Thankful for Gig Workers
Mention gig workers today and Uber or DoorDash drivers immediately come to mind. How did we manage to get through the lock downs of the pandemic without them?
Among the workers in gig economy are also included independent contractors, freelancers, and artisans. According to a study by the ADP Research Institute, the share of gig workers swelled 15 percent since 2010 with approximately 6 million more gig workers than a decade ago. That’s just 1099-MISC contractors and short-term W-2 employees.
Estimates vary widely regarding the size of the total gig economy, because what constitutes the “gig economy” isn’t well-defined. Beyond independent contractors, on-call, and temp workers, the rise of online and app-based services such as Uber and Lyft have contributed to gig work’s popularity.
Gig workers, however, trade their flexibility for the security of a safety net—unemployment insurance, health benefits, paid leave—benefits that regular, full-time employees enjoy. This became evident in 2020 when Pandemic Unemployment Assistance was provided to workers in nontraditional working arrangements—those outside the traditional employer-employee model.
California attempted to address the lack of a safety net with Assembly Bill 5, passed in 2019, which tightened the rules for classifying workers as independent contractors. It was amended by Proposition 22, which exempted app-based service firms such as Uber and Lyft.
Isn’t there a better way to show gratitude to these important contributors to our economy? Virginia senator Mark R. Warner certainly thinks so.
He argues that we are in a digital economy in the 21st century, and it is time to shift our thinking away from the employer-employee relationship to the worker-payor relationship. We must also start thinking about a new social contract, one that will meet the needs and provide a safety net for freelancers, contractors, and others working in this new economy.
Two of his proposals include:
Expanding unemployment insurance to gig workers as was done during the pandemic.
Providing for portability of benefits, including portable retirement investment accounts.
These ideas are not radical. There is precedent for portable benefits such as the Screen Actors Guild in the movie industry or unions in the construction and trades industries, which provide benefits to their members. Those benefits accrue as the workers move from position to position.
Individuals perform work and deliver products and services in many different ways. It’s time that workers be met where their needs are. The gig and digital economy is just one of the topics we address in the chapter “Emerging Trends and Challenges,” a totally revised chapter in The Big Book of HR, 10th Anniversary Edition. Pre-order your copy today at https://tinyurl.com/ejjbkp69 so you are sure to receive it by its official publication date of January 1, 2022 or sooner. We’d be so grateful if you did.