Opinion

Independent work is critical to economic recovery

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One of the most concerning trends in the economy is the growing share of the long-term unemployed (27 weeks or more) that rose 1.3 percentage-points to 9.2%, according to the July jobs report. The share of workers who have been unemployed between 15 and 26 weeks also nearly quadrupled to 39.6%. Millions who were laid off before the pandemic or who lost jobs amid the sweeping government lockdowns remain on the sidelines.

Unemployment is a vicious and cyclical beast. It is harder to find a job when you do not have a job.  During the 2008 recession millions of Americans were defined as long-term unemployed and suffered greatly for it. These individuals often found it difficult to re-enter the workforce because of long gaps in their work history — resulting in skills that atrophy over time as well as many other harmful effects.

According to the Urban Institute, “the longer a worker is unemployed, the less likely he or she is to find a new job. In addition, the stress of being out of work can influence an individual’s physical and mental health, family dynamics, and the well-being of his or her children. Involuntary job loss is a stressful event, creating a variety of problems immediately, and long periods of unemployment can compound those problems.” One proven way to keep people engaged in the workforce is through independent work, which during times of great economic uncertainty can be one of the only forms of available compensation. And, in some cases, independent work can directly lead to full-time jobs.

The good news here is that customer demand for independent services right now is high. Throughout the economy, there are currently tens of thousands of independent work opportunities across the U.S. The bad news is that some activists and policymakers continue to push an agenda that jeopardizes the flexibilities and opportunities available to individuals through independent work arrangements.

Independent work and independent relationships with multi-sided platforms that connect workers with potential customers are an underutilized and often misunderstood means of promoting and enabling flexible work opportunities for workers and enhanced and greater services for the public.  Independent workers played an essential role in preventing an even greater economic collapse and will play a critical role in moving America’s economy forward — if we let them. If you got food delivered, went to a grocery store, or bought a non-food product during this pandemic, chances are an independent worker’s services enabled that transaction.

Unfortunately, recent local, state and federal policies fail to consider and promote independent work as a lifeline for displaced workers or those simply seeking additional monies. Rather than leaning into freelance, consultant, gig, platform and other independent work arrangements that provide individuals with additional flexible economic opportunities to support their families, build their abilities, skills and businesses, lawmakers in California and other jurisdictions actively try to shut down this independent work. California’s AB 5 is a classic example of a misguided policy that has drove hundreds of thousands of individuals out of business. Further, a recent lower court decision in California upheld AB 5 and — if not reversed — will disrupt independent app-based drivers across the state.

By contrast, Proposition 22 is an effort to try to preserve and strengthen the independent contractor model, which hopefully the voters of California will recognize and support.

Antagonism to independent work is misguided given the available opportunities for those who find work in this way. In fact, a recent survey from the Coalition for Workforce Innovation (CWI) of over 600 independent contractors shows that 94% of respondents were either somewhat or very satisfied with their independent work style. Further, 89% of respondents agreed that independent style of work made them feel like they are no longer stuck in a bad economic situation — allowing for new opportunities, and flexibility to improve their work lives. A recent Wonolo survey reported that over 60% of respondents will seek work through their platform to earn additional monies during this tough economic time.

The members of CWI understand that as businesses adapt their full-time workforce to a new and difficult environment, there will be displaced workers across the country and various industries that will necessitate strong policies to alleviate the strain on American households.  However, we also know there are freelance, gig and part-time job opportunities being promoted across the economy. These platforms serve as critical lifelines to help many unemployed individuals find new ways to support themselves and their families.

Now more than ever, we need a mix of commonsense relief measures and policies that promote and maximize opportunities and flexibility for workers. Independent work is and will continue to be crucial in helping our economic recovery, but only if lawmakers allow it to be an onramp to economic opportunity and recovery.

The Coalition for Workforce Innovation

Camille Olson, partner, Seyfarth Shaw, LLP
Carl Camden, president, The Association of Independent Workers US
Evan Armstrong, vice president, workforce policy, Retail Industry Leaders Association
Michael J. Lotito, co-chair, Workplace Policy Institute, Littler Mendelson

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