Those looking for a clear-cut election decision must have been disappointed last week, with more divided government both in Washington and here in Minnesota.
Yet the voting on Tuesday did make clear that Americans will continue to live in a you are-on-your-own economy.
That notable result was crystal clear in a California ballot measure, called Proposition 22, that cleared the way for more gig work in that state.
A ballot measure is a perennial feature of California public life, and it’s usually hard to care about them. But this one asked voters to agree that ride-share drivers and other gig workers should be classified as independent contractors and not employees. Nearly 60% of Californians agreed, an outcome that was instantly seen as a watershed in the transition from regular jobs to gig work.
There’s much to be said for working for yourself, the freedom to work when you want, where you want and without a boss hovering over your shoulder. But you really are on your own — for clients, pay, health insurance, retirement savings, payroll taxes and so on.
The ride-share companies Uber Technologies and Lyft Inc. have been dogged by the issue of whether their drivers are employees for years already, as they have steadfastly insisted their drivers are independent.
If they are not employees, Uber and Lyft have no minimum wage to pay, no unemployment insurance to fund, no overtime to pay, no workers’ compensation insurance to buy, no vacation time to pay, little risk of workplace discrimination claims and so on.
There have been legal tussles over the issue. The California Legislature weighed in. And so, the companies decided to put the question to voters. Then they put their thumbs on the scale.
A handful of companies put up enough money to outspend the other side roughly 10-1, about $200 million to the Yes on 22 Committee by the end of October. Uber led the way with about $57 million, along with support from Lyft and delivery companies DoorDash, Postmates and Instacart.
It’s hard to fault these companies. If the rules permit corporations to buy an election and they have the money, then it’s probably a good business decision to go ahead and buy the election.
The outcome of the vote wasn’t even close.
The argument the ride-share companies made about work seems to boil down to their claim that their business model isn’t a service with employees but a provider of a technology platform. They enable a marketplace to form where people who need a car ride can find one from independent drivers willing to drive.
They have also taken steps to add at least some benefits for drivers, like a minimum earnings guarantee and money for health coverage.
These drivers come to mind when people mention gig workers, along with those who deliver restaurant food for businesses like Bite Squad or take on handyman or furniture moving jobs through TaskRabbit.
This has all been enabled the smartphones and (reasonably) secure online payment systems, but there was gig work going on back when Silicon Valley was known for its orchards. Jobs like designing advertisements or fixing leaky faucets while counting on the phone to keep ringing with more work.
And gig working has grown a lot outside of the “gig economy.” By some measures about a third of Americans before the coronavirus pandemic might have done some form of it, mostly moonlighting in addition to a more conventional paid job.
The share of workers across all industries who were working as gig workers grew about 15% since 2010 up through the start of the pandemic recession, at least according to research by the payroll and human resources services company ADP.
Some were older workers taking an interim step to full retirement but according to ADP many were millennials or even younger. These younger people think of themselves as regular workers, even though they had no promise of steady work or much, if any, employee benefits.
Why this is seen as a better way to structure our working lives remains a bit of mystery. Not having a boss may seem great, but anyone who has ever worked in service industries as a contractor knows the clients are the bosses, and sometimes they get so unreasonable they won’t even pay.
The boss back at their old job could never get away with that.
Control over your own calendar can be a fine thing, but paid time off is good, too. Signing up for employer healthcare plans can be a confusing nuisance, but have you tried shopping in the individual market? Or calculating and paying estimated taxes, including the full freight for payroll taxes?
Compared to other wealthy countries, in America life is more of a do-it-yourself adventure. Retirement finance is a great example, as the number of workers in the private sector with only a pension plan for retirement is down to a few percent, a tiny fraction of what it was back in the early 1980s.
And like a lot of other aspects of American life, the coronavirus pandemic seemed to fully reveal the downside of going it alone.
In Washington, Congress and the Trump administration recognized the vulnerability of the self-employed with no shot at unemployment benefits, putting a provision in this spring’s CARES Act for what’s known as Pandemic Unemployment Assistance.
The number of Americans in regular unemployment insurance programs peaked in May at more than 22 million. Participation has been declining ever since, although as of last report there were still almost 7.5 million people in these programs, more than triple what it was before the pandemic.
Participation in PUA was slower to build, in part because it was a new program to administrators, too. The number of Americans getting aid under PUA peaked in August at nearly 15 million. With still more than 9 million people getting benefits, the decline since the peak has been slower.
It will be interesting to see how many Americans are still drawing aid from that program come the week of Christmas this year. For all of them, it will be their last week as this program closes.