Free Radicals: New Ideas for the Gig Economy

The rise of the independent workforce is one of the most important trends in our economy today, yet the topic is invisible in our public discourse.  With the exception of Sen. Mark Warner (D-VA), I can think of few public officials who even acknowledge that independent work is now the norm for a large share of our workforce.  And, because protections for these workers and solo entrepreneurs is minimal, many of them face precarious situations related to health care, retirement, and workplace protections.

Here in the US, we’ve opted to ignore this elephant in the room.  It’s too complicated to discuss!   It is a tough topic and solutions are not easy, but it’s time to at least start discussing solutions. Thankfully, our colleagues in the UK are beginning to have these types of public discussions which I’ve blogged about in past posts.  A new study from Demos, Free Radicals, is the latest example of new thinking about the future world of work.  This is a long study that contains many insights, but a few stand out.  It finds that most independent workers (80%) like the work and intend for this to be a permanent situation.  Seventy percent note that they do not intend to take “regular” work.   What does this mean?  It means that these are not “gigs.”  Instead, they are a new way of working which requires protections and benefits just like traditional jobs.  This is an issue that isn’t going away.

The study also includes a host of interesting policy recommendations.  A few new ideas include:

• Automatic enrollment for independent workers in a pension fund with small government matching investments.
• A new “engagers tax” for firms that use free lancers.  These funds would help support the proposed pension plan.
• Development of new financial tools for savings and retirement that are geared to the independent workforce.
• Refinement of other benefits, such as maternity and paternity leave, to extend similar protections to independent workers.