C. Jarrett Dieterle: The left should listen to what gig workers actually want

To the typical American, clicking a couple of buttons on your smartphone to snag a rideshare car to the airport seems as unremarkable as it is uncontroversial.

But in the name of protecting workers, progressive politicians have waged war on ridesharing and the so-called “gig economy." The problem with the left’s anti-gig campaign is that it is directly antithetical to what gig workers actually want, and it overlooks better solutions for helping workers.

According to many on the political left, America is awash with “bad jobs” (by which they mean part-time gig work) and needs to create more “good jobs” (which they define as full-time jobs with a full suite of comprehensive benefits).

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California led the way in 2018 by enacting legislation that instituted a stringent legal test for nearly all workers operating as independent contractors. This included those far beyond the gig economy. By making it harder to classify workers as independent contractors, the theory was that companies would convert more to full-scale employee roles.

Instead, thousands of freelancers and contractors in various industries lost their jobs, alongside a statewide decline in full-time and part-time work. Golden State voters eventually rebelled, approving a 2020 referendum exempting rideshare drivers from the new law. Despite this spectacular backfire, Democrats decided to double down on their bad bet and take their worker reclassification ideas national.

This ultimately manifested in the Department of Labor deciding this year to reverse a Trump-era rule and issue new standards for classifying independent contractors. While not identical to California’s notorious law, Labor’s rule is still designed to make it more difficult for workers to remain contractors. On cue, Repub licans have introduced a Congressional Review Act resolution to overturn Labor’s rule, which comes on top of legal challenges launched against the agency.

In defense of the rule, acting Labor Secretary Julie Su invoked a version of the "good job vs. bad job" narrative. She argued that a “century of labor protections for working people is premised on the employer-employee relationship,” and that these employment-based protections help insulate workers from “exploitation.” 

This incorrectly suggests that millions of Americans are being classified as independent contractors against their will, and that large gig corporations are purposely classifying them that way to deny them protections and benefits. 

The American economy is not precariously Scotch-taped together by workers who are involuntarily trapped in exploitative part-time gig roles. If anything, involuntary part-time work has been declining.

And far from disliking gig work and being forced into it, independent contractors and gig-economy workers overwhelmingly prefer their status as contractors. Over 80% report they chose gig work by choice, and fewer than one in 10 independent contractors want a more traditional job. This is mainly because the top job consideration for working Americans â€" above even salary and benefits â€" is flexibility.

Labor protections do not need to be “premised on the employer-employee relationship,” as Su claims. A far better solution would be to safeguard the legal status of independent contractor from these types of reclassification efforts while tying that protection to a portable benefit system for independent workers. 

A portable benefits model could operate using a system of pre-tax contributions from both employer and employee. This could provide funds for gig and contract workers to purchase benefits such as health insurance via worker-controlled benefit exchanges. 

Not only would such an alternative sidestep a nationwide version of the draconian economic fallout that California experienced, but it would also have a chance of appealing to lawmakers on both sides of the political aisle â€" not just the left. Most important, it would respect what gig workers and contractors actually want and need. 

Dieterle is a resident senior fellow at the R Street Institute, a free-market think tank. He wrote this for InsideSources.com. 

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