A new study suggests the ‘lost generation’ has the most significant challenges, but have little time to switch paths
The gig economy has provided new income opportunities for a wide variety of individuals. But according to new research, one generation may be getting the short straw in terms of their prospects for financial wellness.
In a new paper titled Gig Economy Impact by Generation, US-based financial firm Prudential Financial studied the realities faced by millennials (ages 18-35), Gen Xers (ages 36-55), and Baby Boomers (age 56 and older) who exclusively take on freelance work through the gig economy.
Millennial gig workers were found to view gig work as an opportunity to have the flexibility and freedom to pursue long-term aspirations. On the other hand, Gen Xers and Boomers were more likely to get into gig work due to circumstances beyond their control.
Prudential found that Gen X gig workers were least satisfied with their current circumstances, and most eager to switch to a traditional job. Sixty-three per cent of that “lost generation,” as they were called, said they were struggling financially, as opposed to 49% of millennials and 32% of boomers.
Gen X gig workers were found to work the longest hours among any generation, yet they still earned less than Boomers on average (US$36,300 compared to US$43,600). In addition, the inconsistent cash flows from gig work made it hard for Gen Xers to stick to a budget (cited by 40% of Gen X respondents) and make ends meet (cited by 37%).
Comparing life situations across generations, Gen X respondents were likely to live in a single, relatively low-income household; they were generally mid-career and doing mostly non-professional work. Millennial respondents typically lived in multiple-income households, performed more professional varieties of gig work, made more use of technology-based job search platforms, and tended to be stay-at-home parents or students. Meanwhile, the Boomers surveyed had higher levels and multiple sources of income, as well as access to employer-sponsored benefits; they also tended to be in committed relationships, have their own home, and not have children younger than 18 years old.
“Gen X gig workers seem to face the most financial wellness challenges, but do not have as much time to shift their career paths and improve their financial lives,” said Prudential Group Insurance President Jamie Kalamarides. “These findings are a call to action for advisors, employers and policymakers, who collectively have the ability to help gig workers set up retirement savings plans, acquire adequate insurance coverage, and develop budgets.”
Looking at gig workers’ sources of financial advice, Prudential found that 30% of millennials, 42% of Gen Xers, and 35% of Baby Boomers had no source of advice at all. Focusing on respondents that regularly get financial advice, millennial and Gen-X respondents said their top source was family or friends (52% of millennials and 32% of Gen Xers), while 26% of Boomers said they approach professional financial advisors.
