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February 3 2016

The Way We Work Now

Patrice J. Lee

Uber is delivering puppies today in Washington D.C. and select other cities. The pups are leaving their abodes at animal shelters to offer 25-minute puppy-love sessions. If you fall in love with one, you can adopt him – a win for everyone involved.

Okay, this is an advertising ploy but you've got to give them credit for creativity. Another way Uber is creative is that it can offer non-traditional work options that may be helpful to people struggling in this lousy economy.

CNBC reports on how companies like Uber are changing the way we work:

“The old idea that you're employed or not employed, able to work 9 to 5, there's a whole new gray area in between," said Derek Khanna, a former staffer for the House Republican Study Committee and now an intellectual property litigator in Silicon Valley. "We need to rethink all those conclusions with a gig economy."

The basic idea is to connect those seeking employment with available jobs…

Whether it's driving an Uber or Lyft car, or renting a space on Airbnb, an estimated 53 million Americans — more than 1 in 3 workers — are freelancers, according to a 2014 report by independent research firm Edelman Berland.

"All the social science says self-sufficiency cannot be overstated, to wake up every day and do something," Khanna said. A technology policy expert, he pressed a campaign that led to a bill to legalize unlocking your cellphone.

"Even if it's not your old wage and not what you want to do in the future, it's vastly superior than not being able to do anything," Khanna said.

Hillary Clinton is a critic who has called for cracking down on the so-called gig economy:  

"Many Americans are making extra money renting out a spare room, designing a website ... even driving their own car," Clinton said last year. "This on-demand or so called gig economy is creating exciting opportunities and unleashing innovation, but it's also raising hard questions about workplace protections and what a good job will look like in the future," she said.

Hillary's war on the gig economy, however, may be mostly motivated by another factor: the difficulty in regulating these jobs. Diana Furchtgott-Roth noted several months ago that that Mrs. Clinton's attacks on the gig economy coincided with California's declaring Uber drivers to be employees and the Labor Department's issuing of guidelines on who is to be considered an employee. She wrote:

What all three have in common is this: They are trying to stem the growth of independent contractors, the largest source of job growth in the United States, according to the American Staffing Association. California, Clinton and the Labor Department want companies to hire individuals as employees rather than as independent contractors. Although those people would get benefits as employees, their cash wages would decline.

According to the latest Employment Cost Index data published by the Labor Department, benefits make up 30% of compensation costs, and wages and salaries the remaining 70%. If independent contractors were reclassified as employees, their cash wages would decline and they would receive benefits such as health insurance, vacation, pension contributions and sick leave.

Someone who is earning $50,000 as an independent contractor might get paid about $35,000, plus fringe benefits, as an employee. Of course, as an independent contractor, he would owe the employer’s share of Social Security and Medicare, $3,750, as well as the employee’s share, the same amount. But he would have more cash in hand.

Ah, but, as Furchtgott-Roth also pointed out, redefining contractors as employees gives the government more control:

The Obama administration wants to require employers to hire workers as employees because they prefer to have workers in an employer-employee relationship rather than in a contractor relationship. Forcing people into an employer-employee relationship gives the government more control over the workforce and more work to do, enforcing its regulations that apply to employees.

Critics of the sharing or on-demand economy often go to great pains to point out that these workers miss out on benefits and that the companies with which they contract evade workplace regulations. Often these criticisms are veiled attacks against new companies that are disrupting traditional industries and challenging the monopolies. But these contracting positions offer real people real opportunities.

Single mothers with children may find that staying at home and relying on public assistance is more economical than working a low-wage job because of the costs of childcare and transportation. What if by pairing her with more flexible work arrangements that can still be lucrative, she is gradually able to gain independence?

Older workers who lost their jobs during the recession and have struggled to replace that income can now find new income sources leading into and even during retirement as ridesharing drivers or conduct tasks. That could be the promise of the sharing economy.

Millennials are using technology and on social media constantly, and compared to other generations, work reaches beyond the hours of 9:00 to 5:00, which is why we are attracted to the flexibility of the on-demand economy.

Poverty in America is as bad today as it was more than 50 years ago when we launched some of the biggest publically-funded programs to address it. Maybe companies that offer work to contractors is a better way to fight poverty than failed government programs.

The welfare-to-work revolution decades ago was much-needed. Our generation is ready for the next innovation in the fight for self-sufficiency in this nation. All options must be on the table.

 

 

 

IIndependent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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