October 4, 2016
Bringing Stability to the United States of Anxiety
Michelle Miller, Sarita Gupta, and Saket Soni
The gig economy isn’t new. Day laborers, domestic workers, construction workers, and many other workers — frequently low-wage people of color — have been living in it for decades. But with the rise of app-based labor platforms like Uber, TaskRabbit, and Handy, and with traditional companies laying off formerly full-time workers en masse only to rehire them as freelancers, the gig economy is provoking national anxieties like never before.
That’s why it’s time to develop a new generation of employment benefits and protections that meet the challenges of the gig economy.
Workers on app-based platforms still make up a small part of the total U.S. workforce, but they’re part of a full 40% of the American workforce that is now in non-traditional work arrangements of one kind or another, according to the U.S. Government Accountability Office. That includes agency temps, direct-hire temps, on-call workers, part-time workers, day laborers, and subcontracted workers.
What’s more, several of the technology companies that employ workers through apps have already transformed their industries. Uber and Lyft have dramatically disrupted the taxi business, while localities have struggled to regulate them. In the hotel industry, AirBnB’s current $10 billion valuation is bigger than that of global hotel chains like Hyatt. Apps like Task Rabbit have brought day labor corners online, and “crowdsourcing” platforms like Amazon’s Mechanical Turk plunge tens of thousands of workers into an entirely unregulated market for as little as a dollar an hour.
Non-traditional work, whether online or off, can bring more flexibility than traditional jobs. But it also brings instability. Gig economy workers often face low wages, a lack of health and safety protections, and unpredictable schedules. Workers in these jobs are also more likely to lack health insurance, retirement benefits, and paid time off, and are frequently ineligible for unemployment insurance as well.
Some app-based labor providers are trying to mitigate the instability of app-based work. Josephine, an app that lets home cooks sell meals to local customers, has a stock option program for cooks who use the platform, and has pledged to include a worker representative on its board of directors.
At the same time, Uber’s current experiment with self-driving cars in Pittsburgh underscores the unpredictability of today’s gig economy: an app that employs you one day may disappear the next — or may decide it no longer needs workers at all.
At the end of the day, gig economy workers deserve what all workers deserve: basic labor protections that include a livable minimum wage, overtime pay, paid time off, pay equity, health and safety protections, freedom of association, the right to bargain collectively, and protection from discrimination and retaliation, regardless of immigration status.
And at a time when workers are going from gig to gig, benefits should too. A growing number of proposals are emerging for a system of portable benefits — a suite of affordable, accessible benefits that aren’t tied to an employer or dependent on a particular type of employment relationship. Ideally, these would include health insurance, affordable child care, retirement benefits, unemployment insurance, income for the systemically unemployed, worker’s compensation, short- and long-term disability, and an income smoothing/Rainy Day Fund to handle fluctuations in income and alleviate short-term hardships.
We believe portable benefits are an idea whose time has come. Drawing on recent proposals from David Rolf and Nick Hanauer, the AFL-CIO, the Freelancers Union, and Sen. Elizabeth Warren, here are some principles we believe should shape a portable benefits system to meet the needs of today’s gig economy workers:
- Portable across employers. Benefits can be divorced from any particular employer, but should not serve to replace current employer-provided benefits systems or legally mandated benefits systems.
- Targeted universalism. Workers should have access regardless of how much they earn, what kind of work they do, or what their immigration status is. However, in recognition of the deep racial and gender-based divides of wealth and income in the U.S., the system should be designed with a special focus on reducing inequality for economically disenfranchised groups, including African Americans, immigrants, and women.
- Regulated by government with fiduciary requirements. Like other benefits systems, portable benefits should be overseen by government regulations to ensure they contribute to the public good.
- Diverse funding sources. Contributions should come from employers, workers, and government.
- Built by and for the people. The benefits system should be structured in the interest of workers, and workers themselves should be involved in the determining their form and substance.
- No/few exemptions or exceptions. In order to level the playing field, guidelines for portable benefits should apply to all sectors and employers.
- A supplement to existing systems, not a replacement. Portable benefits systems should never undermine existing safety nets for workers, including employer-funded systems such as pension funds and publicly funded public benefit systems. Lawmakers should never have to choose between funding existing safety nets and benefits systems, and the portable benefits system.
- Saket Soni, Executive Director, National Guestworker Alliance
- Sarita Gupta, Executive Director, Jobs with Justice
- Michelle Miller, Co-Founder and Co-Director, Coworker.org