Sarah Felton, a 34-year-old digital marketer in Orlando, Florida, was offered a job before the COVID-19 pandemic, but once the crisis hit, the firm enacted a hiring freeze and couldn’t bring her on board. Suddenly unemployed, she wasn’t sure how she was going to pay April rent—until she got an email from Steady, an app that helps gig workers find local jobs, about the Workers Lab’s COVID-19 Rapid Response Fund. She filled out a brief survey on her current situation, and within a few weeks received $900.
“‘Relief’ is possibly an understatement,” Felton says of how she felt getting that money, which covered her rent. She did eventually receive her stimulus check, but not until after April 1. For those who already have savings or are more prepared for an emergency, “the stimulus check would’ve probably arrived at an okay time,” she says, but many Americans live paycheck to paycheck. “For the vast majority of us that don’t have that kind of savings, I feel like the stimulus check was a little too late.”
Gig workers’ incomes vary every month, and the recurring expense of rent can quickly become an emergency. That’s even truer during the COVID-19 pandemic. The Workers Lab, an organization that funds experiments and innovations to build power for low-wage working people, already learned this, though, from its Workers Strength Fund, which offered emergency cash transfers of up to $1,000 to gig workers over the course of 2019.
“The Workers Strength Fund was an experiment we ran to see what kind of difference a one-time, no-strings-attached cash grant in the amount of $1,000 would make in the lives of gig workers when an emergency hits,” says Adrian Haro, interim CEO of the Workers Lab. A 2018 Federal Reserve report found that nearly two-thirds of workers didn’t have enough savings to cover a $1,000 emergency.
Throughout 2019, that fund gave out more than $345,000 (it was sponsored by Google.org, the Rockefeller Foundation, Prudential Financial, and Commonwealth), helping 350 gig workers cover emergency expenses.
An in-depth report about what the Workers Lab learned from that experiment is coming out later in May, but Haro shared some preliminary findings. The first is that, for many people, rent itself is a recurring emergency. Another is that having a safety net has a huge psychological benefit. “Just knowing there was a tool out there, a pot of $1,000 that was just waiting out there, helped reduce a considerable amount of stress in their lives,” he says. Housing topped the list for what workers used this money for, followed by auto repairs. It’s clear, Haro says, how “just one unexpected hit can set off a spiral of financial misfortune.”
The COVID-19 pandemic has become that unexpected hit for millions of Americans. “In many ways, this virus crisis has confirmed a lot of what we learned from the Workers Strength Fund,” Haro says. “The headline there is that emergency cash has tremendous value for workers when they need it, and that as a country, we are woefully unprepared to deliver that value to workers when it is needed the most, like right now.”
As the government began to shut down the economy, it was clear that infrastructure just didn’t exist to provide enough emergency relief, so the Workers Lab set up the Rapid Response Fund, also called The Workers Fund, in partnership with Steady, which also helped get the word out for the Workers Strength Fund. Workers can get up to $1,000, though the average draw is just over $800. “What we said as a qualifier was, ‘Keep in mind that this is a shared fund—we only have so many resources,’ and that really resonated with workers,” Haro says. The fund has already given out more than $330,000 to over 400 workers. Though it’s otherwise donation funded, it was kickstarted with a $300,000 grant from the Marguerite Casey Foundation, a Seattle-based grantmaking organization that helps low-income families mobilize their communities. As long as the Workers Lab has funds, Haro says, they’ll continue to distribute them.
Having already done an emergency cash-transfer experiment, the Workers Lab was ready to help out gig workers financially during the pandemic. But though emergency cash can help, it’s not a silver bullet, Haro adds. “[It’s] one piece of the social safety net that is currently broken and insufficient and that needs to be not only revisited but reformed,” he says, “and reformed in partnership with workers.” The Workers Lab was able to create this safety net in a matter of weeks. Haro hopes now that leaders and lawmakers can start crafting the social safety net of the future, “so that it meets workers where they actually are.”