What New York’s gig workers deserve

Thursday, the state Assembly will hold a hearing to consider reclassifying gig workers so that they have access to critical employee benefits, opening up a long-overdue conversation about bringing employment laws up to date with the realities of the modern economy. There is no better case in point for why robust action is needed than the chaos of the holidays for those who make a living through non-traditional work arrangements.

For most gig economy workers, the holiday season means longer hours, increased customer demands, working during inclement weather and being away from family. Such conditions may be acceptable to those for whom seasonal jobs are just a way to make some extra money, but for too many American workers, employment with no long-term security, benefits or room for advancement, has now become their year-round reality.

California recently took a major step in the right direction by passing Assembly Bill 5, which is aimed at protecting gig economy employees at companies like Uber and Lyft and requires certain contract employees to be reclassified as regular employees eligible for benefits. New York should follow suit.

Holiday jobs seem to be a pretty good deal for those in need of additional income. The online staffing platform Wonolo estimates that seasonal employees during the holidays this year will, on average, earn $15.19 an hour, which is above the minimum wage. And if you’re a student living at home or the spouse of someone who is the primary breadwinner, that’s a decent paycheck.

But for those depending on these jobs to support themselves and their families, the reality is disheartening. Holiday workers of course don’t receive any benefits, and the holiday hiring bump is just that. Seasonal layoffs always follow the hiring spike.

The problem and the reality are that the seasonal hiring cycle is only a misleading snapshot of what’s become a year-round existence for an increasing number of workers. A 2017 joint survey by Upwork and the Freelancers Union found that more than 57 million Americans now do freelance work, and they project that by 2027 a majority of American workers will be freelancing. Younger workers are leading this trend, with already 47% of millennial workers now freelancing.

Traditionally, the practice of outsourcing certain jobs to contractors was done by small and mid-sized businesses that lacked the sustainable resources of large companies. freelancing is now dramatically increasing because more and more of the most profitable corporations in the world are using contract workers in roles that they previously filled with permanent staff. Last year, Google employed more contract workers than staff for the first time in its 20-year history.

Many companies claim that contract workers perform duties that aren’t within the scope of the companies’ core missions. Google, say, might hire communications specialists as contractors while reserving staff positions for artificial intelligence scientists. But it’s not hard to see that the overriding incentive is that these companies save enormous amounts of money by not providing competitive full-time wages and benefits.

The threat that this cost-saving rationale poses extends far beyond the nation’s gig and contract workers themselves, and it is putting the whole of the U.S. economy at grave risk. This is particularly evident when it comes to retirement security, with the reality being that already roughly half of Americans approaching retirement age have less than $25,000 in savings. As more people work without a formalized structure in place for saving through an employer, this percentage will keep rising.

As a nation, we are setting the stage for a full-blown economic catastrophe in which generations of American workers will have only Social Security to live on as they become senior citizens.

Of course, there was and still is fierce opposition to Assembly Bill 5 in California, with critics arguing that it will kill parts of the state’s thriving gig economy. But there has always been opposition by management to the fairness demands of workers, and yet during the mid-1950s when union participation was at its all-time high of 35%, America was in the midst of one of its greatest periods of balanced prosperity.

As more and more companies move to shift their workforce to a freelance basis, lawmakers in Albany need to follow California’s lead and ensure that workers’ rights and interests are protected.

The most profitable and powerful companies in the world can’t be allowed to shed their responsibilities to invest in the broader well-being of their workforces. It isn’t simply about what workers deserve; it’s also about keeping intact the mechanisms, like health care and retirement, which maintain social and economic stability.

Hindery is co-chair of the Task Force on Job Creation and a member of the Council on Foreign Relations. Formerly the CEO of AT&T Broadband and its predecessor, Tele-Communications, Inc., he is currently an investor in media properties. The opinions expressed in this commentary are his own.