How Will The Gig Economy Impact Traditional Work Contracts?Lili | August 18, 2019 | 0 | Traditional
We are at the beginning of a significant shift in the labor market. A larger share of the nation’s workforce is finding work on demand from multiple employers. This new way to work gives workers flexibility and the ability to generate income when they need it. This is a real benefit for individuals. However, if not properly managed, this trend could be detrimental for workers denying them the critical benefits that have traditionally been tied to employment in the US.
Given how work is changing, a new work contract has to emerge to provide workers benefits that map to this new way to work. Historically, benefits like health care have been tied to the traditional work contract. Many companies employing what we call ‘gig’ workers are not providing them with any benefits since they do not classify under traditional employment category.
A new work contract for this population that provides fractional benefits seems most logical. If an individual spends 20% of her day or earns 20% of her income driving Lyft, then Lyft would provide 20% of her healthcare costs and other benefits. This would require a new class of laborer and a new system to allocate the costs associated with these benefits. Our current regulatory infrastructure does not provide for this today at a state or federal level. As a citizen, I hope we can innovative to create new rules and systems to get all workers the benefits they earn.
I expect this new worker contract will emerge soon. An innovative start-up could lead the way using it to attract talent when so many on-demand marketplaces are supply constrained. I imagine the government will invent a new classification in the medium term. That will create an opportunity for a new class of start-ups to emerge to provide benefits that cater to the unique needs of these workers.