Clinton Calls Out Uber, Airbnb and Etsy in NYC Speech
This article originally appeared in Forbes on July 14, 2015.
Presidential hopeful Hillary Clinton delivered her first major speech outlining her economic platform yesterday at New York City’s New School. Not surprisingly, the Democratic frontrunner took on Wall Street, advocated for women’s rights, and emphasized the need to raise wages for America’s middle class.
She also took aim at the flourishing gig economy, expected to generate $335 billion in economic value this year. “Many Americans are making extra money renting out a small room, designing websites, selling products they design themselves at home, or even driving their own car,” she said. It doesn’t take a rocket scientist to figure out that those descriptions were thinly veiled references to on-demand marketplaces Uber, Airbnb and Etsy.
“This on-demand or so-called gig economy is creating exciting opportunities and unleashing innovation,” she said. “But it’s also raising hard questions about workplace protection and what a good job will look like in the future.” While vowing to crack down on employers who misclassify workers as independent contractors (calling it “wage theft”), Clinton also seemed to associate wage stagnation and economic instability with the rise of the on-demand economy.
While we fully agree with the former Secretary of State about many of the economic policies she laid out yesterday (equal pay legislation and tax code reform), we were hoping that instead of casting doubt on the flourishing on-demand economy she might have instead embraced the government reforms needed to drive growth in this increasingly important sector.
While there is an interesting policy debate to be had on this topic, it shouldn’t be about criticizing the on-demand economy and the flexibility and choice that it presents. Rather, the real discussion we need to have should focus on modernizing antiquated labor laws, protecting a new class of independent workers and ensuring government legislation supports, not stifles economic growth.
Today’s labor laws reflect decade-old definitions that simply don’t account for the nuance and complexity of today’s economic landscape. It would have been refreshing to hear Clinton tackle some of the government’s shortcomings in supporting the newly formed on-demand economy instead of shifting blame to the private sector.
Legal scholars, politicians and economists have already begun calling for new reform as it relates to inadequate labor legislation. Senator Mark Warner (D-VA) has called on his colleagues in Congress to create a social “safety net” to protect this new class of on-demand workers. U.K. Prime Minister David Cameron recently appointed a “freelance czar” to spearhead this issue in his country.
In an effort to help advance the debate, we’ve documented some policy recommendations that will help fight wage stagnation, eliminate friction in the markets and provide a framework for, as Clinton calls it, a “growth and fairness economy:”
- An increase in the Self Employment Plan tax deduction to encourage independent workers to save for retirement.
- Allow independent workers to pay into and be supported by unemployment and disability insurance, although do not require such. Opt-in can be done annually as is done with healthcare.
- Create market based exchanges for independent workers to buy affordable health insurance…oh wait that one was already done.
- Simplification of tax code for freelancers (well for everyone).
- Streamline the patchwork of state labor regulations to a nationwide standard so companies can engage independent workers with a clear set of rules.
- Simplify the licensing standards for small businesses to a nationwide standard so freelancers can offer their skills to more customers.
Marina Gorbis, a futurist and social scientist at the Institute for the Future (IFTF), said it best: “…we have a once-in-a-century opportunity to address long-standing inequities and build a labor economy for the future that is fair, creative, and suited to the tasks of the 21st century.”
The future of work is here and the time for action is now. Mrs. Clinton, we’re here to help…consider us at your disposal.