Rep. David Schweikert said that as the sharing economy has transformed how young people work, labor laws need to change with the times.
“Particularly for millennials, income is going to have lots of options, where in the morning you may be a contract graphic designer; in the middle of the day you may be using your residence AirBnB, and at night you may be driving an Uber car, and somewhere in between you may be doing something else,” the Arizona Republican told the Washington Examiner.
Such diversity of employment will be made possible by the kinds of websites or applications that are already familiar to users of Uber, a taxi alternative that enables drivers using their personal cars to pick up customers in cities across the country.
The proliferation of those job platforms could prove crucial to millions of people, especially when the overall economy is weak and careers that involve punching a clock at the same company for decades are increasingly difficult to find. But they don’t fit comfortably within the tax and labor laws devised in the last 100 years, and Schweikert wants to make sure that old rules don’t stifle “the new economy.”
“There’s still some confusion and concern out there about if someone is working in the new economy, which is substantially the data-driven economy, does that actually move up against what the current definitions are for an independent contractor?” he said. “How do you make sure that that kind of optionality for making a living isn’t shut down because of tax definitions?”
Schweikert introduced a bill during the long summer recess to provide an answer. H.R. 5918 would establish that workers in the new economy qualify as independent contractors under federal law, rather than employees of the company, such as Uber, that created the application.
The ability to decline the work and to set your own hours is one of four tests that Schweikert would use to define an independent contractor. The other three are familiar to anyone who uses Uber, as riders can evaluate their drivers on “a user-based rating system,” and the driver provides an electronic receipt and uses his “own tools or assets” — in this case, a car — “to provide such services.”
Such a definition would allow the businesses to launch without acquiring the high costs that go along with traditional employer-employee relationships.
“Let’s say you get your resume, you sign up for an independent writing website for people that just need something promotional written,” he explained. “Because that work comes to you through a database, does that service that was managing the data turn you into an employee? Or are you an independent contractor, because of your ability to accept or not accept [the work]?”
Schweikert avoids using the Uber analogy because he thinks that kind of technology will create far more opportunities than politicians realize. “We always jump to Uber because we see it. If you don’t want to do Uber, what if you want to make cupcakes and sell them in your neighborhood?” he said. “We don’t know what’s coming next and we need to make laws that allow for the next thing.”
The technology might be new, but the issues at play in Schweikert’s bill are bound to revive the old familiar fights between labor and capital that took place throughout the 20th century. Massachusetts Sen. Elizabeth Warren, the leading progressive in Congress, acknowledges the benefits of the new companies, but warns against “the dangers” of letting them grow without significant regulations.
“It’s exciting — and very hip — to talk about Uber and Lyft and Taskrabbit, but the promise and risks of these companies isn’t new,” Warren said at the New American Annual Conference in May.
“For centuries, technological advances have helped create new wealth and have increased GDP. But it is policy — rules and regulations — that will determine whether workers have a meaningful opportunity to share in that new wealth.”
Warren has a suite of proposals designed to ensure they can, by erasing some of the distinctions between “gig workers” and traditional employees that Schweikert’s bill would delineate, for instance, and allowing all workers to unionize. But Schweikert thinks such policies would make it harder for the companies to get off the ground.
“We don’t know what the future is, but we know that the best way to take advantage of that future is to make sure that both those with an opportunity and those who might want to accept an opportunity have as much optionality as possible,” he said.
The Arizona lawmaker doesn’t want to play the GOP role of defender-of-business against Warren’s worker-friendly rhetoric. Instead, he thinks “the new economy” has the potential to profit low-skilled workers who have struggled in recent decades by making it easier for them to connect with employers who have jobs that they can perform.
“How do I connect folks that would be on the marginal skill side, using high technology, for the types of jobs that I have that don’t require lots of skills?” he said. “Because right now, there is an informational gap there.”
Schweikert’s bill has only the slimmest of chances to pass into law this year, but the issue isn’t going away in the next Congress. And although Democrats have plenty of labor-friendly arguments to make against such proposals, he thinks that the new economy will bring new political pressures to bear on their coalition.
“If you’re a Democrat, you have a very difficult position here because you want to continue to cater to what you consider a young, hip, new-economy constituency, but your life is beholden to the money and resources that come from organized labor, and the two of those don’t line up well with each other,” he said. “So it’s going to be fascinating to see how they handle that.”
