The head of a company that tries to help gig workers get jobs, telemedicine services, and micro-banking products, through a mobile app, looks grim when he talks about what the COVID-19 crisis has done to his company’s customers.
Adam Roseman, co-founder and chief executive officer of Steady Platform Inc., said a survey showed that 27% of Steady program members lost all of their income in mid-March, when the lockdowns rolled in. Another 37% lost somewhere 1% to 50% of their income.
About 40% of the Steady members who lost 50% or more of their income due to the COVID-19 crisis were black.
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Roseman said the situation looks as if it’s about to get much worse: Many state, federal and local crisis aid programs, including temporary bans on evictions, are about to expire on or around July 31.
Programs have given people hit by the crisis more time to make rent or mortgage payments, before eviction or foreclosure proceedings begin, but the programs have simply delayed the due date of the payments for up to three months, not waived the obligations, Roseman said.
Roseman said what the struggling workers will owe will amount to “balloon payments” — large payments due at the end of the terms of loans.
“Think about the balloon payments that have been structured for rent payments now,” Roseman said. ”Those aren’t delayed for three years. They’re delayed for three months. And there’s a balloon coming, very soon. So, how are we going to solve for that?”
Roseman appeared on a panel that was part of the Emerge: Financial Health Forum — a five-day, online web conference aimed at financial services organizations that want to improve the financial health of people and communities.
The conference started today and will run through Friday.
MetLife Inc. and Prudential Financial Inc. appear on the sponsor list along with banks, like Wells Fargo and Goldman Sachs, and other types of financial services organizations, like PayPal.
Castlight Health, Humana Inc., Kaiser Permanente, Ladder, MetLife Inc. and Prudential Financial Inc. all have executives on the list of speakers.
A Speaker From Prudential
Jamie Kalamarides, president of Prudential’s group insurance unit, also appeared on the panel.
Kalamarides talked about worker survey data showing skills updating education and paid leave programs are growing in popularity.
Kalamarides also talked about Prudential’s efforts to set up programs that workers can use to establish emergency savings funds through payroll deduction programs, and about the growing role of associations in helping gig workers get access to the kinds of benefits programs that permanent, full-time workers often get from their employers.
Kalamarides said he believes employers have an obvious stake in maximizing the financial health of their employees.
“Workers who are financially healthy are happier, are more attentive, are more productive, are less absent,” he said. “When they’re absent, they return to work faster.
Giving workers a clear path toward financial health also helps create a growing middle class, and a growing and stable society, Kalamarides said.
— Read How the CARES Act Helps Mortgage Holders, on ThinkAdvisor.