Whether you are for or against Senator Elizabeth Warren’s new bill, the “Accountable Capitalism Act,” it includes an interesting proposal. Taking a page from the European workers’ movement and developments in workforce democracy, her bill provides for companies over a given size to enact a federal charter of corporate citizenship. As Vox explains: The charter requires company directors to consider the interests of employees as well as shareholders when making decisions.
The proposed law is particularly relevant to the freeholder revolution. As part of implementing the charter, Warren demands that 40% of public company board seats must be employee elected representatives. The question: Is Warren’s proposal out of step by not including the representation of freelance, contract, and temp employees, a significant population in the “blended” workforce of most contemporary companies?
But, is co-determination – when only limited to traditional employees – still a relevant concept in the era of agile talent? Some might wonder whether Warren’s policy toolkit is out of date, ignoring a workforce that is being significantly reshaped by the “blended” workforce. And, while there are disagreements on the total size of the freelance population, there is little question that it is large and growing rapidly. Research by well-respected economists Lawrence Katz and Alan Krueger found that 94% of the net increase in all U.S. jobs between 2005 to 2015 was in gig, contract, free-lance or temporary work. And, as they note,” Workers in alternative work arrangements are spread throughout the occupational distribution.”
As one pundit explained, one of the questions on the table is whether and what role freelancers might have in co-determination:
“It will be interesting to see how the legislature, the courts and those affected by the findings of the former will deal with the crowd work phenomenon and changes in the area of employment in the future, all the more so since even ‘conventional’ employment is increasingly coming to resemble crowd work models in many industries in the wake of digitization and the general trend towards greater flexibility.”
Should Warren’s bill include representation by freelancers when the company relies on a significant level of alternative work arrangements? It is an idea worth seriously considering. Unlike employees, freelancers have few protections. NYC’s Freelance Isn’t Free Act, passed this year after years of debate, appears to be the first freelance worker protection law passed in the U.S.. Despite the fact that the law “merely” protects freelancers from threat and intimidation, and requires prompt payment for contracted work, it was fought tooth and nail by employers’ organizations. And, it doesn’t provide a role for freelancer representation in corporate governance.
The case can certainly be made that, as dependence on freelancers grow, they also need a stronger voice. For example, half of Walmart’s 1.5 million workers are part-time freelance. And, as a recent article pointed out, “Fifty-five percent of (Walmart) part-time employees said they did not have enough food to meet their basic needs. Walmart employees are among the largest groups on food stamp subsidies, according to labor experts.” Similarly, Disney plans for ~40% of park employees to be agile.
So, Senator Warren, this post encourages you and your team to carry on, but consider how the worker population is changing. Co-determination has been a powerful driver of worker protection and workplace democracy in Europe. Expanding your bill to include freelancers is an idea whose time has come. Freelancers need a voice too.