On-Demand Workers, and How to Stifle Innovation

New technology and the reality of an economy suffering from lows like the Great Recession have combined to enable a new kind of working arrangement.  On-demand workers constitute a kind of freelance workforce that is different in kind than traditional full-time or part-time employment.  This is not your father’s nine-to-five, thirty-years-and-a-gold-watch arrangement.

The idea is that you are part of a pool of workers, and your working schedule is in flux.  You do the work when the employer’s needs and yours align.  You don’t work when you don’t want to, though you may have to do a minimal number of hours, or tasks, or a portion of your schedule may be locked in.  But aside from that you get maximum flexibility.  Perhaps this is a part-time job, one you pursue as a secondary bread-winner; or one that is secondary to other priorities in your life:  education, or child-rearing, or breaking into showbiz, or a spiritual quest, or just finding yourself.

The paying party to these transactions has to keep a larger number of workers on a constantly shifting schedule, but technology enables that.  In addition, the shifting schedule allows for ramping up as demand requires, without staffing for more idle moments.  Of course, with this kind of working environment, it is not feasible to provide the full array of traditional benefits, especially when the highly mobile and flexible worker may work only a few hours in a pay period, and the employer doesn’t know in advance what they will be.

A good thing, right?  Innovation.  A long-needed second-look at how we work.

Here’s how to kill innovation of this sort.  First, the government gets involved in the private arrangements between the person who wants to work, and the person (or company of persons) who wants those services.  We’re not talking about slavery, here, but rather the voluntary arrangements that people make for themselves.

Second, allow the government to assume the existence of a static environment, and to calcify that static environment into the law.  Assume full-time, presumed permanent-to-retirement employment for one breadwinner in a family, with a given set of non-wage benefits that correspond to this assumed model, and all of the foregoing in the cultural and technological environment of a hundred years previous.  Dictate hours, wages, and terms of non-wage compensation such as group health insurance.  Think FLSA, ERISA, COBRA, HIPAA; 1938, 1974, 1985, and 1996, respectively.

Third, allow the government to dictate additional burdens on the paying party in these private transactions, in the form of collection of taxes, enforcement of immigration laws, and exposure to government prosecutions of various kinds.  Think FUTA, Current Tax Payment Act, IRCA, Civil Rights Act, Age Discrimination Act, ADA, ; 1939, 1943, 1986, 1964, 1975, and 1990, respectively.

Fourth, allow the government to squelch innovation which is out of step with this sclerotic and maddening set of restrictions.

A new and flexible future of work has emerged, or at least seeks to emerge.  This is the culmination of thousands; nay millions, of private personal decisions regarding work.  Rational and self-interested decisions by workers and payers alike.  Flexible working arrangements are offered by Uber Technologies, Lyft, Crowdflower, Munchery, Rover, Zirtual, and a host of others.  (See “On-Demand Workers: ‘We Are Not Robots’”, Lauren Weber and Rachel Emma Silverman, Wall Street Journal, January 28, 2015).  The arrangements don’t fit the old models of full-time employment, part-time employment, or independent contractor status.  Some workers within this new paradigm (who, remember, came to it voluntarily) are now suing the paying side of these arrangements.  They’re attempting to force those arrangements into the rigid employment model, like a square peg into a round hole.

Who suffers?  All those people who might have had work through these economic innovators, who now won’t because of the drag of this uncertainty and cost.  And all of us, as our freedom is by this one more small increment gradually and inexorably ground to dust.

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