Liya Palagashvili of the American Enterprise Institute looks into government efforts to address the growing gig economy.
Nontraditional work (e.g., freelancing, contracting, gig, and self-employment) is a growing sector of the labor force, with about 39 percent of US workers engaging in this type of work as either their primary or supplementary source of income.
Generally, individuals engage in this type of work to have greater flexibility or to make additional income.
Flexible arrangements are transformative for women, who have been driving the growth in the nontraditional workforce.
Policies that aim to reclassify nontraditional workers as employees are counterproductive; improving access to portable benefits is the most fruitful avenue to address this workforce’s concerns.
Across the United States, political leaders are wrestling with challenges caused by the growth in nontraditional work arrangements. These are income opportunities legally classified as independent contracting or self-employed work and are outside the standard employment arrangement. Flexibility is a staple feature of this work, and it offers income opportunities for many working Americans who either desire or require more flexible forms of work. This is especially true for women, who have been driving the growth in the nontraditional workforce.
At the same time, these work arrangements have limitations; most notably, nontraditional workers do not have access to benefits afforded to traditional employees. One obstacle in designing appropriate policies for the nontraditional workforce is that there are misunderstandings about who these workers are and want they want. The first step to designing better policies for the nontraditional worker is to invest in better data to understand this workforce and to increase public knowledge about it.
It’s also important to emphasize that nontraditional workers are a wholly diverse set of people—spanning different income brackets, industries, and roles—who work as either primary or supplementary earners. This is partially why one-size-fits-all reclassification policies tend to be problematic; those efforts ignore the workforce’s diversity. To better meet the needs of the growing nontraditional workforce, policymakers will have to think outside the box and implement sustainable solutions that may require more flexible and portable benefits that are decoupled from employment
