“Do you work outside the home?” my doctor asked during a recent checkup. It’s a typical politically correct way to ask mothers if they work for pay. In fact I do, but I’m one of a growing segment of flexible work-from-homers who earn their salaries from a computer in the living room, so I wasn’t quite sure how to answer.
Being “in the office” is a relative term when work can take place in any time zone, in any location, as long as there is wifi. Indeed, the very nature of work is changing right before our very eyes. The increased flexibility of work presents great opportunities for those with in-demand skill sets and the ability to engender trust and communication with distance employers. However, the rise of the gig economy presents huge challenges too. Lower wage employees who work in the gig economy lack many of the protections of traditional employment like healthcare, workers comp, job training and the job security of yore. And as of yet, the public sector hasn’t stepped in to bridge the gap. On the 25th anniversary of its first conference, BSR tackled this thorny subject in a session entitled The 21st-Century Social Contract.
Like all the best panels, this one featured experts with quite different perspectives on this rich topic. Libby Reder, fellow at the Aspen Institute Future of Work Initiative, concerns herself with the risks facing the bulk of these in-demand workers and the policy and organizational tools workers can use to fight for better protections. Peter Leyden, Founder of Reinvent, has seen the opportunity the flexible workforce provides and earns his living helping companies and individuals take advantage. BSR CEO Aron Cramer rounded out the mix.
Workers who are available when someone needs their services, not necessarily when they need a paycheck, are called the “contingent workforce” according to Reder. This growing trend — 30 percent of the workforce according to Leyden – is “driven by the mix of shareholder maximization, short-termism, and rules enshrined at state and federal level to treat certain types of workers one way and others another.” She refers, of course, to the fact that traditional employment contracts include a range of services: even the lowest wage jobs in this category include a minimum wage, social security, unemployment insurance, leave to care for sick family members and workers compensation. Many more include vacation, sick time, regular wages, disability insurance, retirement and many more perks.
So-called Independent Contractors operate as mini-solo businesses and therefore receive none of these benefits. This set of separate classifications is the key to the rise of the gig economy. Every TaskRabbit, Lyft driver and Etsy crafter is his or her own employer, for better or worse. The absence of workplace protections is key to these companies’ impressive profit margins. Reder offers a difficult challenge, “How will we re-architect the social contract we’ve made with the middle class? That a hard days work will be enough to support a middle class family.” Indeed the social contract is “fraying at the edges.”
Leyden counters the doom and gloom of the risk to workers. “This is good,” he offers. It’s the key to corporate profitability, since companies do not need to pay for workers’ time when their services are not needed. Workers benefit too, from the increased flexibility and choice around which projects and teams to work with. “So much of the best talent in the world doesn’t want to be part of a company,” he notes, “If we get this right it could be an awesome system for a lot of people.” Indeed, the the “endorphins of entrepreneurship” as Reder calls them – are a key facet of today’s workplace that would have been hard to find in the offices and on the factory floors of the 1950s.
So how do we protect against the bad while allowing for the good?
In short, we need to decouple benefits from the workplace. That can happen through a variety of means:
Leyden sees opportunities for companies to take a leadership role. “Companies should take the high ground.” For example, they could segment pay for independent contractors and provide separate payments into retirement and training accounts. Leyden points to the Reuther’s Treaty of Detroit, a landmark trade union contract negotiated first with General Motors and then with Ford and Chrysler to give auto workers extensive health, unemployment, and pension benefits in exchange for agreeing not to strike.
Just like GM set the standard in Detroit, we’re gonna pay decent wages that go up with the cost of living. You need healthcare for the family? Need pensions? Great, we’ll throw money into pensions. You need vacation? You wanna be a real person, got a grievance, great we’ll give you unions. Workers have the same generic needs now and it’s totally doable. Have portable benefits. Aggregate. Technology makes it solvable.
Of course, this corporate leadership only came with worker pressure. Unions, in most cases, are much less common and powerful now. Reder posits that we might also explore associations, since these issues affect workers in many sectors. “What would be the AAA or NRA of independent workers look like?” Associations of independent workers could advocate for change at the state and federal level and pressure companies too.
When it comes to employers, she evokes the early days of corporate green team, “Just start. Start to measure. Go to HR and ask how has our workforce changed? How many full time, part time people do we contract with? Do we have best practices?” From measurement, of course, sustainability advocates know well, comes management.
Ultimately, much of the solution to the individual worker protection issues rests with the state and federal government. Even if they aren’t focused on solving problems for the majority of Americans, they should be. It’s our responsibility to hold them accountable.
Leyden summed things up with a prediction, “When people look back at early years of late 20th century, they’ll see climate change, massive inequality and all the disruption these have caused. Everything is breaking so fast and it’s so profound.”
All we can do is be on the right side of history, advocating for the rights workers know they deserve.
Image credit: James Mackintosh, Flickr