freelance – Looking Forward

October 14, 2020

Going Full Uber

Today, something a little different, but not too different — it’s about one of the public policy implications of an important change in the economy that technology has enabled.

As we all know, the freelance and gig economy has been growing. According to a report this year from Upwork and the Freelancers Union, more than a third of the workforce is freelancing. Many of us make at least part of our living in the gig economy and most of the rest of us depend at least part of the time on people who are gig workers.

In California, there has been a movement to apply to gig workers some of the protections that were put in place for the fast-growing number of American industrial workers 80 to 100 years ago — minimum wage, a fixed work week, unemployment insurance, assistance due to workplace accidents and the like.

In response to California’s law that requires Uber and Lyft to reclassify its contractors as employees who are provided with employee benefits, the company proposed its own reform plan for the gig economy. Dara Khosrowshahi, Uber’s CEO, wrote an op-ed in the New York Times on August 10, 2020, titled “I Am the C.E.O. of Uber. Gig Workers Deserve Better. Gig workers want both flexibility and benefits — we support laws that could make that possible.”

In it, he proposed:

“that gig economy companies be required to establish benefits funds which give workers cash that they can use for the benefits they want, like health insurance or paid time off. Independent workers in any state that passes this law could take money out for every hour of work they put in. All gig companies would be required to participate, so that workers can build up benefits even if they switch between apps.”

The New York Times columnist Shira Ovide followed up with a story titled “Uber’s Next Idea: A New Labor Law …Uber’s “third way” would offer its drivers flexibility plus some benefits. It’s not totally crazy.” Hmm, not totally crazy? That doesn’t sound like an endorsement, but it’s also not dismissive. Something has to be done to equalize the protections for them with employees, while giving them the flexibility that Uber advocates.

In line with their approach, Uber and similar companies are supporting California’s Proposition 22 on the ballot this November to get them out from under the State government’s push to treat their drivers as employees. Not surprisingly, many progressive and labor groups oppose Prop 22. This picture illustrates the concerns of the opponents:

But there is a larger question here beyond benefits and rights for gig workers because the change in the nature of employee-employer relationships has been as significant as the growth of the gig economy. With increasing automation and more coming with AI, de-unionization and frequent layoffs among other trends, frankly, a job is not what it used to be. Moreover, the situation is not likely to improve since the long-term loyalty between employer and employee that was common decades ago is generally rare now.

It’s time to realize that the economy – not just for freelancers and gig workers – has changed a lot since the Progressive and New Deal reaction to the excesses of corporations a hundred years ago. The gig rights debate seems to be too limited and too much based on last century thinking which is increasingly inappropriate for our technology-based economy.

Putting aside the limitations of Proposition 22, why not take the general proposal for gig contractors that Khosrowshahi described in his NY Times piece and expand it?

Why not go full Uber! (Something Uber itself may not like, after all.)

What does that mean? Gig workers need a better contract and so do “employees”.

Any individual — whatever the label — who is providing a service to a company would have a contract with that company which clearly states adherence to government laws and regulations on: minimum payment per hour, extra payment for more than a certain number of hours of work per week, expenses incurred performing duties on behalf of the company, safety, discrimination, normal workers compensation for accidents that occur while working on behalf of the company, and the right to form any association (union) they wish.

Khosrowshahi emphasizes the freedom and control over their lives that gig workers have. OK, maybe it is time to give employees that same freedom.

That brings up the other current disparities between gig workers and employees, especially health insurance, sick/family/vacation leave and unemployment insurance which are tied to employment status. Gig/freelance workers need this as well, but it is also time to disassociate these benefits from the companies where people work — all in the cause of the freedom that Khosrowshahi promotes.

For example, the money companies used to spend on health insurance premiums and the like would now be paid directly to the employees. The employees would get their own health insurance and not be limited to the third insurance plans their company has pre-selected. Government options could also be offered for health insurance. (Similarly, gig or freelance workers could have those premiums built in to their contracts, at a minimum being the percentage of a full work week that they devote to the company.)

