I’m 50-years-old and I don’t have anything saved for retirement. It’s hard for me to admit this publicly. I’m ashamed and more than a little bit afraid about what it means for my future.
The main reason for this, is that for much of my professional life, I’ve been classified as an independent contractor. It’s a legalistic loophole allowing companies to harness the labor of an individual, often on a full-time basis, without actually hiring them. This distinction enables companies to avoid offering workers benefits.
A recent poll by NPR/Marist found that twenty percent of Americans are currently classified as contract workers. This number includes jobs created by new technology such as rideshare drivers and delivery associates but in many cases it also includes sales people, house cleaners, construction workers, and even computer engineers. Many of them work full time, but their independent contractor status means they are treading water instead of getting ahead.
My longest stint as an independent contractor for a single company was seven years as a salesperson for a large national flooring company. I was paid 100 percent commission. Between driving to appointments, phone calls, emails, paperwork, and meetings, I averaged sixty-hour work-weeks. Yet, since I wasn’t an employee, I was denied benefits. The installers were also classified as independent contractors despite working full-time. The company justified doing this by requiring us to register as LLC’s. This way, they could say we weren’t employees, we were business owners. They found a loophole in the system and they exploited it.
There’s a reason many independent contractors have trouble saving for retirement. Even if an independent contractor earns as much money as their peers, the lack of benefits often leaves them falling behind.
For example, when I worked for the flooring company, we were required to drive our own vehicles to sales appointments without reimbursement for mileage, maintenance or gas. The wear and tear on our cars meant we constantly needed to replace our brakes, tires, and even the vehicles themselves. These expenses, although incurred on behalf of the company, had a way of coming at the worst time and depleting a person’s savings account.
Independent contractors have to pay for our own health insurance or roll the dice and pay medical expenses out of pocket. I chose to self-diagnose via Google and stocked the medicine cabinet with fish antibiotics. This was common practice amongst my coworkers.
A recent study by Prosperity Now found 40 percent of working Americans don’t have enough savings to survive even one missed paycheck. This reality is particularly brutal for independent contractors who don’t receive paid time off for sick leave or vacations. A bout with the flu can easily interfere with your ability to pay rent and vacations cost double because you have to pay for the trip and make up for the income you’ll lose while traveling.
The flooring company I worked for provided employees with a 401k with matching funds. Salespeople and installers weren’t allowed to contribute no matter how long we’d been with the company. Between the lack of paid time off, health insurance, and expenses incurred on behalf of the company, I was never able to establish my a retirement fund of my own. I’ll have to keep working as long as I can and I know I’m not alone.
A year ago I started a new career as a writer. I chose this vocation partially because I can work anywhere as long as I have my laptop. I figure, if necessary, I can eventually relocate someplace cheaper to live than Seattle. Also, the flooring samples I used to carry were heavy and writing isn’t nearly as physically demanding. This means I can work longer as my body ages. There’s nothing preventing me from working into my seventies or eighties as long as my faculties remain sharp. I expect I’ll need to.
I realize I’m lucky. Not everyone can become a writer. I worry about what will become of the other independent contractors when their bodies grow too old to perform their jobs, especially the ones who work with their hands.
These are the people who drive you to the airport, sell you products, lay your carpet, and write code for your favorite websites. What will happen to them when they’re unable to work anymore?
If we allow companies to continue exploiting loopholes, I’m afraid we’ll find out.
A version of this originally appeared in The Independent