Industry News

Opinion: Why Biden’s “gig economy” policy needs a rethink

 

The last 18 months have sparked radical change across the globe. There is no business plan so robust or working habit so deeply ingrained that could resist the seismic shifts in society that have occurred throughout the pandemic.

The world is a different place now -- and so are the needs and desires of the people who live and work in it.

Amid this profound social change, policymakers find themselves stuck arguing over the rules of engagement for a world we no longer live in. President Joe Biden and the US Department of Labor withdrew a rule earlier this year from President Donald Trump’s administration that would’ve made it easier for those who work for “gig economy” companies to be classified as independent contractors.

It followed the passage of Prop 22 in California in November 2020, where companies like Uber, Lyft and DoorDash argued that labeling their drivers as employees would increase consumer prices and customer wait times while doing away with worker flexibility. The law stood to make it more difficult for gig workers to be reclassified as employees under federal law. That means they would be unable to qualify for benefits like paid sick leave, health insurance and minimum wage.

There is an urgent need to address the issue of workers’ rights in the gig economy. But it is important to recognize the importance of the gig economy to modern life -- and to understand that it represents much more than just the interests of Uber and Lyft. This is especially true in the advertising, creative and digital industries.

The scale of the gig economy

The gig economy is already bigger than you may think. Currently, around 36% of US workers are part of the gig economy. That’s almost 60 million people. And if it keeps growing at its current rate, this figure will exceed 50% of the workforce by 2027.

This is more than Uber drivers and delivery workers. In fact, programming and web and graphic design are the most popular jobs, encompassing 49% of this workforce. In advertising and creative industries, freelancers have long been a fundamental part of the ecosystem. Brands and agencies regularly need people with particular skills and experience to work on specific briefs and ideas.

These figures reflect a new generation of workers who are looking to explore new working models outside of the traditional salaried roles. Roles that offer them freedom, flexibility and fulfillment.

But currently, many gig economy workers have to embrace an element of financial risk or uncertainty in order to attain this level of self-determination.

Millions of people rely on the gig economy. Instead of the debate circling around tech companies lobbying to protect their margins, we instead need to focus our efforts and attention on creating a new working landscape which reflects the needs of the people who make it all happen.

The land of the free, home of the paid

COVID-19 has sparked an era of change. Workers around the globe have adapted to a new landscape, with new conditions -- and new opportunities.

We need our policy to do the same. It has to be focused on helping workers adapt to a new world and creating the right infrastructure which supports and allows them to grow their lives without the risk of sudden financial peril.

At Croud, we work with a network of over 2,400 self-employed experts around the world, and we see first hand how flexible working benefits people. People want a better work-life balance, to be able to work flexible hours and they don’t want their lives to revolve around a daily commute. They want to be able to be a parent and work outside of a 9-to-5. They want to be able to travel and not be tied to a singular city and time zone.

To achieve this change will require creative thinking from government and business alike. Can we explore partnership models? Can you incentivize workers with bonuses and equity? Can we provide shared workplaces for freelancers to collaborate and socialize?

An interesting method of incentivizing -- and protecting gig workers against financial uncertainty -- is to adopt flexible payment methods. For example, this could mean paying gig workers every day. This has a profound psychological impact, reinforcing good work and motivating workers to plan on performing future shifts.

What we shouldn’t do is gloss over old, bad policies with new, bad policies.

The gig economy is up for grabs. It shouldn’t become a buzzword that reflects the interests of a few. Instead, as society evolves and the long-term effects of the last 18 months take root, it will quickly become in the interest of the many.

 

Kris Tait is US Managing Director of Croud, the global digital agency connecting data, technology and creativity to drive business performance for brands such as AMC Networks, BMW, The Athletic and NewYork-Presbyterian. Kris has been with the business for nine years, being the first US employee when the agency opened its doors in New York in early 2016. Prior to this, Kris held the position of senior VP Client Strategy, a role where he was tasked with developing performance media strategies for US clients across search, social, programmatic and video.