In this way, there would be no windfall for corporations after they would be relieved of paying benefits to employees. The shift can be done in a revenue/cost neutral way, leaving employers, companies and governments financially where they were before the shift.

Providing protections for everyone who works for someone else, no matter whether that’s on a gig/freelance basis or “permanently”, will help everyone get some more freedom from the fear of economic dislocation. Also, they will finally have the freedom to pursue their entrepreneurial dreams as well, which could help grow the economy more than forcing them to be locked into jobs that don’t fulfill their potential.

Finally, governments will, in the process, have to adjust their understanding of the nature of work in this century, which is no longer what it was when most current laws and policies were put in place.

June 29, 2017

A Small-Town Tech Program That Enables People To Make A Living

There’s been lots of talk about our transition from an industrial manufacturing economy to a digital economy. Many people have been caught in this transition, just as many young farmers were caught in the transition to the industrial era and ended up filling the slums of rapidly growing cities more than a hundred years ago. While we see low earnings growth in cities and suburbs, this has been especially a problem in small towns and rural areas.

With all the talk about the issue, there’s been very little action considering the size of the problem – particularly impactful programs to help these folks. And those that do exist usually deal with part of the one problem, say training but not placement or the other way around. That problem is in part due to silos that have been created by our laws.

Nevertheless, there are some programs worth watching, expanding and emulating. Digital Works, a non-profit organization which currently operates in Kentucky, Michigan, Mississippi, New Mexico, Ohio and Texas is a good example.

This is not about creating more computer programming and other high-level jobs in big cities. Nor does it work on helping low-income people in areas with concentrations of traditional metropolitan city corporate employment, such as the successful Workforce Opportunity Services.

Instead, as you can tell from where they operate, Digital Works focuses on rural areas and small towns with high unemployment – the part of the economy that has been most left behind. As an example, one of their locations is Gallipolis, Ohio, about forty miles from the West Virginia border in southeastern Ohio. At its high point in 1960, almost 8,800 people lived there. The Census Bureau estimates there are fewer than 3,500 people there now.

These are also the places that require residents to travel the most to get to big (or even bigger) cities that have concentrated traditional employment in factories, offices and stores. So being able to make a living, by working digitally, in or near your home opens up all kinds of new economic opportunities.

Digital Works trains local people for contact center work that can be done anywhere there is sufficient Internet connectivity, either at home or at a work center. The goal is that the work pays better than minimum wage, with performance-based raises and promotional opportunities.

Digital Works handles the whole cycle that is necessary for the unemployed – recruitment, screening, training, placement, mentoring, development and retention. (It reminds me a bit of the transitional work programs for urban poor and ex-convicts that I helped run much earlier in my career.) They even work with their graduates to obtain the National Retail Foundation’s Customer Service Certification.

They will create remote work centers in partnership with local governments in those areas where broadband is not yet widely available. It’s worth noting that Digital Works is a subsidiary of Connected Nation, which itself is focused on increasing broadband deployment and adoption.

Digital Works is fulfilling the vision of the Internet as the foundation for expanded economic growth everywhere it can reach.

And, of course, to complete the circle, a large part of their effort is on developing relationships with companies that would pay the people to whom they are giving several weeks of training. These business relationships also ensure that the training provided is what employers are actually looking for – something that is often discussed in other training programs, but not so closely practiced as by Digital Works.

With a more global vision, one of the more interesting people to participate regularly in the Intelligent Community Forum’s activities is Stu Johnson, who directs Digital Works. He has said:

“There’s no other workforce training program that offers what we do—it’s really groundbreaking. We are able to offer employer-customized training to high-quality candidates, job-placement assistance, on-going mentorship, and even advanced training and career development. There is an excessive demand for these types of jobs, and Digital Works is connecting those employers with eager and trained job seekers.”

It is hard to find external studies of programs like this, which operate with little overhead in areas of the country that don’t much national attention. But Diane Rekowski, Executive Director of the Northeast Michigan Council of Governments has noted that

“The best part about this program is that it is free to anyone, and the success in Ohio has shown a 97% placement rate in a paid job upon completion of the training. Whether you are a recent high school graduate or enjoying your retirement years, this is an opportunity to have a flexible career and potential for earning much more than minimum wage.”

