
Giving Compass' Take:
- Brookings explores how the workforce should evolve in the "gig" economy, where benefits — such as healthcare, paid leave, and retirement contributions — are unstable.
- Can better policies help extract us from contingent benefits and build a social safety net for freelancers? Some states are enacting paid leave laws that allow independent contractors to opt-in.
- Speaking of which, here's why workers should decide who counts as "family" for paid sick and family leave.
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The so-called “gig economy” continues to grow. In January, the ride-hailing company Lyft announced it had 1.4 million drivers in the United States, meaning its free agent workforce — which lacks access to common benefits such as employer-sponsored healthcare — had doubled during 2017.
And yet, Lyft drivers’ lack of access to basic benefits is hardly exclusive to Lyft and ride-sharing.
Looking more broadly, such contracting for work is up all across the economy. For nearly two decades, in fact, the growth of nonemployer firms, or firms that have no employees and mostly constitute incorporated self-employed freelancers (workers in the “gig economy”), has consistently outpaced traditional payroll growth.
Overall, nonemployer firms have grown by 2.6 percent a year, while payroll employment has grown by only 0.8 percent annually. Nor is it just independent contractors that are proliferating amid shakier benefits arrangements.
More and more workers, as it happens, are finding that their work in an increasingly “contingent” economy leaves them without the array of benefits that have historically come from traditional employment. Some of them lack a reliable income stream. Others are missing out on such standard assurances as paid leave, employer-sponsored healthcare, retirement contributions, and disability insurance. In fact, millions of wage employees in multiple large industries, such as retail or food services, face similar challenges.
Which is why more and more parties on both the right and left are saying that we need to develop new frameworks and models for providing workers with a minimum increment of support. A sounder set of benefits and safety net provisions for workers appears urgently necessary to make the very real risks and hardships of economic change in an era of digitalization seem tolerable.
Read the full article about rethinking worker benefits for the "gig" economy by Robert Maxim and Mark Muro at Brookings.