OnTuesday, March 17, Benjamin Majchrzak, the co-owner of a recording studio in St. Louis, Missouri, launched a GoFundMe campaign. “Many of the musicians and industry people involved [in my business] are staring down a long and scary tunnel with no potential income for a very long time now,” he wrote. “The purpose of this fund,” Majcrzak explained, “is to try to help alleviate that stress and fear.” Since then, the campaign has raised more than $2,500.
In an effort to slow the spread of coronavirus, events across the United States and beyond have been canceled, restaurants have shut down, and, in some places, all but the most essential of businesses have been ordered to close. Layoffs and work stoppages have followed in the shutdown’s wake. This is particularly terrifying for people who work as independent contractors and are typically ineligible for unemployment insurance. That includes most performers, creative freelancers, and Uber drivers.
Many have turned to the crowdfunding website GoFundMe in an attempt to compensate for their lost income and to help colleagues in need. Majchrzak writes that he plans to distribute his fund to musicians and other freelancers who apply for grants.
Over the last decade, GoFundMe has become a symbol for gaps in U.S. health care coverage, with the company’s CEO telling CBS earlier this year that one-third of donations raised through the site cover medical costs. As the economic crisis sparked by the coronavirus unfolds, GoFundMe may also become a grim window into gaps in the country’s unemployment insurance policies.
In the last two weeks, GoFundMe campaigns have been launched to raise funds for local service workers impacted by the cancellation of South by Southwest in Austin, Texas; for stadium workers affected by the suspension of NBA and NHL seasons; and for low-income students at the Rhode Island School of Design, who may no longer have access to financial aid. Countless other individuals have posted GoFundMe campaigns to raise funds for themselves, citing missed tips, reduced gigs, and dried up performance dates.
Author Ijeoma Oluo helped organize a GoFundMe campaign to support the arts community in Seattle, one of the cities hit hardest by the pandemic. “I know that so far every speaking engagement I had for the next month has been canceled or postponed, and I’m in the very rare and privileged position to be able to weather this financially,” she wrote on the campaign page. “Many are not.” The fund has raised nearly $150,000.
According to the U.S. labor department, which uses relatively narrow criteria to define independent contractors, more than 10 million Americans identify as freelancers in their main job. And it’s not just these freelancers who may end up outside of the social safety net as businesses close.
Only 28% of jobless Americans, a near-record low proportion, received unemployment benefits in 2018. The low rate may be partially explained by workers not bothering to file necessary paperwork when they could find another job relatively quickly in a good economy. But, writes Andrew Stettner, a senior fellow at the progressive think tank The Century Foundation, “Part of the problem lies with the troubled computer modernization of UI web applications.” Unemployment applications are difficult to navigate “for those accustomed to filing by phone or in person, especially for non-English speaking immigrants of color.” In addition, Stettner writes, “a wave of benefit cuts that came after the Great Recession have never been reversed. Ten states reduced their basic unemployment insurance package to fewer than 26 weeks, the historic standard of benefits since the 1930s.”
Alastair Fitzpayne, an executive director at the Aspen Institute and a co-author of the organization’s report on the state of unemployment benefits, says that part-time workers and those with sporadic income are often ineligible for unemployment benefits. States require that recipients of unemployment insurance payments meet minimum earnings thresholds before losing their jobs—in many states, for multiple quarters in a row. If you work part time or seasonally, you might not make the cut. “You have eligibility requirements that made sense in an era where work is more stable,” Fitzpayne told OneZero. “In a world where earnings have become more erratic, these earnings thresholds become a bigger obstacle.”
State agencies administer unemployment benefits, but they follow guidelines set by the federal government. A coronavirus response bill includes some help for states, like an influx of cash to state unemployment agencies and waiving criteria that could be used to disqualify applicants. New guidance from the department of labor also gives states flexibility in providing unemployment insurance to those who have been laid off temporarily or quarantined due to coronavirus.
Even with these emergency changes, some unemployed Americans will slip through the cracks during the coronavirus pandemic. And many of them will end up on GoFundMe — which urges users who land on its homepage to start and donate to campaigns that benefit people impacted by the virus. (GoFundMe did not immediately respond to a request for comment on this story.)
The problem isn’t the urge to help or seek help in this way, but that the support it provides will be inherently unequal and insufficient.
As Nathan Heller put it while writing about GoFundMe and medical care for the New Yorker earlier this year: “[The] advantages in crowdfunding still go to the people who arrive with the most powerful connections and the best networks. After that, there is competition with perverse incentives: Whoever has the most heartrending story wins.”