The Democratic Party hasn’t quite figured out how to take on the rapid rise of the “gig economy.” Hillary Clinton said last summer that companies like Uber and AirBnB created “exciting opportunities,” but also “rais[ed] hard questions about workplace protections and what a good job will look like in the future.” She was immediately attacked by Republicans, but also by David Plouffe, once a top Obama aide and now employed by Uber, who said it was an “overblown reaction.”
The gig economy has not otherwise been an enormous issue on the campaign trail, and legislators in Congress haven’t attempted to address it in any comprehensive way. But Thursday in Washington, Senator Elizabeth Warren waded into the debate with a lengthy policy speech at the annual New America conference in which she said it’s time to “rethink the basic bargain for workers who produce much of the value in this economy.”
Warren’s essential point is that for all the talk about Uber, ride-sharing apps and their brethren are only part of a larger, destructive trend toward classifying workers as part-time. “Long before anyone ever wrote an article about the ‘gig economy,’ corporations had discovered the higher profits they could wring out of an on-demand workforce made up of independent contractors,” Warren said. Indeed, 53 million Americans—one in three workers—is a freelancer.
Moreover, the recession has forced millions of Americans into lower-paying jobs. According to the National Employment Law Project, there are 1.2 million fewer jobs in mid- and higher-wage industries than there were prior to the Great Recession and 2.3 million more jobs in lower-wage sectors.
Warren sees the gig economy as more of a symptom than a cause. “The gig economy has become a stopgap for some workers who can’t make ends meet in a weak labor market,” she said. “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 percent.”
So what’s her solution? Warren outline three lines of attack for policymakers.
Improve the safety net. Warren has long supported expanding Social Security, which she didn’t mention explicitly in the speech. But she did call for electronic and automatic deduction of payroll taxes for Social Security for all workers, even temporary ones. If people don’t pay payroll taxes—and many contract workers don’t—it might disqualify them for disability insurance and lower their benefits once they hit retirement. She also called for a new system of catastrophic insurance for all workers. “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,” she said. “This type of insurance could be relatively cheap if it’s pooled across the entire workforce through regular, small, automatically-deducted contributions.” And Warren reiterated calls for mandatory paid leave for all workers.