How can we protect workers in the gig economy? 

working at a MAC next to a pad with pencilFrom Marketwatch, Laura Tyson discusses the changes to the labor market with the increase in digital labor platforms and how it changes the relationship between the hiring party and the worker.  She says that there need to be new policies to provide a safety net for workers.  She writes:

New policies are needed to provide workers in contingent employment relationships access to benefits, and new institutions are needed to deliver them. There is growing support for the view that benefits should satisfy at least three conditions. They should be portable, attached to individual workers rather than to their employers. They should be universal, applying to all workers and all forms of employment. And they should be pro-rated, linking employer benefit contributions to time worked, jobs completed, or income earned.

Two recent proposals incorporating these conditions call for the creation of“individual security accounts” analogous to Social Security accounts, but encompassing portable benefits that would be available to all workers, regardless of employment status, and would accrue via pro-rated automatic payroll contributions.

A group of strange bedfellows — “gig” employers, labor organizations, venture capitalists, and bipartisan think tanks — recently issued a letter calling for a stable and flexible safety net based on these conditions. Meanwhile, in Congress, forward-looking policy makers like Sen. Mark Warner of Virginia are seeking ways to get ahead of the issues and create momentum for bipartisan solutions.

Much remains to be done before a new safety net for all workers is in place: determining which benefits and protections to include, how to pay for them, and how to deliver them to workers.

Labor groups, including unions or new types of labor organizations like Coworker.org and the Freelancers Union, could fill the gap, providing benefits as unions have done in the construction industry and guilds have done in the entertainment industry. In Silicon Valley, where thousands of contractors and freelancers are hired every week, new private companies like MBO Partners are emerging to handle the benefits of contingent workers who work for many employers.

The McKinsey Global Institute estimates that digital labor platforms could increase U.S. gross domestic product by 2.3% and full-time equivalent employment by 2.7% by 2025. But realizing these economy-wide gains while providing a secure and portable safety net for all workers will require new ways of thinking by companies and policy makers.

Read the full story at How can we protect workers in the gig economy? 

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