When you think Gig Economy, probably your mind strays to Uber and Lyft, the big guys in the industry. Perhaps, if you are more aware, DoorDash and GrubHub come to mind. However, most people will not think of the many other ways workers are exploited by businesses, both large and small.
This part of the economy has been growing over the last generation. What it does is that it allows people to work for many industries as independent contractors. Meaning, they are not employees, and the companies can save a lot in things like unemployment insurance and even benefits. The worker is responsible for both.
This significantly lowers the cost for employers. Why they like it a lot. It also outsources costs to the state, in the form of food stamps and other benefits. Granted, Walmart has the same effect though minimum wage with little benefits. Walmart loves it, and we get to pay for it. But so do the big boys of the gig economy such as Lyft and Uber, as well as DoorDash and Ubereats.
However, this will also affect the relationship between freelance writers and employers, as well as graphic designers, and many others. This new legislation is meant to protect their rights and their economic position. It intends to make these relationships less transitional and to transfer some power to workers away from management. It seeks to formalize a business relationship. And if this expands beyond California to other states, this could change the American economy in significant ways.
Many companies hire these people for occasional work, which needs to be pointed out, is not affected. However, some companies use this as their exclusive employment model.
Let’s make this clear. If you write the occasional editorial for your local paper, whether they pay or not, you will not be affected. If you seek to submit stories to the same organization every week you will. If you work for Uber as a driver, this will allow you to be reclassified as an employee. It will also allow workers to organize into a Union. This is going to disrupt the whole gig economy because it will give power to employees, who until now have worked at the whim of these employers.
This is expected to expand to other states, which means these companies will fight it. However, this does not go far enough.
You read right. It does not go far enough. We have a new social class, not unlike early industrial labor. This is the Precariat. These are people who hold college degrees, however, work at Starbucks. These are people working as home aides, who will partially be covered by this legislation. It is the part-time journalist, and the low paid the worker at Walmart, who has to work at least another job to make ends meet.
These people are on the edge of survival, and one major car bill in the month means a financial disaster. One reason for this bill is that workers are starting to organize as industrial workers did in the 1880s. Finally, they are starting to get recognized.
There is a problem though. As our economy continues down the road of automatización, those same Uber and Lyft workers will face another issue, for example. The rise of the self-driving war will displace millions who will not find other employment that easily. It is not just Uber and Lyft. Multiple fields across both blue-collar and white collar are facing the same exact threat. And companies will do it to cut their labor costs.
This means that we need to start thinking in a serious manner about Universal Basic Income (and mind you, a form of it has existed in Alaska for some time already.)
This has to be universal, regardless of income and non-taxable. It will also stimulate the economy since people will be able to buy the things they need. In time, it will become essential since many fields are going to be automated. It will give people some economic freedom. This is a step that will be forced upon us with the changing economy, but also with a warming world.
Phillipe Van Parijs and Yannick Vanderborght calculated a number in Basic Income: A Radical Proposal for a Free Society and a Sensible Economy. It would be about twenty-five percent of GDP. That be $1163 US Dollars in the US. There is a significant catch. While universal, this payment replaces many other payments, such as any welfare.
It is independent of a single-payer medical system as well, which also has to be universal. It would cover only US Citizens and Residents. And it would allow people to have that extra flow that would cover those $500 dollar emergencies that would mean a family crisis. Minors could receive less unless they have obtained their independence from their parents. It would be an investment in the society at large, and this is a sensible response to millions of Jobs that are going to disappear, and will not come back in another form.
AB5 should be understood as the beginning of a restructuring of the economy towards the rights of workers. In other words, we should expect to see a rebalancing of the economy, and perhaps a move away from our current form of capitalism that has increased inequality to the worst level since 1929.