With all of the drama in Washington these days, you can miss the substantive work that may be happening. With very little fanfare, corresponding bills in both the Senate and the House were developed by Senator Mark Warner (D – VA) and Congresswoman Suzan DelBene (D – WA) respectively and introduced at the end of last month. The Senate Bill is called the Portable Benefits Bill and seeks to develop portable benefits for independent workers.
Reading the text of the bill was heartening, since it explains the phenomenon of the gig economy. It quotes the 2016 study by economists Larry Katz and Alan Krueger which stated that 84% of all job growth in the decade ending in 2015 occurred as a result of alternative work arrangements. These alternatives are defined in the bill as independent contractors, temporary workers, self-employed individuals, contingent workers and freelancers.
To me this explanation was refreshing, since I find the discussion of work and jobs a bit of a lightning rod with politicians. Often our politicians decry the loss of manufacturing jobs, but seldom point to the real reasons for the loss, which may be technological changes or a reduction in demand for the product. Coal industry jobs could factor in the latter category. What is actually happening in the workforce, like the rise of independent work structures and the expansion of the #gigeconomy, appears to be obscured from their view.
This is, in part, because our politicians often equate work with jobs. Traditional jobs are just a subset of work which is a much larger category that includes gig work, contracting, temporary work, consulting, board roles, volunteering, part-time jobs, internships, apprenticeships, and, perhaps the most neglected of all, work in the home raising children. Work is, according to the dictionary, mental or physical effort expended to achieve a desired result. Wouldn’t it be nice if there were more support for an abundance of work models and not just traditional jobs? As such, the fact that this bill is potentially supporting a wider array of the work spectrum is overdue.
Critics have already said that the bill falls short because it doesn’t deal with the notion of worker classification. The “independent contractor or employee” issue is one that clearly needs attention. As I say in my upcoming book, Thriving in the Gig Economy, the high profile case of whether Uber drivers are employees or independent contractors may be a blessing for all workers, since it may finally lead to some clarity in what is a very ambiguous area under the law.
Warner, to his credit, appears to be a realist on this score; he knows that there is far more complexity in the worker classification issue. As it stands now, there are several models being put forward to look at alternative work arrangements differently, from the Independent Worker proposal advanced by Katz and Krueger to the Certified Self Employed notion developed by Gene Zaino at MBO Partners. In a recent article in The Ringer by Kate Knibbs (which provides a great overview of the issue, might add) Warner is quoted as saying “…let’s try which models work, and try to avoid the labor classification battle.”
The pending bill is a small first step in the idea of portable benefits, because, as Warner says it is all about seeing what works. The bill authorizes the Secretary of Labor to grant $20 million to eligible organization who seek to develop portable benefits programs for independent workers, be they digital talent platform company workers, consultants, temporary workers or freelancers. 25% of the grants would be enhancing existing programs, like those provided by The Freelancer’s Union. The other 75% would be to explore new models that go above and beyond retirement benefits.
But the answers will take a while to procure. The funding would be for the 2018 fiscal year. A report will be due in Congress on the results of this pilot program by September 2020. Let’s hope that Congress can approve this despite the current paralysis in Washington, since the independent workforce is supposed to be 29% of the US non-farm workforce by 2021. We need to get these baby steps going.