Is there nowhere that the gig economy can’t go? As gig workers expand into increasingly unlikely industries—including restaurants, hospitality, beauty, healthcare, and even science—it comes as no surprise that retail wants in on the action. Would-be retail workers are gaining access to open shifts in storefronts through companies like Snag Work, which offers an on-demand platform that connects workers with open shifts for sales, stocker, cashier, customer service positions, and other roles. Although Snag Work is only in a few cities on the east coast so far, companies like it are already cropping up across the country.
Headlines from mainstream news outlets are reporting that today’s Labor Department report on Contingent and Alternative Employment Arrangements shows that the gig economy is shrinking. “The gig economy is actually smaller than it used to be,” says Marketwatch. From the Washington Post: “There’s a smaller share of workers in the gig economy today than before Uber existed.” From the Los Angeles Times: “Share of Americans working as independent contractors dips.” And most dramatically from Quartz Media: “Everything we thought we knew about the gig economy is wrong.”
Online digital marketplaces such as Uber, Handy, and PostMates are now firmly rooted in many American’s daily lives. With the seemingly overwhelming and growing presence, these companies continue to face uncertainty when classifying their workers which may result in longstanding financial, legal, and social implications. The business models of online digital marketplaces rely on their workers being classified as independent contractors, not employees, which are significantly less expensive to hire than employees and are not subject to most labor protections.
If you’ve been following the legal fight over Seattle’s 2015 proposal to permit ride-sharing drivers who work for companies such as Uber and Lyft to organize and form the country’s first gig economy unions, you might feel like you have been watching a tennis match. At first a court granted a preliminary injunction to block the ordinance from taking effect in April 2017, but a few months later the court dismissed a legal challenge and cleared the way for the ordinance to eventually take effect. But just today, before the law could become official, the 9th Circuit Court of Appeals revived a challenge filed by the U.S. Chamber of Commerce to the ordinance on antitrust grounds, sending the case back down to the lower court for further action.
As an increasing number of workers continue to join the gig economy, it is increasingly imperative for lawmakers and regulators to create a new retirement system that allows for freelancers and individuals working for multiple businesses to easily save for retirement. Although the American workforce is changing, the traditional retirement system does not yet present an option for the changing workforce. Gig workers are currently not entitled to enjoy a traditional employer-based retirement plan because such plan are only permitted to cover employees and not independent contractors.
The growth and benefits of the gig economy are well documented. By some accounts, more than 31 million individuals in the U.S. workforce derive their primary income from the gig economy, and businesses continue to provide platforms for this kind of work given the fact that it serves as easy access to a scalable source of labor, skills, and other professionals, not to mention the reduced start-up costs and the elimination of common hiring barriers. Up until now, however, you did not hear the gig economy mentioned in the same sentence as the government sector. It seemed to be confined to private sector employers only. However, it should not come as a surprise that the federal government wants to cash in on the benefits of hiring gig workers.
As we have previously discussed, one of the hottest gig economy issues to dominate political and public policy debate has been “portable” benefits – the concept that gig economy workers should have flexible, portable benefits that they can take with them from job to job. States and local governments are increasingly moving forward on their own with proposals to explore the provision of benefits to individual performing work in the gig economy. Most notable are proposals that have been set forth in the state legislatures in Washington, New York and New Jersey. The movement also got a boost in January when Uber and SEIU announced a joint call for the state of Washington to develop a portable benefits system that would cover gig economy workers.
The federal government has not meaningfully measured the contingent workforce since 2005. However, two economists, Lawrence Katz (Harvard) and Alan Krueger (Princeton), conducted a 2015 survey that is currently acknowledged as the best available measurement of the contingent workforce to date. And when Monique Morrissey, an Economist with the Economic Policy Institute, testified before the U.S. Senate Health, Education, Labor & Pensions Subcommittee early last month, she cited some data from this study.
According to a report in today’s Washington Examiner, we may be on the verge of getting some hard data that would show just exactly how big the gig economy really is. Reporter Sean Higgins says that the Bureau of Labor Statistics will publish the latest edition of its Contingent Worker Survey this spring that will offer new data on workers doing short-term, non-salaried gigs. An anonymous source in the Labor Department said the study probably will be published in April, according to Higgins.
The 9th Circuit Court of Appeals heard argument today over a proposal that would permit ride-sharing drivers who work for companies such as Uber and Lyft to organize and form unions. Given what could be at stake—the potential for the first-ever gig worker union—this has been a hard-fought legal battle to date, and today’s argument has been no different in nature.