that we can ensure that America’s economic success story works for all workers.

Mariel Beasley is a co-founder of Duke University’s Common Cents Lab, which is supported by MetLife Foundation and Blackrock’s Emergency Savings Initiative, and she is a principal at Duke University’s Center for Advanced Hindsight in Durham, N.C.

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