The gig economy is nothing new. Nor is it inherently bad for workers. Artists and tradespeople have relied on gig work for centuries. It provides flexibility.
But the rise of internet-based platforms that profit by mediating the relationship between gig workers and their customers has fueled the expansion of the sector into many new parts of the economy. It also has created new opportunities for exploitation and abuse.
Recent studies confirm many people’s worst fears about the gig economy: A significant share of gig workers makes less than their state minimum wage, platform algorithms often result in wage theft, and gig workers are more likely to be injured on the job.
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Gig workers need federal policies that put a floor under the sector without closing opportunities for flexible work. So far, policy discussions have focused on making sure workers are correctly classified — and appropriately so.
But other tools can improve the quality of gig work. Our federally funded public workforce system, with more than 2,000 local job centers, needs updates to the law that makes gig workers eligible for services. Local workforce boards should be empowered to address their needs.
Sadly, Congress has failed to step up. Last December, the House Education and Workforce Committee approved a bipartisan bill reauthorizing the Workforce Innovation and Opportunity Act, the law that oversees our workforce development system. But the bill failed to include any mention of gig workers.
To the typical American, clicking a couple of buttons on your smartphone to snag a rideshare car to the airport seems as unremarkable as it is uncontroversial.
An initiative tested in Long Beach, California, and now Portland, Oregon, shows a potential way forward. In partnership with The Workers Lab, the local workforce board provided a platform through which individuals can access flexible work across a variety of sectors — health care, business, personal care and more. Workers have more control over their schedules and pay rates.
Additionally, the board served as its “employer of record,” a legal designation allowing gig workers to be treated as traditional employees, including receiving a W-2 form and the tax benefits that come with it. An individual can work multiple gigs for different businesses but receive one paycheck and tax form.
Local businesses that need flexible workers pay a small amount per hour to cover program costs and save money on recruitment. The desirable mix of flexibility and stability makes businesses’ nonstandard positions more competitive with workers.
This model points to the potential for extending the protections of traditional employment to gig workers without sacrificing the flexibility that many workers and companies need. Many people need flexible work — to care for family members, to go to school or supplement a career in the arts. These workers need our support.
But the Workforce Innovation and Opportunity Act provides no guidance or support to allow workforce boards and nonprofits to address the needs of these workers. Without clear guidelines, it seems unlikely that many organizations will risk losing scarce funding to implement creative new models.
The Senate needs to correct this omission and fully consider how our public workforce system can meet the needs of millions of gig workers. Some need access to high-quality gigs, and others need a path out of gig work into traditional employment. The good news is they don’t need to start from scratch.
Unchecked, flexible work could be a race to the bottom, but it doesn’t have to be. Millions of workers — and many small businesses — need flexible work arrangements that are well-paid and don’t cut them off from the safety net that supports traditional workers. Our federal workforce development system can be a place to forge new approaches that recognize the benefits of providing flexible work opportunities to the people and businesses who need them.
Adell leads New America Chicago, focusing on equity and economic mobility. McCarthy is the founder and senior director of the Center on Education and Labor at New America. They wrote this for InsideSources.com.