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Financial Attitudes & Behaviors Toward the Gig Economy

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Our survey reveals traditional and gig workers’ financial behaviors and attitudes toward the growing gig economy trend

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Financial Attitudes & Behaviors Toward the Gig Economy

  1. 1. T. Rowe Price Survey Financial Attitudes & Behaviors Toward the Gig Economy April 2, 2018
  2. 2. 2 Table of Contents § Survey Methodology § Profile of Survey Participants § Meet the Gig Economy Workers § Why Gig Economy Work Works § The Financial Impact of Gig Economy Work § Conclusion
  3. 3. 3 Survey Methodology § Who – Sample Size: 800 – Country: United States § Demographics – Random representative sample of U.S. Census (18+) data § When – February 6-11, 2018 § What – ‘‘Gig economy’’ is defined for this survey as a trend in the workforce where people work more independently full- or part-time, earning income through freelance, contract, and temporary employment or business ownership. – For results based on the total sample of national adults, the margin of sampling error is +/- 3.5 percentage points at the 95% confidence level. – Note: Data in graphs shown may not all add up to 100% due to cohort sizes in specific responses, multiple responses, and rounding.
  4. 4. PROFILE OF SURVEY PARTICIPANTS
  5. 5. 5 Gender 43% 57% 0% 10% 20% 30% 40% 50% 60% Male Female Base: Total Respondents (N=800)
  6. 6. 6 Age Base: Total Respondents (N=800) Millennial Generation X Baby Boomer Silent Generation 0% 12% 22% 35% 14% 12% 5% 0% 10% 20% 30% 40% 50% 60% Under 18 18-24 25-36 37-52 53-59 60-71 72 or older
  7. 7. 7 2% 7% 17% 32% 22% 2% 18% 0% 10% 20% 30% 40% 50% 60% Below high school Some high school High school graduate Some college College graduate Some postgraduate studies Postgraduate studies Education Base: Total Respondents (N=800)
  8. 8. 8 Marital Status 47% 12% 26% 11% 3% 0% 10% 20% 30% 40% 50% 60% Married Living with partner/significant other Single, never married Separated/ divorced but not remarried Widowed but not remarried Base: Total Respondents (N=800)
  9. 9. 9 Children* 40% 13% 13% 17% 12% 10% 19% 0% 10% 20% 30% 40% 50% 60% No Children Under Age 6 Age 6-11 Age 12-17 Age 18-24 Age 25-29 Age 30+ *All that apply including all ages Base: Total Respondents (N=800)
  10. 10. 10 Current Employment Status 34% 13% 8% 13% 4% 14% 14% 0% 10% 20% 30% 40% 50% 60% Employed full- time with no outside income Employed part- time with no outside income Employed full- or part-time and supplements with gig work* Works independently, earning income within gig economy* Retired but supplements income with gig work* Retired and reliant on savings, Social Security, and/or investment income Dependent with no income *Gig work includes earning income as a freelancer, contractor, temporary employee, or business owner. Base: Total Respondents (N=800)
  11. 11. 11 Individual Income Base: Total Respondents (N=800) 33% 26% 17% 9% 9% 4% 2% 0% 10% 20% 30% 40% 50% 60% Under $25,000 $25,000- $49,999 $50,000- $74,999 $75,000- $99,999 $100,000- $149,999 $150,000- $249,999 $250,000 or more
  12. 12. 12 Participates in an Employer-Sponsored Retirement Plan* *Employer-sponsored plans include 401(k) and 403(b) Base: Total Respondents (N=800) 43% 57% 0% 10% 20% 30% 40% 50% 60% Yes No
  13. 13. 13 Value of Household Retirement Plans* *Retirement plans include 401(k) and 403(b) Base: Respondents (N=726) 30% 21% 12% 11% 12% 7% 5% 3% 0% 10% 20% 30% 40% 50% 60% None $1- $24,999 $25,000- $49,999 $50,000- $99,999 $100,000- $249,999 $250,000- $499,999 $500,000- $999,999 $1,000,000 or more
  14. 14. 14 Value of Household Investable Assets Outside of Employer-Sponsored Retirement Plan(s)* *Employer-sponsored plans include 401(k) and 403(b) Base: Respondents (N=708) 26% 25% 12% 8% 11% 8% 5% 5% 0% 10% 20% 30% 40% 50% 60% None $1- $24,999 $25,000- $49,999 $50,000- $99,999 $100,000- $249,999 $250,000- $499,999 $500,000- $999,999 $1,000,000 or more
