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Elizabeth Warren takes on the ‘so-called gig economy’ in speech

TechCrunch TechCrunch 20/05/2016 Devin Coldewey

Senator Elizabeth Warren has some choice words for Uber, TaskRabbit, Alfred, and all the other companies taking part in the “so-called gig economy,” as she put it in a speech Thursday for the New America Foundation’s annual conference. She isn’t against them by any means, but urged both the companies and lawmakers to make labor-friendly changes: “No worker should fall through the cracks.”

In her speech, the Senator praised the role of technology in advancing industry and challenging our expectations. But, right on cue, the other shoe dropped.

“Companies like Lyft and Uber have often resisted the efforts of those same workers to access a greater share of the wealth generated from their work,” read a transcript of the speech. “Their business model is, in part, dependent on extremely low wages for drivers.”

“Low” is, of course, relative: Uber drivers tend to earn about $15-20 per hour, but must pay for their own gas and maintenance, among other things. It can be a good deal, but scales poorly. (That’s one reason why, until the problem is fixed through other means, you should tip them.)

And when you bring in the lack of benefits and job security, the job starts looking a lot less like “real” job. But this is hardly a new problem, Warren pointed out.

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%.

The Senator followed this with a number of suggestions for how to improve the lot of workers who find themselves working two or three 1099-type jobs, without overly dampening the positive effect and innovation these services bring. I’ve condensed them below for your convenience (free of charge).

First, expand the “safety net” full-time workers have to at least partially encompass the rest.

  • All workers should be paying into Social Security — 1099s, hourly workers, part-timers. Automatic withholding should be the rule, and employers should help with this.
  • All workers should be covered by employee-sponsored catastrophic insurance. “Everyone means everyone –even workers who haven’t built up enough credits for disability insurance, even workers who don’t have traditional worker’s compensation.”
  • All workers should receive paid leave — how much, how it’s earned or provided and so on can be worked out, but everyone should be able to work towards all-purpose days off and be given a reasonable amount of leave for family and medical issues.
  • Employee benefits, from medical to retirement, should be as portable as possible between employers and require very little managerial input from the employees themselves.

Next, streamline and enforce labor laws.

  • Works should not be deliberately misclassified or otherwise loopholed into a position where the employer has little responsibility over them.
  • Worker definitions should be simplified and clarified. Extending the safety net to all of them helps with this, as there is less to distinguish between them and everyone can focus on the labor-specific differences rather than issues of insurance or benefits.
  • “Every worker should have the right to organize—period. Full-time, part-time, temp workers, gig workers, contract workers — those who provide the labor should have the right to bargain as a group with whoever controls the terms of their work and they should be protected from retaliation or discrimination for doing so.”

Having invoked the image of the Industrial Revolution, with its unregulated and lethal factories, earlier in her speech (though sensibly; no TaskRabbit workers have been ground up in mills — yet), Warren suggested the moment is at hand for a major shift in regulation to accommodate these new industries while also protecting the people who work in them.

“Just as this country did a hundred years ago, it’s time to rethink the basic bargain between workers and companies,” she said. “As greater wealth is generated by new technology, how can we ensure that the workers who support this economy can share in that wealth?”

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