Struggling With the Gig Economy (Part 1)

Strange Bedfellows in the Gig EconomyLyft_Car_Pink_Mustache

Recently there has bee a growing discourse around policies governing how employees working in the so-called “gig economy” should be treated for purposes of wages and benefits. It’s clear that the current safety net of American laws and corporate structures has not kept up with the evolution of new employment models, but lately it seems like everyone and their uncle is jumping into the discussion.  It’s important for CUE members and HR practitioners to note the proposed system changes and and the “strange bedfellow” alliances that are emerging as partners in working on these issues.

In November, the Washington POst reported that a letter entitled Common Ground For Independent Workers had been published on social media platform Medium.  The letter called for the creation of new set of policies that would allow “gig workers” to have work flexibility while maintaining a   level of wages and benefits akin to those enjoyed by employees working in a more traditional corporate structure.  According to the Post, “…companies in the “on-demand economy” find common cause with labor unions, and left-leaning think tanks join up with free marketeers around a proposition that seems to make so much sense that nobody could talk it down.”

Principles for delivering a stable and flexible safety net for all types of work

We offer these principles as a starting point for discussing how we can transition to a new social safety net for the workforce of today — and tomorrow:

1. Supporting both stability and flexibility is good for workers, business and society. New platforms are providing workers with the flexibility and mobility that many have wished for but not found in the traditional labor market. However, self-employed workers choosing to engage in flexible work may also encounter unforeseen work disruptions or other hardships without the protections and benefits that may be provided through full time employment. We are in agreement that flexible work should not come at the expense of desired economic security.

2. We need a portable vehicle for worker protections and benefits.Traditionally, benefits and protections such as workers compensation, unemployment insurance, paid time off, retirement savings, and training/development have been, largely or partly, components of a worker’s employment relationship with an employer. The Affordable Care Act has disrupted that model, providing more independent workers a different avenue of access to health insurance. Another new model is needed to support new ways of work. We believe this model should be:

Independent: Any worker should be able to access a certain basic set of protections as an individual regardless of where they source income opportunities.

Flexible and pro-rated: People are pulling together income from a variety of sources, so any vehicle should support contributions that can be pro-rated by units of money earned, jobs done, or time worked, covering new ways of micro-working across different employers or platforms.

Portable: A person should be able to take benefits and protections with them in and out of various work scenarios.

Universal: All workers should have access to a basic set of benefits regardless of employment status.

Supportive of innovation: Businesses should be empowered to explore and pilot safety net options regardless of the worker classification they utilize.

3. The time to move the conversation forward is now. The nature of work has been in flux for decades, and new technologies are accelerating these changes; progress on how we respond must begin immediately. Diverse stakeholders should gather to discuss how to accomplish these goals, including answering important questions such as: Who should contribute financially (and how much)? What type of organization (or organizations) should administer these benefits and protections? What type of legislative or regulatory action is required to create or enable this model while allowing for experimentation and flexibility? We believe these issues are best pursued through policy development, not litigation, with an orientation toward action in the public, private and social sectors.

Those signing the letter including think tank leaders, union officials and the CEOs and Founders of a number of tech companies including Etsy and Lyft.  The full list is show below.

Byron Auguste, Senior Fellow, New America & Managing Director, Opportunity@Work

Brad Burnham, Partner, Union Square Ventures

Laphonza Butler, President, SEIU Local 2015

Shelby Clark, Co-Founder and CEO, Peers

Maureen Conway, Executive Director, Economic Opportunities Program and Vice President, Aspen Institute

Bo Cutter, Senior Fellow, Roosevelt Institute

Chad Dickerson, CEO, Etsy

Natalie Foster, Fellow, Institute for the Future

Marina Gorbis, Executive Director, Institute for the Future

Logan Green and John Zimmer, Co-Founders, Lyft

Tracey Grose, Vice President, Bay Area Council Economic Institute

Andrei Hagiu, Associate Professor of Business Administration, Harvard Business School

Nick Hanauer, Co-Founder and Partner, Second Avenue Partners

Oisin Hanrahan, CEO, Handy

Douglas Holtz-Eakin, President, American Action Forum

Sara Horowitz, Founder and Executive Director, Freelancers Union

Eli Lehrer, President, The R Street Institute

Sheila Lirio Marcelo, Founder, Chairwoman and CEO,

Apoorva Mehta, CEO, Instacart

Lenny Mendonca, Director Emeritus, McKinsey & Company

Michelle Miller, Co-Founder,

Greg Nelson, Former Special Assistant to the President and senior advisor, National Economic Council, The White House

Tim O’Reilly, Founder and CEO, O’Reilly Media

Satya Patel, General Partner, Homebrew

Ryder Pearce, Co-Founder and Chief Community Officer, SherpaShare

Libby Reder, Freelancer and former Corporate Responsibility leader, eBay

Carmen Rojas, CEO, The Workers Lab

David Rolf, President, SEIU 775 and President, The Workers Lab

Simon Rothman, Partner, Greylock Partners

Part two of this post will cover additional efforts and reports that have been issued around the gig economy including a suggestion that the Department of Labor should create a new classification of employee to cover those working this way.

Photo Source