  15. 15. MEET THE GIG ECONOMY WORKERS
  16. 16. 16 About 25% of U.S. Workers Participate in Gig Economy Thinking about your current employment and/or sources of individual income, which of the following currently applies to you?? Base: Total Respondents (N=800), Millennial (N=270), Generation X (N=282), Baby Boomer (N=207), Silent Generation (N=41) 5% 11% 19% 9% 2% 6% 10% 9% 12% 9% 3% 1% 5% 29% 34% 40% 6% 15% 19% 73% 34% 4% 1% 2% 6% 14% 23% 0% 20% 40% 60% 80% 100% Silent Generation Baby Boomer Generation X Millennial GIG ECONOMY Works independently, earning income within gig economy* Employed full- or part-time and supplements with gig work* Retired but supplements income with gig work* TRADITIONAL Employed full-time with no outside income Employed part-time with no outside income NOT WORKING Retired and reliant on savings, Social Security, and/or investment income Dependent with no income By Generation
  17. 17. 17 Flexibility of Gig Economy Work Helps Narrow Employment Gap Between Genders Thinking about your current employment and/or sources of individual income, which of the following currently applies to you?? Base: Total Respondents (N=800), Female (N=456), Male (N=344) 15% 11% 8% 8% 5% 4% 40% 29% 6% 18% 19% 11% 7% 20% 0% 20% 40% 60% 80% 100% Male Female GIG ECONOMY Works independently, earning income within gig economy* Employed full- or part-time and supplements with gig work* Retired but supplements income with gig work* TRADITIONAL Employed full-time with no outside income Employed part-time with no outside income NOT WORKING Retired and reliant on savings, Social Security, and/or investment income Dependent with no income By Gender
  18. 18. 18 Boomers More Likely to Enter Gig Economy Out of Necessity Did you enter this type of independent work by choice or did you enter it out of necessity?? Base: Millennial (N=77), Generation X (N=81), Baby Boomer (N=44) 77% 67% 57% 23% 33% 43% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Millennial Generation X Baby Boomer By Choice Out of Necessity
  19. 19. 19 Attitudes to Gig Economy Are Positive, Even Among Those Who Joined Out of Necessity Do you feel that the gig economy has had a positive or negative impact on your financial situation?? Base: By choice (N=138), Out of necessity (N=66) 1% 9%14% 9% 20% 47% 56% 33% 11% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% By ChoiceOut of Necessity Very Positive Impact Somewhat Positive Impact No Impact Somewhat Negative Impact Very Negative Impact By Reason for Joining Gig Economy
  20. 20. WHY GIG ECONOMY WORK WORKS
  21. 21. 21 Respondents Familiar With Gig Economy Consider It a Positive Societal Trend Do you feel that the gig economy is a positive or negative trend in our society?? Base: Those who have heard of the term “gig economy” (N=286) 5% 13% 8% 49% 25% Very Positive Impact Somewhat Positive Impact No Impact Somewhat Negative Impact Very Negative Impact
  22. 22. 22 32% 39% 11% 23% 23% 13% 19% 12% 1% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% I stay more on top of my bills I check my accounts more regularly I speak to my financial advisor more often I am more "hands on" with my individual investment accounts I work harder to make sure I have good credit I try to create a more diversified investment portfolio I'm focused more on long- term returns I'm focused more on short- term returns Other (specify) Gig Economy Work Makes Individuals More Financially Accountable How have you become more involved with your finances as a result of doing this type of independent work?? Base: Female (N=76), Male (N=82)
