From the Huffington Post, Susan Lund discusses the growth of the gig economy and reports that recent research found that the biggest impact will likely come from increasing the participation in the labor force — a large part of the labor force is unemployed or inactive. The growth of on-demand service platforms also raises questions about how these jobs will be treated. Susan writes:
Around the world, policymakers will need to clarify how project-based workers are treated under the law, whether regulations like minimum wage laws apply, and what benefits the employers will need to provide. Countries such as Germany and Canada, for example, have a “dependent contractor” category that grants some additional protections to workers who fall somewhere between employees and independent contractors and are dependent on a single employer. Worker benefits are a major area of concern.
The United States, for example, long ago designed a system in which employers are primary mechanism for delivering a wide range of benefits (even if employees share the costs with them). These include health insurance, disability insurance and retirement plans, as well as unemployment insurance, maternity and paternity benefits, worker’s compensation for job-related injuries and paid time off. But freelancers must purchase their own insurance and rely on their own resources if they take time off for any reason. They also lack access to the same kinds of retirement savings plans available through many traditional employers.
If the digital revolution makes alternative working models and employment relationships more commonplace, policymakers will need to consider designing a system of more portable benefits. New online marketplaces and intermediaries may emerge to meet this need. Or unions could fill the gap, providing benefits and even training and credentialing for members, as they have done in the construction industry and for Hollywood writers and movie professionals.
With the right institutions and policies in place, it could become more viable for people to choose a freelance career path. Workers in many fields are becoming free agents in digital marketplaces, for better and for worse. Now policymakers and the private sector will need to create a framework that allows all of the participants — including the workers — to enjoy the economic upside.