Gig Work Not Helping Canadians Prepare for Retirement
The gig economy continues to grow, with older workers making up an increasingly larger portion of the gig workforce. This report looks at Canadian workers aged 50-59, examining how their engagement in gig work may impact their earnings, total compensation (including benefits), pension and RRSP contributions, and their preparedness for retirement.
The report, based on tax data, defines gig workers as individuals reporting less than $30,000 per year in self-employment income. Among older workers entering gig work, men typically experience a 3% drop in their total annual earnings during their first three years, while women generally maintain their previous income levels. For both genders, entry into gig work also results in reduced employer contributions to pension plans, with no corresponding increase in individual contributions to retirement savings.
Most of the older gig workers in the study (more than 90%) also continue to have income from traditional paid employment, suggesting they see gig work as a supplement to their earnings. However, the findings suggest that older workers turning to gig work may ultimately be worse off and less prepared for retirement.
See our related report on how displaced workers choosing gig work may achieve better outcomes compared to incorporated businesses.