  23. 23. 23 Gig Economy Offers Freedom, a Better Lifestyle, and Balance For each phrase below, please indicate whether you associate it more with the gig economy or more with traditional full-time work.? Base: Millennial (N=270), Generation X (N=282), Baby Boomer (N=207), Silent Generation (N=41) 61% 46% 40% 33% 31% 21% 20% 19% 17% 0% 25% 50% 75% 100% Freedom Better Lifestyle Balance Career Opportunity Accumulation of Wealth Financial Security Long-Term Savings Job Security Stability By Association With the Gig Economy
  24. 24. 24 Baby Boomers Express More Positive Feelings About Gig Economy How does being a part of the gig economy make you feel?? 25% 28% 16% 75% 72% 84% 0% 25% 50% 75% 100% Millennial Generation X Baby Boomer Positive Negative Base: Millennial (N=79), Generation X (N=80), Baby Boomer (N=44) Positive responses include: Free, Independent, In Control, Adventurous, Empowered, Energized Negative responses include: Anxious, Out of Control, Scared, Uncertain
  25. 25. 25 Gig Economy Drives Workers to Be More Involved in Their Finances Do you feel that doing this type of independent work has made you more or less involved with your personal finances (investments, savings, etc.)?? Base: Gig Workers (N=204) 1% 9% 11% 37% 41% Slightly more involved No Impact Slightly less involved Much less involved Much more involved
  26. 26. 26 Gig and Traditional Workers Perceive Greater Opportunity in Traditional Work For each phrase below, Please indicate whether you associate it more with the gig economy or more with traditional full-time work.? Base: Gig Workers (N=200), Traditional Workers (N=600) 31% 69% 39% 62% Associate more with gig economy Associate more with traditional work ACCUMULATION OF WEALTHCAREER OPPORTUNITY Traditional Workers Gig Workers Traditional Workers Gig Workers 29% 72% 39% 61% Associate more with gig economy Associate more with traditional work By Type of Worker
  27. 27. 27 Baby Boomers See Less Opportunity to Accumulate Wealth in Gig Economy For each phrase below, Please indicate whether you associate it more with the gig economy or more with traditional full-time work.? Base: Millennial (N=270), Generation X (N=282), Baby Boomer (N=207) 39% 61% 30% 70% 29% 71% Associate more with gig economy Associate more with traditional work ACCUMULATION OF WEALTHCAREER OPPORTUNITY Millennial Generation X Baby Boomer Millennial Generation X Baby Boomer 35% 65% 33% 67% 25% 75% Associate more with gig economy Associate more with traditional work By Generation
  28. 28. 28 Gig Workers Report Positive Impact on Financial Situation Do you feel that the gig economy has had a positive or negative impact on your financial situation?? Base: Gig Workers (N=200), Traditional Workers (N=600) 11% 13% 41% 55% 32% 21% 15% 9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Gig Workers Traditional Workers Very Positive Impact Somewhat Positive Impact No Impact Somewhat Negative Impact Very Negative Impact By Type of Worker 2% 2%
  29. 29. 29 3% 1% 2% 3% 3% 15% 9% 10% 16% 13% 7% 53% 54% 52% 44% 51% 48% 21% 24% 27% 23% 25% 30% 9% 11% 8% 14% 9% 15% Under $25,000 $25,000- $49,999 $50,000- $74,999 $75,000- $99,999 $100,000- $149,999 $150,000 or more Income Is the Driving Factor Behind Satisfaction With the Gig Economy Do you feel that the gig economy has had a positive or negative impact on your financial situation?? Base: Under $25,000 (N=266), $25,000-$49,999 (N=211), $50,000-74,999 (N=135), $75,000-$99,999 (N=73), $100,000-$149,999 (N=69), $150,000 or more (N=46) Very Positive Impact Somewhat Positive Impact No Impact Somewhat Negative Impact Very Negative Impact By Income Bracket
  30. 30. 30 Work/Life Balance Drives Gig Economy Participation as Workers Age What motivated you to choose this type of independent work?? Base: Millennial (N=58), Generation X (N=54), Baby Boomer (N=25) 2% 24% 33% 56% 19% 19% 12%43% 33% 24% 14% 13% 8% 0% 25% 50% 75% 100% Millennial Generation X Baby Boomer INCREASE SAVINGS SUPPLEMENT INCOME PROFESSIONAL DEVELOPMENT WORK/LIFE BALANCE OTHER
