by James A. Bacon
Senator Mark Warner, D-Virginia, has latched onto a fascinating issue: the “disaggregation of the workplace.” That’s wonk talk for the Uber-ization of the United States economy, in which an increasing percentage of the population engages in contingency work outside the highly regulated setting of full-time employment. Warner rightly calls this trend “the most radical transformation of the American workplace in the past 30 years,” and he thinks that people in Washington need to start talking about it.
Warner’s right about one thing: The rise of the contingency workforce is indeed rewriting the social contract between employer and employee. But I’m not so sure it’s a good idea for the politicians to get involved. I’d like to see evidence that contingency employment is broken before Congress tries to fix it.
In the gig economy, also called the sharing economy, workers engage in a contractual relationship with customers to provide services — the conveyance of passengers in Uber cars, or completion of a writing contract, or fulfillment of an IT task. The advantage is an unprecedented degree of flexibility. Workers are free to take on as much work as they can find, or as little as they want. They are more geographically mobile, not tied to one particular location. They can set their own hours. They can pick and choose whom they want to work with, and if they don’t like a relationship, they are free to leave it.
The downside is that there are no government-mandated employment benefits or protections. Free-lancers don’t get company-provided pensions or health-care benefits. They don’t get unemployment benefits, worker’s compensation or disability. “If there is no safety net,” says Warner in the USA Today interview seen here, “someone can hit a rough patch and have no alternative but to fall back on government assistance programs.”
Warner does not necessarily advocate extending the old workforce model to the contingency workforce. He wants to start thinking about how to improve the new model. Washington, he says, needs to look at things like hour banks (a currency exchange in which the unit of exchange is a person-hour of time) or opt-ins (I’m not sure what he’s referring to) or models emerging in Europe.
Contigency workers already have the option to purchase health and disability insurance on the open market, and they have the option to put money into IRAs. It’s not always easy finding the money to divert to those self-insurance programs, however, so not everyone chooses to take advantage of them. Paternalists no doubt fret that current arrangements that leave “too much” discretion to workers and that bad decisions might result in people relying upon the federal safety net.
As a contingency worker myself, living off Bacon’s Rebellion sponsorships and free-lance work, I value the freedom I have to work at home, meet with a driveway paving contractor (as I did today), pick up my kid from school (as I will do later), zip over to the neighborhood pool to swim a few laps (which I’ll do if I have enough time), and prepare dinner for when my wife gets home from her 8-to-7 job. If that freedom means working nights and weekends to get the job done, that’s my decision. I like this way of life.
I’m all in favor of expanding peoples’ choices, something that the private sector is particularly adept at doing. I would bitterly oppose legislation in which Congressmen or bureaucrats decide that they know what’s best for me and tell me how I need to allocate my income. Unfortunately, I’ve never known Congress to look at a “problem” and fail to find a “solution.” Right now, I’m not convinced there’s a problem that needs fixing, and, despite Warner’s perspicacity in spotting a new trend, I’m not sure I want Congress monkeying around with it.
