Sen. Elizabeth Warren (D-MA) is taking on the companies that make up the “gig economy” — though they provide the jobs, and services, that are increasingly popular among the young, “progressive” Americans who are the core of Warren’s support.
In a speech last week to the left-wing New America Foundation, Warren argued that — without killing companies like Uber — labor protections needed to be extended to the independent contractors who form the core of those companies’ workforce.
It’s exciting—and very hip—to talk about Uber and Lyft and Taskrabbit, but the promise and risks of these companies isn’t new. For centuries, technological advances have helped create new wealth and have increased GDP. But it is policy – rules and regulations – that will determine whether workers have a meaningful opportunity to share in that new wealth.
At the same time that the bargain with workers has become increasingly one-sided for millions of independent contractors and hourly employees, yet another part of the basic economic bargain has also begun to fray. The safety net—unemployment insurance, workers comp, Social Security—hasn’t been updated to fill in the holes that employers have created. Temporary workers, contract workers, seasonal workers, permatemps, and part-time workers rarely have access to these benefits, which means that the workers who most need that safety net are least likely to have it.
The gig economy didn’t invent any of these problems. In fact, the gig economy has become a stopgap for some workers who can’t make ends meet in a weak labor market. The much-touted virtues of flexibility, independence, and creativity offered by gig work might be true for some workers under some conditions, but for many, the gig economy is simply the next step in a losing effort to build some economic security in a world where all the benefits are floating to the top 10%.
Warren proposed that every worker — including independent contractors in the “gig economy” — be required to pay into Social Security. She suggested that every company be required to protect independent contractors with catastrophic insurance. And she said that independent contractors should be entitled to paid leave. She added that “every worker should have the right to organize—period.”
Warren did not explain how these policies would work without raising costs for companies, or making it more difficult for would-be independent contractors to find opportunities. Nor did Warren address the role of regulations in stifling economic growth and creating downward pressure on middle class employment and wages over the past several decades.
She did, however, cite Obamacare as a success story for workers who might not otherwise have health insurance — though many young people are electing to pay the IRS an annual fine rather than purchase gold-plated policies on government websites.
Unions’ efforts to organize Uber drivers have proved unsuccessful. Last month, the company settled class action lawsuits and cleared the legal pathway for it to treat its drivers as independent contractors. Warren says that those contractors must also be protected, and that the lack of more widespread protections is part of what is pushing them to drive for Uber in the first place.
Joel B. Pollak is Senior Editor-at-Large at Breitbart News. His new e-book, Leadership Secrets of the Kings and Prophets: What the Bible’s Struggles Teach Us About Today, is on sale through Amazon Kindle Direct. Follow him on Twitter at @joelpollak.