  31. 31. THE FINANCIAL IMPACT OF GIG ECONOMY WORK
  32. 32. 32 The Income Gap Between Traditional and Gig Workers Is Narrow Individual income.? Base: Gig Workers (N=166), Traditional Workers (N=373) Traditional Workers Gig Workers 23% 28% 20% 11% 10% 5% 2% 29% 25% 19% 9% 10% 5% 4% 0% 5% 10% 15% 20% 25% 30% 35% Under $25,000 $25,000- $49,999 $50,000- $74,999 $75,000- $99,999 $100,000- $149,999 $150,000- $249,999 $250,000 or more
  33. 33. 33 19% 30% 13% 10% 11% 8% 5% 4% 21% 22% 15% 10% 16% 7% 3% 6% 0% 5% 10% 15% 20% 25% 30% 35% None $1-$24,999 $25,000- $49,999 $50,000- $99,999 $100,000- $249,999 $250,000- $499,999 $500,000- $999,999 $1,000,000 or more Gig Workers Report Taxable Investments In Line With Traditional Workers What would you estimate to be the total value of your household's investable assets outside of a 401(k)/403(b) (e.g., stocks, bonds, mutual funds, annuities, ETFs, etc.)? ? Base: Gig Workers (N=154), Traditional Workers (N=328) Traditional Workers Gig Workers
  34. 34. 34 More Gig Workers Report Managing Their Own Investments Than Traditional Workers Do you have a dedicated financial advisor that you rely on for help with your financial decisions?? Base: Gig Workers (N=121), Traditional Workers (N=266) 50% 60% 20% 12% 30% 28% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Traditional Workers Gig Workers I don't have an advisor; I/we manage the investments myself I have an advisor(s) that I/we use for some of my accounts By Those Who Have Investments I have an advisor(s) that I/we use for all of my accounts
  35. 35. 35 Both Gig and Traditional Workers Get Satisfaction From Working Why do you plan on continuing to work?? Base: Gig Workers (N=133), Traditional Workers (N=320) 4% 3% 60% 62% 35% 35% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Traditional Workers Gig Workers I am behind on my retirement goals and will not be able to afford to stop working when I'd like to Other I get satisfaction out of working and don't want to stop By Those Who Responded They Plan on Continuing to Work
  36. 36. 36 To Make Ends Meet in Retirement, More Are Likely to Continue Working Instead of Downsize What is the contingency plan that you have in place in case you don’t have enough saved for retirement?? Base: Gig Workers (N=66), Traditional Workers (N=176) 0% 20% 40% 60% 80% 100% Traditional Workers Gig Workers Move in with my kids Move in with other family Keep working in my current job Do part-time or freelance work to make ends meet Sell my house and downsize or move somewhere less expensive RELOCATE EMPLOYMENT OTHER OTHER EMPLOYMENT RELOCATE 5% OTHER EMPLOYMENT RELOCATE 41% 31% 34% 9% 6% 8% 48% 33% 38% 6% 3%
  37. 37. 37 More Gig Workers Investing Outside of Employer-Sponsored Retirement Plans Than Traditional Workers Do you feel at a disadvantage as a result of not having a 401(k) or 403(b) available to you?? Base: Gig Workers (N=134), Traditional Workers (N=325) 11% 22% 49% 18% No Yes No, I just choose not to save at all No, I save in other accounts, and I think they are just as good Yes, I am not currently saving for retirement as a result Yes, I save in other accounts, but I don’t think they’re as good GIG WORKERS 23% 22% 31% 24% No Yes No, I just choose not to save at all No, I save in other accounts, and I think they are just as good Yes, I am not currently saving for retirement as a result Yes, I save in other accounts, but I don’t think they’re as good TRADITIONAL WORKERS
  38. 38. CONCLUSION
  39. 39. 39 Gig Work Compels Workers to Be More Involved in Personal Finances check their accounts more regularly39% 32% manage their own investments, compared with 50% of those traditionally employed report being more on top of their bills 23% are more “hands on” with their individual investment accounts 60% T. Rowe Price Investment Services, Inc. CC48BEKG6 201803-453402

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