Hillary Clinton expressed reservations about the so called "gig economy" wherein independent contractors find income and flexibility, in her big economic policy speech.
A skeptic joked that Mrs. Clinton is simply unhappy that the gig sector is harder to regulate. Oops! It looks like this is true. Diana Furchgtott-Roth writes:
It's no coincidence that in the space of a month, California declares Uber drivers to be employees, Hillary Clinton attacks the sharing economy, and the Labor Department issues guidelines on when to classify workers as employees, who are entitled to fringe benefits, or independent contractors, who are not.
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.
Haven't the Obama administration and the woman who would like to helm the next administration gotten the memo? We want our government to stop killing opportunities to work!
Look, we want people to have good benefits. We want job security and paid time off for every American. But first, you've got to have a job. Heavier regulation of independent contractors will mean fewer of these positions.
Currently, the actual salary of an employee accounts for only seventy percent of what it costs to hire that person. The other thirty percent goes for benefits. Reclassifying an independent contractor who is making $50,000 now typically would result in that person earning $35,000 plus fringe benefits.(The independent contractor has to take care of both her and the employer's Social Security contributions but would still end up with more cash in hand.)
Some workers might prefer to have the benefits, some might prefer to have the cash. Some might also like to have more flexibility, which will be vastly reduced if one becomes a regular employee. As for the joke about Hillary's not liking gig work because it is more difficult for the government to regulate, Diana writes:
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.
It is worth noting that it is also easier to force employees into a union.
Michael Barone reflected earlier this week that Hillary Clinton's economic policies seem stuck in 1947, but maybe Mrs. Clinton and the Obama administration don't even make it to the 1940s:
Tammy McCutchen, a principal at Littler Mendelson, told me: “The administration is locked in a 1930s-era industrial economy and simply refuses to acknowledge that the 21st-century economy works differently. The law needs to reflect the reality of how the modern economy works.”
The reality is that the sharing economy is growing, no matter how hard Hillary Clinton, the state of California and the Labor Department try to stand in the way.
The Obama administration has killed a lot of jobs through regulation in the last six years.
It is a tradition Mrs. Clinton seem determined to uphold.