The Biden Labor Department recently blocked a regulation concerning gig workers and independent contractors, and as Bloomberg reported last week, “The Biden Administration faces mounting pressure from the left to launch an enforcement investigation against a gig power.” The goal: forcing gig companies to classify gig workers as employees who can join a union and pay union dues.
Biden is just making good on his promise to Big Labor union cronies by doubling down on orders and investigations that would hurt gig workers and the many customers who have been able to access desperately needed services such as contactless food delivery and alternative transportation thanks to the gig economy.
This move by the Labor Department will hurt gig workers and dry up the income they rely on through their freelance work, including for ride-share and food-delivery companies. The Biden administration should instead resist efforts to impose red tape on an industry that supports both workers and consumers.
“Dashers work fewer than four hours per week on average and they overwhelmingly tell us how important the flexibility to earn on their own schedule is to them, which is exactly why we remain committed to protecting their independence while providing greater benefits and security,” Elizabeth Jarvis-Shean, vice president of communications and policy at DoorDash, said in a statement.
The gig economy also serves as a critical stopgap for those between full-time jobs. Indeed, many people out of a job because of pandemic-related lockdowns shifted gears and went to work in the gig economy to try and make ends meet.
The preservation of the gig economy lets workers maintain flexible work hours, enables many to supplement their income, including retirees struggling as prices continue to rise, and even serves as the first job opportunity for many who otherwise couldn’t gain access to the labor market.
As Kevin Chapa, a 27-year-old flight attendant from San Francisco, told the Wall Street Journal, forcing freelance app-based drivers to become employees doesn’t make sense and that independent contractors who depend on Uber and Lyft would suffer as a result.
“For a lot of people, that’s the point, I feel, of having Uber, Lyft, Instacart, is extra side money and being able to choose your hours,” he said. “And if they were to take that away and implement some kind of schedule … that would defeat the whole purpose.”
Politicians should acknowledge the importance of the gig economy instead of erasing it. Subjecting the gig economy to costly regulations (or, worse, setting policy through enforcement and litigation as DOL seems set to do) would force the cost up for consumers and put these critical services out of reach for the very people who most need contactless delivery options and easy access to ride-share.
The neighbor fighting cancer who gets her groceries delivered, for example, or the elderly gentleman on a fixed income who needs a safer way to get to the doctor’s office — both would be unable to afford gig services if coastal elites have their way in this matter.
The Biden administration should abandon this misguided effort and instead take note of California voters’ resounding rejection of just this policy last year. The Golden State’s attempt to classify independent contractors as employees backfired to the point that voters decisively rejected it.
Or perhaps Biden should listen to his own expert advisers. Seth Harris, for example, who served as deputy and acting labor secretary for President Barack Obama and is currently deputy director of the National Economic Council and deputy assistant to Biden for labor and the economy. In a 2015 paper on the gig economy for the Hamilton Project, he stated that “a minimum wage for each hour worked and overtime for hours worked in a week in excess of forty” is “impossible to properly administer for independent workers.”
Harris knows what he is talking about, and Biden should listen to him.
A federal mandate that companies treat freelance workers as employees would eliminate job opportunities at a time when policymakers should be devising ways to get people safely back to work.
Tammy McCutchen served as the administrator of the Labor Department’s Wage and Hour Division during the administration of President George W. Bush.
