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Tuesday, October 13, 2015

Worker Voice, Classification and Taxes

Last week (10/7/15), the White House and Department of Labor held the White House Summit on Worker Voice. Per the event's website, this event "provided a historic opportunity to bring together a diverse group of leaders – including workers, employers, unions, organizers and other advocates and experts -- to explore ways to ensure that middle-class Americans are sharing in the benefits of the broad-based economic growth that they are helping to create."

President Obama's remarks included this reference about the "sharing economy":

"We’ve got folks who are getting a paycheck driving for Uber or Lyft; people who are cleaning other people’s houses through Handy; offering their skills on TaskRabbit.  And so there’s flexibility and autonomy and opportunity for workers.  And millennials love working their phones much quicker than I can.  (Laughter.)  And all this is promising.  But if the combination of globalization and automation undermines the capacity of the ordinary worker and the ordinary family to be able to support themselves, if employers are able to use these factors to weaken workers’ voices and give them a take-it-or-leave-it deal in which they don't have a chance to ever save for the kind of retirement they're looking for, if we don't refashion the social compact so that workers are able to be rewarded properly for the labor that they put in... -- then we're going to have problems.

"And it’s not just going to be a problem for our politics -- creating resentment and anxiety -- it’s going be a problem for our economy because the history shows that when we do best as an economy it’s when workers have money in their pockets and they're able to buy goods and services.  And they, in turn, create new demand, and create new opportunity, and create the kinds of markets that businesses can then take advantage of.  That's just a fact.

"So we’ve got to make sure that as we continue to move forward, both in this new “on demand” economy and in the traditional economy as a whole, hard work guarantees some security.  And that's what this summit is about -– making sure that, as our economy continues to evolve, working Americans don’t get lost in the shuffle.  They can come together and they can win.

"And we can do this.  We’ve done it before.  There was a time when we shifted from an agrarian economy to an industrial economy.  And as we did, we made some adjustments to our arrangements.  We said, you know what, we’re going to offer everybody a free public education.  We put together the New Deal, put in place systems like Social Security so that people had some basic protections in their golden years.  We put together labor laws that allowed for collective bargaining, and banned child labor, and allowed people to raise their voices and have some leverage in seeking a living wage."

Well, that's a lot!  Much of his remarks also focused on unions and the need for workers to have ways to organize and not be precluded from doing so by employers. Per President Obama: "At a time of shrinking union membership, but a growing number of digital tools for organizing, how do we make sure everyone who works hard has a chance to get ahead? "

One of many things the "on demand" economy needs is more clear and consistent rules on worker classification. That wasn't mentioned in the president's remarks. He did list six things that workers need:
  1. To earn enough to support a family.
  2. To earn "decent benefits."
  3. A safe workplace and benefits should you be injured on the job.
  4. Family benefits - sick leave, parental leave, affordable child care and predictable work schedules.
  5. A way to obtain education and training to grow your skills to move ahead.
  6. Freedom to decide if you want to join with others, via a union or other means, to advocate for yourself.
What does all of that mean in the "gig" / "on demand" / freelancing economy? Here are some of my suggestions:
  1. Ease of creating your own business that will be respected as an independent business without fear that the government will reclassify you as an employee for any purpose.
  2. Simpler retirement plan rules so it is easy to set up an account and contribute to it regularly. Today, there are too many choices.
  3. Greater access to free training to help one grow their business.  The SBA and some state agencies offer such classes. Perhaps more is needed.  I think this should be a required course in high school (perhaps 6 weeks).
  4. The ability to pay into a "training / emergency" fund tax free.  A percentage of one's income (up to a specified limit) can be paid into this account. Workers can draw upon it should they experience a downturn in work or need to take time off for training or family needs). Perhaps they could apply for a partial match from a government account based on need.
What do you think?

1 comment:

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