Digital Works’ data shows that the program has an 85% graduation rate and that 91% of their placements retain employment for more than a year.

While this program won’t work for everyone, everywhere and it certainly isn’t turning its graduates into millionaires, it is the kind of thing that can make a tremendous difference in real lives as this video shows – https://vimeo.com/150681091

September 8, 2015

Freelance Labor Day?

Yesterday was Labor Day and there were the usual parades of union members, although freelancers didn’t have their day in the sun – like this cartoon.

There were also a few Labor Day discussions on television, mostly featuring people who have nice traditional jobs and who don’t seem to have much understanding of what is happening to the very nature of work in a post-industrial economy.

This will be the first of two posts about how the way we make a living – what used to be called “work” – is changing and how the economy is changing more broadly.

Let’s start off with freelance work, which is estimated to involve 53 million Americans or more than a third of the workforce and looking more like the way that a majority of Americans will work in the future. As one reporter noted:

No wonder the polite question to ask these days is not “Where do you work?” but “What are you working on?”

Current Labor Department statistics don’t show numbers as large as a third of the workforce, which may partly explain the failure of the government to focus on freelancing. However, as a Harvard Business Review article last year explained:

“Why is this? Two reasons, mainly. One has to do with definitions — the BLS standard for self-employment isn’t the only valid one. The second is really about history. We may well be witnessing the rise of a new kind of independent worker … Free Agent Nation is out there, and parts of it are growing fast. It’s just not always easy to find”

Not surprisingly, conventional institutions are having a hard time dealing with this trend.

In a poignant description of her own situation, Elaine Pofeldt, a writer and exile from corporate America, reported “What I’ve Learned About Government, Big Banks And Consumerism — As a freelancer, the state made me feel like an economic outlaw”

“The moment you step outside the way people are supposed to work in the U.S. — either because that model doesn’t work for you or because you’ve lost a traditional job — you get cut off from the country’s support systems. Never mind that our culture reveres entrepreneurial heroes like Mark Zuckerberg. Depart the W-2 world, and you become a sort of economic outlaw. You don’t get access to unemployment. But you still have to pay taxes like everyone else.”

“Employment attorneys have told me government historically hasn’t wanted more people to join the 1099 economy. It is easier to siphon taxes directly from an employee’s paycheck than to get independent workers to pay the state later.”

Focusing on freelancers earning money through platforms like Uber, Joe Kennedy, senior fellow at the Information Technology & Innovation Foundation and the former chief economist at the U.S. Department of Commerce, argued a few weeks ago that “Labor laws are a mismatch with the sharing economy”. He recommends “Creating programs like these that support valuable new industries is certainly more important than trying to impose an obsolete model on a dynamic market.”

Recently, there have been some new policy proposals that start to address the issues in our new economy.

In yesterday’s New York Times, Sara Horowitz, Executive Director of the Freelancers Union, suggested a way of dealing with the episodic income of freelancers – with accounts for pretax income proportionately made by the clients. She also asked for easier legal remedies to deal with the widespread late or failure to pay by clients.

Nick Hanauer, venture capitalist, and David Rolf, labor union leader, wrote that “by far the biggest threat to middle-class workers—and to our economy as a whole—comes from the changing nature of employment itself.” They note that “Our changing economy has given rise to a nation of freelancers and contractors — and the need for a twenty-first-century social contract.”

Among other proposals, they suggest a “Shared Security Account as analogous to Social Security, but encompassing all of the employment benefits traditionally provided by a full-time salaried job. Shared Security benefits would be earned and accrued via automatic payroll deductions, regardless of the employment relationship, and, like Social Security, these benefits would be fully prorated, portable, and universal.”

As Sara Horowitz wrote: “Politicians have been talking about the gig economy using outdated language. They’re not talking about how we work today, and they’re certainly not talking about how we’re going to work tomorrow.”

Whether it’s a shared security account or other policies, it’s time that the nation’s public officials address the way that people have to earn a living in this century, not the last.

[http://njacknis.tumblr.com/post/128636714533/freelance-labor-day]