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The opportunities and challenges for workers in the online gig economy

December 10, 2015

New technology platforms in the “online gig economy” present opportunities and challenges for how to effectively promote widely shared economic prosperity in a changing labor market. While forms of nontraditional and contingent work relationships such as subcontracted, temporary, part-time, and seasonal work are not new, the emergence of the online gig economy has increased policy interest in the issue of contingent work arrangements.

These one-off “gigs” differ from the ongoing relationship with a single employer. Supporting job growth and households incomes in the post-recession labor market recovery, these gigs provide flexible hours and few barriers for workers to engage in the work. At the same time, these gigs typically involve fewer employer-provided benefits and workplace protections, resulting in lower economic security for the workers involved. They also raise new questions about the legal definitions of “employee” and “employer,” leading to legal and regulatory uncertainty for both workers and employers.

To draw attention to this emerging issue, The Hamilton Project released a new framing paper on the economic opportunities and challenges of the online gig economy, and hosted a public forum featuring a proposal, “A Proposal for Modernizing Labor Laws for Twenty-First-Century Work: The ‘Independent Worker’,” by Seth Harris of Cornell University and Alan Krueger of Princeton University. Professors Harris and Krueger propose the creation of a new legal category of workers, to be called “independent workers,” to address the current legal uncertainty regarding whether workers in the online gig economy should receive employment- and tax-related benefits and protections. Their proposal would allow independent workers to gain access to collective bargaining, various forms of insurance, civil rights protections, employer-provided benefits, and tax withholding, while benefits tied to hours such as minimum wage and overtime pay would not extend to independent workers.

This framing paper and proposal were discussed by a panel of distinguished experts. For the first panel, Alan Krueger was joined by U.S. Senator Mark Warner (D-VA), Edith Ramirez, Chairwoman of the Federal Trade Commission, and Gene Sperling, President of Sperling Economic Strategies, for a roundtable to explore the impact of the gig economy on work and workers, moderated by Gregory Ip, Chief Economics Commentator, The Wall Street Journal. In the second panel, Seth Harris discussed the policy proposal with Arun Sundararajan, Professor, NYU Stern School of Business, Sara Horowitz, President, Freelancers Union, and Marcela Sapone, CEO, Hello Alfred, to be moderated by Diane Schanzenbach, Director, The Hamilton Project.

The full agenda, unedited transcript, presentation slides and more materials are available on the event page.

See highlights from the event by following @hamiltonproj on Twitter, and seeing the conversation by using #GigEconomy.