I'm currently working on an assignment for a business magazine on freelancing, and how it's gone from representing a fairly fixed percentage of the American workforce to a trend. My editor wanted me to focus on tech types, and I found some of those, but people in a position to observe the overall trend, such as an IU Kelly School of Business professor, have been more inclined to focus on independent providers of simple services like ride sharing.
One prominent national writer whose focus is freelancing is Jeff Wald, who writes a column on it for
Forbes.
His most recent piece takes Hillionaire to task for her recent economic speech, in which, as has been noted here, she signaled her statist intentions to interfere in what she called the "gig economy." I was pleased to see Wald school her on this matter, but was disappointed to see him qualify it by saying hat he agrees with her positions on a number of other issues, such as health care. I guess that's par for the course for the modern techie kind of guy who sells his startups to Salesforce.
Standing as somewhat of a foil to Wald is Catherine Rampell, a
Washington Post world-of-work columnist, although this is only partially true, because she likewise shows some statist colors. Actually, we can say that Rampell is plum ate up with statism.
Back in January, she wrote
a column entitled "The Dark Side of 'Sharing Economy' Jobs." Her depiction of worst-case scenarios in gig-economy work is a bit of reach. The examples she plucks from her imagination or from anecdotal data are not exactly likely:
It’s true that, in many ways, sharing-economy jobs can offer more autonomy than traditional employer-employee relationships. But there’s a dark side to these work arrangements that gets considerably less press: the
shifting of risk off corporate balance sheets and onto the shoulders of individual Americans, who may not even realize what kinds of liabilities they’re taking on.
The risks involve everything from income instability (the worker, rather than the firm, has to absorb the brunt of demand shocks or price cuts); to irreversible capital investments (
Uber and
Lyft have infamously pushed drivers to buy new cars by promising big returns that never materialized); to unforeseen criminal liabilities (what happens if an Airbnb guest turns your home into a
brothel?); to fewer protections in the event of catastrophe (no access to programs such as
workers’ comp). Sure, sharing-economy “entrepreneurs” can get a lot of upside, but there are a lot of hidden downsides, too.
She then puts on her sociologist / historian hat and walks us through the history of the spreading of risk:
Celebration of these riskier arrangements can seem especially strange when you consider that society’s ability to better manage risk, and spread it over larger pools of people, is considered by many historians to be one of the great advances of 20th-century finance. This achievement arose partly because economists developed a much more sophisticated understanding of insurance market design. But it also stemmed from social necessity. The safety nets humans relied on for centuries — their extended families — became less reliable in the age of industrialization and urbanization. As kinship networks frayed, European governments developed robust welfare states. Here in the United States, for reasons driven partly by ideology and partly by historical accident, these new safety nets were largely administered through employers (for example, health insurance). Some historians call this “welfare capitalism.”
Then, beginning around the 1970s, this form of corporate-based risk-sharing began to unravel. Exactly why is debatable; globalization, the decline of unions, regulatory changes, new technology and financial markets all likely played a role. The result, though, is that programs such as defined-benefit pensions began to disappear. Just-in-time scheduling, outsourcing and other arms-length relationships between firms and workers blossomed. In some ways, these developments were very good for economic growth, but they also introduced much more instability into the lives of middle-class workers.
She wraps up her argument by saying that, as the "corporation-centered safety net" fades as a societal force, it's a good thing government is there to take up the slack with programs like government-controlled health care. (See what I mean about how viewing her as a foil to Wald has its limits?)
It's an endorsement of the
Juila life .
I was heartened to see several commenters under Rampell's piece express contrary views.
Here's one:
Americans are not Europeans but many liberals would like to change that fact. They want us to live our lives in the shadow of cradle to grave government control (safety nets). Fortunately, most Americans can still think for themselves and choose how they will live their lives. They evaluate their options and make a decision. If they made the wrong decision, they adjust and keep adjusting until they have the life they want. Americans are inherent risk takers. When that changes, America will become another mediocre social welfare state. Exactly what our progressive friends want.
Another makes the obvious point - well, obvious to conservatives, anyway - that we could revitalize the basic building block of society rather than look to leviathan:
One thing we could try is re-invigorating kinship 'networks.' That doesn't even seem to occur to the author. But valuing and supporting families again will revive our society, and even rebuild our ability to get along. Why would we want to go down the road to decay which Europe has chosen? Their welfare systems have been propped up by the US providing much of their defense needs, paying higher prices on certain items like drugs so they can pay artificially low prices, etc. Even so Europe is in trouble. Rebuilding the family is an important ingredient.
Another commenter points out that the traditional employment model is not all gravy:
Rampall calls the decoupling of employer safety net programs (health insurance, pensions) from employment contracts the dark side of sharing economy jobs and suggests "America probably needs a more robust government safety net." I disagree. It seems to me, that government meddling in employment contracts, health insurance deductibility for employers, and government rules on private pensions are what is driving workers to a system where "employment contracts" are more free. A system where people can make their own decisions and be more like owners of businesses and decide what health insurance they'll buy, and what they'll save for retirement. Randall wants to penalize workers by forcing them to join a government insurance pool, and pay for it, rather than allowing them the freedom to choose their preference.
As for the risk of "income instability" she apparently doesn't think employees of firms are subject to getting fired when their employer's revenue declines or goes bankrupt. And "irreversible capital investments" brings to mind the cost of a college degree in poetry on money borrowed from government (bankruptcy won't relieve the borrower of their student debt), or setting up the Obamacare exchange. I'd rather be deciding my capital investments then government forcing me to do it. Freedom yields prosperity, while government control yields less of it and what someone else decides for you.
To be sure, there were several statist commenters who came to Rampell's defense.
Here's where they're wrong: The only kind of risk we can expect government, as envisioned by Madison, Hamilton, and even Jefferson, to mitigate for us is assault on our actual rights - by providing a police force and a military. Sickness, old age and liability are just part of this deal called human life, and if someone comes up with a
profitable way to help shield us from their effects, then we can sign up for what he or she has to offer. Or, as the one commenter said, we can, within our families, look after each other.
But that's not what American government was designed for.
