Today, the WAPO (Washington Post) hosted a webinar featuring Senator John Warner (D-V) and the founder of Lyft John Zimmer about the changing workforce from the Gig Economy. Zimmer hailed the recently passed California proposition no. 22 that made ride share drivers independent contractors vs. employees. Senator Warner has proposed a “portability” of benefits bill and written a white paper on the need for transferable benefits that stay with a worker from job-to-job.
The problem being addressed are the lack of health and other benefits for Gig workers who parent companies consider independent contractors. In the Gig Economy temporary, flexible jobs are commonplace and companies tend toward hiring independent contractors and freelancers instead of full-time employees. As COVID-19 accelerates elimination of jobs, some workers become Gig independents, and at the same time the trend towards automation remains unabated. Not only are blue collar workers but now white collar are being replacement by “machine learned” as Big Data enables algorithms to find repeatable labor-related tasks and replace humans with A. I. or artificial intelligence.
Needless to say, we are undergoing a profound change in workforce, and some form of a new social contract is needed. Senator Warner’s idea is one whose time has come. Americans need a base group of benefits that are theirs alone and not attached to an employer as they go forward in the new Gig and Entrepreneurial environment. While the editor believes the Andrew Yang UBI, Universal Basic Income, cannot be popular enough with Americans to become law, a compromise of health, unemployment and retraining skills is essential. Warner along with Senator Daines introduced legislation in July 2020 to establish an emergency portable benefits fund of $500 million to assist states establishing portable benefits programs for independent workers.
“Right now, millions of independent, freelance, domestic, and entrepreneurial workers have no social safety net to fall back on. I’ve been sounding the alarm on this for years, and as this pandemic has shown, this is a problem that can wreak havoc on both individual families and on our economy as a whole,” said Sen. Warner. “We will be right where we were before this crisis if we don’t find some innovative solutions.” And, Sen. Daines said, “allowing states to experiment with portable benefit models and providing funding to modernize Unemployment Insurance technology systems are just plain commonsense ideas”.
The Center for American Entrepreneurship applauds the introduction of the Emergency Portable Benefits for Independent Workers Act. The fact that critical benefits such as paid leave, worker retraining, child care, and retirement security are typically provided by corporate employers has emerged as a significant public policy challenge, as 1 in 10 Americans in the labor force are consistently in alternative work arrangements. In addition, the prospect of losing such employer-provided benefits is a major structural obstacle to entrepreneurship at a time when rates of new business formation have been in decline for years. By providing a framework for entrepreneurs to access benefits independent from employers, the Act will accelerate policy innovation within states with regard to the provision of critical benefits and enhance worker mobility.