U.S. News & World Report: U.S. News & World Report: Gig Economy Workers Deserve Better

Is your Uber driver an employee of Uber? Or is she so different from other employees that she should be exempt from things you take for granted like being paid at least the minimum wage?

This week, a paper from the Hamilton Project by economist Alan Krueger and former Deputy Secretary of Labor Seth Harris argues the latter. It’s a question that has economists, pundits, Silicon Valley and politicians abuzz. It will surely be a topic of discussion at the Department of Labor’s symposium on the Future of Work, which kicks off today.

At its core, what everyone is debating is the range of rights and benefits that a prosperous nation should provide its working people.

For many decades, our country’s employer-employee relationship has been our principal mechanism for giving workers the bare minimum of what’s needed to provide for their families today and save for tomorrow. Being an employee entitles you to some basic things like the right to the minimum wage, Social Security payments and the right to address collective interests with other workers. While far from perfect, our system built the strongest middle class in world history, and ensured that millions of workers and their families could gain economic security and opportunity through their work.

As those at the top claim more and more of our country’s wealth, the need to expand those guarantees and make them more inclusive is becoming ever more urgent. So why, at a time when economic inequality is among the greatest domestic challenges our country faces, would we compromise minimal protections all workers should receive?

The Krueger/Harris proposal would do just that. They argue that workers who drive for Uber and Lyft, run errands for TaskRabbit or do temp jobs for Wonolo are not employees of these entities. Their proposal mixes and matches the rights traditionally associated with employment, saying that workers in the on-demand economy should have protection from discrimination, but no right to a minimum wage; that their employers should have to pay Social Security taxes, but not workers’ compensation or unemployment insurance taxes. In their world, these workers would have no right to employer-provided health insurance under the Affordable Care Act and no protection against dangerous conditions at work. Businesses would pay a  5 percent payroll tax to finance health insurance subsidies, pooling these contributions and creating a private system of portable benefits.

These proposed policies are more likely to serve the bottom line of business than workers’ interests. Consider the case of minimum wage: Stories and studies have surfaced of workers making poverty-level and even sub-minimum wages in on-demand jobs. Yet, in a time when so many workers are living in deep poverty, the Krueger/Harris proposals would only worsen the issue by cutting on-demand workers out of the current minimum wage law. And their proposal and a similar one released recently by the libertarian R Street Institute would deny automatic workers’ compensation protection to drivers in one of the most dangerous jobs in America. The fatality rate for taxi drivers is more than five times the national average, higher than that for both police officers and security guards.

The simple truth is that many workers in the on-demand economy are and should be treated as “employees.” Many on-demand companies already screen, train, supervise, set wages, discipline and fire these workers – hallmarks of an employment relationship. A federal judge in California has already ruled that Uber drivers are presumptively the “employees” of the company. In that context, creating a new, diminished, set of labor standards for them is a big loss.

We should be expanding core economic rights and the publicly-administered social safety net, not diluting or erasing it. And we can do that in a simple way: As the Krueger/Harris paper proposes, we can require companies in the on-demand economy and other 1099 employers to pay Social Security taxes. But these employers should pay other payroll taxes for existing public (and portable) workers’ compensation and unemployment insurance as well, especially in light of the failure of private workers’ compensation systems to adequately protect workers.

And we should not stop there. As my organization, the National Employment Law Project, proposed in our recent agenda for the on-demand economy, we should establish additional portable benefits for all workers – not just on-demand workers. A paid leave law, like the one that exists in California, could be expanded to cover 1099 workers of all stripes. Paid sick day laws could also include these workers, no matter what label the companies choose to place on them.

Burgeoning wealth inequality threatens our democracy and reduces hope and opportunity for millions. We won’t solve this already serious problem by cutting workers out of the very guarantees that can rebuild the middle class in our country.

Read the original piece at U.S. News & World Report.

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About the Author

Rebecca Smith

Director of Work Structures, National Employment Law Project

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