What is in this episode and why you should care:
Natalie Foster is the Advisor to the Aspen Institute Future of Work Initiative and the Open Society Foundations. She is a Fellow at the Institute for the Future and New America California and she co-founded and launched Peers.org. Natalie also previously served as digital director for President Obama’s Organizing for America and the Democratic National Committee.
In the past it was considered normal for workers to stick with a job at one company for their entire career. Throughout the worker’s time at the company their benefits, such as healthcare, workers compensation, and paid time off was provided by the employer. The employee was taken care of until the time of retirement. Nowadays the gig economy is steadily growing, but where are these independent workers getting their “social safety net” of benefits?
One of the goals of the Aspen Institute is finding a bipartisan solution to support independent workers and to re-think capitalism. They are trying to find a “portable, prorated social safety net” for these workers so that they can have a flexible job while still ensuring they have access to the benefits of traditional employment.
One of the challenges in the freelance economy is our inability to fully comprehend the number of people who are actually working in the alternative work space. One reason for this challenge is the fact that there isn’t one agreed upon definition of this type of work. Just think about how many different titles there are out there for these types of workers. You have gig workers, freelancers, contractors, independent workers, entrepreneurs, etc..
So what do we know about the alternative work space? Upwork did a study that found that 40 million Americans do freelance work. The GAO found that 40% of workers are involved in some sort of alternative work (this includes part time work). Also, the rate of adoption of digital markets has been going up over the past three years.
Foster believes that if we had a choice, most people would probably choose the “American middle class job” that you keep your whole life and retire from. But she says that those types of jobs have gone away for the most part. What we see taking the place of these middle class jobs are large employers such as McDonald’s, Walmart and KFC who offer the lowest wages and very minimum benefits. They also do not give their employees any control over their scheduling and no flexible work options. This is one of the reasons that the alternative work space is growing. People who have traditional jobs can no longer make ends meet and they don’t have the flexibility they desire.
In our move towards an alternative work economy we have to be able to re-write some of the norms to help independent workers get the same support as traditional employment. Foster talks about the changes we made in the work economy when we moved from an agricultural society to an industrial one. Things like the 8 hour workday, paid vacation, and not working on weekends were all things that were not in place when we worked in the fields. Now we are going through another shift so we have to figure out how to create a new set of norms.
The solution is to find a way to extend the “safety net” we have in traditional workplaces and offer it to the 40% of workers in the alternative workspace. Foster says there is already a model that is being tested by the New York BlackCar Service where there is an extra 2 ½% added to all payments that goes into a fund the company has in order to provide workers compensation to all of their drivers. Perhaps the same type of model could be incorporated into platforms such as TaskRabbit or Upwork where a percentage of purchases are put into a company wide fund in order to provide health insurance, paid time off, or sick days for their workers. Uber is also taking a step forward by accepting an independent drivers guild in New York that they will start using next year.
Foster also mentioned that over the last 40 years our GDP has gone up and up but our wages have been going down and down. She believes there could be a way that everyone could share in this value that we as a country are creating. The alternative work space is growing, so it is important for us to find ways to supplement benefits that in the past have been provided by traditional employment. This move forward will take a change in policies, an acknowledgment of this change in our economy and a step forward by employers.
What you will learn in this episode:
We take a look at the social safety net and international income
Find out what the skills gap is and what is going on there
How portable retirement and benefits programs could impact the future of work
Gig economy vs. broader alternate work arrangements
How big the gig economy really is
Social policies and how the workplace is changing
The breakdown in the employee and employer relationship
Links From The Episode: