A historic transformation has taken place in the American workforce over the past decade — the meteoric rise of the gig economy. Whether Uber or Lyft, Postmates or TaskRabbit, these platforms provide enormous value to millions of workers who seek employment flexibility and freedom. Such companies have also disrupted traditional methods of finding work and, more importantly, they have upended labor norms. This has not only created an unequal playing field when it comes to workplace benefits but is now also threatening the health of many public-facing service workers in the midst of the new coronavirus outbreak.
Gig economy companies have self-determined that their service workers (not their white-collar workers) are independent contractors. As such, they are not protected by America’s labor laws such as minimum wage, unemployment insurance, overtime laws, worker compensation, and collective bargaining. With these classification tactics, which no traditional company uses at such scale, gig companies have exempted themselves from laws that have protected our nation’s most vulnerable workers for over a hundred years.
Today, there are an estimated 10 million gig workers in the United States, up from zero a decade ago. They represent the fastest-growing segment of our workforce and disproportionately make up the bottom 10 percent of wage earners. The number of people working outside of worker protection laws is at a historic high and shows no signs of stopping. Since our cornerstone legislation to protect workers is increasingly circumvented, we must question if the United States now has any effective worker protection laws at all.
Can gig workers organize and negotiate for better terms? No. Since they are considered independent businesses and not employees, they are not covered by the National Labor Relations Act of 1935. Stunningly, if they were to collaborate, that would be considered collusion and price-fixing, recalling the use of the Sherman Antitrust Act to stop the Pullman railroad strike in 1894. The gig economy companies have set labor standards back a century. Now, we are re-debating the same issues as railroad workers in Grover Cleveland’s administration.
Since we have regressed to our past, the intersection between public health and worker conditions is worth noting. The Spanish Flu pandemic of 1918 killed millions. Today we face Covid-19. Like then, until a vaccine is developed, our main tool to combat this pandemic is social distancing. For workers serving the public, it is especially important to stay at home if you are sick. That is increasingly doable for employees because a dozen states and 30 cities representing 50 percent of the US population mandate paid sick leave. These laws have spurred 72 percent of private employers to provide sick leave, which financially enables workers to self-quarantine.
However, as you would expect by now, gig economy companies feel that these laws don’t apply to them and give no sick pay. As a result, gig workers have a strong financial incentive to work regardless of their health. While Uber and Lyft are now offering sick leave for drivers who are diagnosed with Covid-19, it misses the point. Sick pay is a preemptive measure to give workers the choice to stay home when they feel ill for any reason.
When sick, most companies help you get better. But gig workers are not offered health insurance, unlike the 85 percent of Americans who are covered by private employers or the government. Gig workers disproportionately make up the 28 million Americans who have no health benefits. It’s official: Between the lack of sick pay and health insurance, gig companies are a public health risk.
Why do gig economy companies treat their workers so poorly? Only their boards know for sure, but by circumventing labor laws, gig companies enjoy lower direct labor costs and the market disruption that their technology only partially achieves. Gutting American labor standards is an externality of little concern for gig economy investors focused on blockbuster returns.
A hundred years ago, we collectively stood up for the rights of our lowest-wage earners. Today, unfortunately, America effectively has no worker protections for our most vulnerable workers. You can hire a dishwasher for $5 an hour. You can hire a computer worker for $2 an hour from the richest man in the world.
To put an end to this injustice, we must let gig economy companies know how we feel. Consumers should be more conscious of how these services treat their workers. If companies continue to circumvent our nation’s hard-fought worker protection laws, consumers can take a stand for workers’ rights by deleting that gig app. They can also support legislation, like California’s landmark AB5, to classify gig workers as employees, so we can protect the health, income, and dignity of our most vulnerable workers.
John H. Chuang is CEO of Aquent, a Boston-based workforce services company.
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