Inflation has fallen to its lowest rate in
two year
s and the Federal Reserve has paused interest rate hikes, but storm clouds still loom on the economic horizon. Even as monthly labor reports
outperform expectations
, only 24% of respondents described the national economic conditions favorably, according to a recent poll from the
Associated Press
. In May,
overall consumer confidence
declined for the fourth time in five months. And more than half of respondents to an
Economist
-YouGov
survey believe that the country is in a recession.
Amid the widespread uncertainty, there are reasons for hope. As the pandemic fades and the world returns to normal, the gig economy industry is growing
three times faster
than the national rate. Yet rather than protect this environment and maintain strong wages for workers, misguided policymakers are making matters worse.
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Consider the Federal Trade Commission. Under the leadership of Chairwoman Lina Khan, the commission has morphed from a bipartisan agency into a
political lightning rod
. Long an antagonist of the technology sector, Khan has targeted a bevy of private sector companies in a series of questionable decisions, many of which have been rebuffed or
rejected
by the courts. Khan made
national headlines
most recently for taking Amazon to federal court. Oversteps during her crusade
against Meta
led to a congressional investigation.
The gig economy likewise seems to be on
Khan’s hit list
. Last fall, the FTC vowed to “
use its full authority” to
investigate gig companies. App-based platforms are being unfairly singled out by an agency gone rogue.
With the high-profile
resignation
of the last remaining Republican commissioner, the FTC has no representation from the minority party and is run entirely by Democratic appointees. Meanwhile,
high-profile progressives
are hammering other Democratic-appointed FTC commissioners for slow-walking the attacks on the tech industry.
Then there is the Department of Labor. Following former Labor Secretary Marty Walsh’s resignation in March, President Joe Biden nominated his deputy, Julie Su, to the top job. Like Khan, Su has a troubling record when it comes to the gig economy. In her previous position as secretary of the California Labor and Workforce Development Agency, Su supported crippling regulations at the state level aimed squarely at stifling flexibility.
Specifically, she was a
vocal proponent
of the union-backed FAST Act, a law creating a 10-member council with wide authority to determine wages and benefits at restaurants. Su also helped implement Assembly Bill 5, a California law adopted in 2019 that dramatically curtailed the ability of workers to be considered independent contractors. Thankfully, voters rejected AB 5 by passing
Proposition 22
in 2020, protecting flexibility for the gig economy.
The next labor secretary is poised to play a major role in the future of the gig economy. This fall, the Department of Labor will issue its final rule clarifying independent contractor status at the federal level. It is nothing more than an attempt to export California’s AB 5 to the entire country. Su has dodged pointed questions on the matter, but her
strong support from Big Labor
belies her true priorities.
Thankfully, Su’s nomination remains in limbo. Three key Democratic votes — Sens. Kyrsten Sinema (I-AZ), Joe Manchin (D-WV), and Jon Tester (D-MT) — remain on the fence.
Things aren’t any better at the municipal level. In New York City, the Department of Consumer and Worker Protection ushered in an extreme new minimum pay rate for food delivery workers that could have workers receiving upward of $33 per hour while on a delivery when fully implemented in 2025. Try explaining that to NYC municipal workers, EMTs, or local firefighters who will be making barely half that wage.
While paying fair wages is a worthy goal, this unilateral mandate will have devastating and far-reaching implications. The city itself has made clear: Increased prices will get passed on to the consumers. As a result, alarm bells are beginning to sound: Restaurants are concerned about how this will inevitably
reduce orders
, and delivery workers, the same ones the city was trying to support, fear
more stringent requirements
that will limit their flexibility. It should come as little surprise then that such a broken process for implementing this policy has
left no one happy
with the outcome.
The nation’s economic forecast remains jittery. Policymakers in Washington and across the country must focus their efforts on fixing what is broken, not creating more hardship for gig economy workers. If politics gets the best of this industry, it will only result in the unintended consequence of more workers searching for ways to earn wages for their families. Let’s hope common sense prevails.
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Tim Young is an author, comedian, and editor of the National Mouth.
