Another national politician is worried about the on-demand economy.
Senator Mark Warner (D-VA) wrote a post on Medium today about his concerns about the issue following Hillary Clinton’s speech on economic policy Monday, at which she mentioned the growing role of freelance work in the economy.
Warner is probably the only major politician who was talking about this before Clinton’s speech this week.
Warner was a venture capitalist and made a fortune brokering mobile phone licenses before becoming a politician, so he’s a natural candidate to bridge the gap between Silicon Valley and Washington, D.C.
Warner’s response comes after two partners at the venture capitalist firm Union Square Ventures posted separate blog posts about why the tech world needs to engage with how the increasing “Uber-fication” of jobs (meaning more people doing work that falls somewhere in the grey area between full and contract employment) is changing the larger economy.
And the benefits provided by employers doesn’t stop at healthcare, which independent contractors can now get through the Affordable Care Act (though premiums are still much more expensive than most employer-provided health insurance). There’s also unemployment insurance, workers compensation, and retirement benefits.
Warner’s post both asks questions and suggests some policy responses. Here’s the meat of his policy suggestions:
First, are there other options for providing safety net benefits for workers who are not connected to a traditional, full-time employer? Which specific benefits are we talking about? Who should administer them?
We could look to the ACA healthcare exchanges as one public-private model, or perhaps borrow the idea of the “hour bank,” used by labour unions for 60 years, to administer benefits for members who work for a series of contractors.
It could be consumer-driven in part, too, providing customers with an option to designate a portion of their payments into an independently administered fund that helps support contract workers.
Second, while we all know litigation is underway across the country about whether on-demand workers are independent contractors or employees, this issue is too important to leave to the courts alone.
What Warner seems to want is some sort of public-private partnership (like the healthcare exchanges set up by the ACA).
The hour bank model, meanwhile, is a way that to measure whether workers who may work for different companies still qualify for “full-time” benefits. So workers literally “bank” hours, and as long as they total up to a certain amount for the month, then the worker continues to qualify for benefits like health insurance.
In hour bank models, usually the bank rolls over from month to month, so if someone needs 100 hours to qualify for health insurance and works 120 hours in January, but only 90 hours in February, they have still met the requirements for coverage.
Warner’s real point here seems to be that the economy needs some sort of model that makes it easier for workers to manage what employers usually do for employees.
The economy is seeing more and more companies get serious about throwing out these benefits in their business models — it’s time for policymakers to figure out what comes next.
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