Opinion

A Social Compact for the Modern Economy Demands Cooperation

For all of our progress since the Great Recession and the promise of innovation, technology platforms must wake up to a harsh truth: It’s not enough. The innovation economy demands a reinvention of the social contract to protect the American worker, and tech must be responsible for our share.

For many years, our society felt the threat of supply chains being shipped overseas. But today, the American promise frets the pace of automation; artificial intelligence bias; and an independent workforce divorced from benefits. To forge a new social compact that reflects the way we live and work, tech, labor leaders, and those in positions of public trust must set aside the division that has roiled debates across our country.

The issue is not if we should protect the worker voice and the unions that have helped build our middle class, but how we do so in the era of flexible work. The debate is not whether we invest in early childhood education and adult learning for automated tools spreading across factory floors, but how we train people for these realities. The fight is not if we offer benefits to millennials who freelance or shift jobs, but how we make those benefits portable across them.

Polarized civic debates only paralyze our sense of cooperation and shared responsibility. Systemic challenges, such as wage stagnation and economic uncertainty, are larger than any one actor or industry. We must all be part of the solution in guiding these discussions.

First, in light of recent court rulings, California is uniquely positioned to kickstart a discussion that is both pro-innovation and pro-worker. In advance of the 2019 legislative session, Gov. Jerry Brown, his successor and legislative leaders should call on tech, labor, and workers of all stripes to retreat from political barbs and come to a common table to collaborate on the Future of Work.

Second, we must decouple benefits delivery from a single employer. For generations, our safety net was designed around a specific model. Labor unions won battles on workers comp and pensions, and those gains helped build our country’s middle class. It made sense to tie benefits to a job, because there was little employment mobility. But it’s time we affirmed the dignity of work separate from the dignity of a job alone. Lawmakers, labor, and industry can minimize gaps in worker compensation and ensure that workers receive health coverage, retirement, paid family leave, unemployment insurance and other benefits in the new economy.

However to prioritize worker voice, we cannot make assumptions about the benefits workers seek. A student may need cash on-demand, whereas others may be more keen on paid time off or vocational training. Transparently sharing data about modes of work and the benefits workers prefer can provide them a greater voice in the 21st century model.

Third, we must enact floors of protection for flexible work. Under current law, independent contractors are by default not protected from workplace discrimination. According to the Bureau of Labor Statistics, about 5.9 million individuals held temporary jobs and 10.6 million independent contractors worked in alternative work arrangements last year. And while this trend isn’t slowing down, the durability of our social compact has not kept up.

Gov. Jay Inslee of Washington state has extended paid family leave to independent contractors. And within the last year, Brown expanded long-term savings vehicles to independent workers through CalSavers. But an inconsistent patchwork of antiquated laws precludes us from doing more like offering basic protections or connecting workers to upskilling programs.

Fourth, we need rich authoritative datasets on the new economy. Congress must fund regular surveys of workplace arrangements to include on-demand work. While this year’s release by the Bureau of Labor Statistics and the Aspen Institute’s Data Hub are good starting points, app-based platform data is not published by the Department of Labor regularly. These insights must be paired with transparency from tech platforms. At Postmates, we’ve begun to survey our fleet asking the benefits they’d like: Paternity leave? Long term savings accounts? With sunlight, lawmakers can address these challenges and we can define a truly responsive social compact.

It’s a central American value to balance innovation and hard work with a shared commitment to the basic compact: that if we work hard and do our fair share, everyone should be able to get ahead. Work is not just a source of income. It provides a sense of community, purpose, and dignity.

Today, with the power of an internet connection and an idea, nearly anyone can work for themselves in pursuit of those shared goals. This has not only lowered barriers to entry for our Postmates to earn an hourly wage 153 percent higher than the federal minimum; it has also enabled our fleet to earn $217 million, while 80 percent of our Postmates worked 20 hours or less a week. Local brick & mortar retailers sold $1.2 billion across our platform, giving them a fighting chance against goliaths like Amazon.com Inc. And our follow-on economic impact in communities across the country totaled $6.6 billion.

Friday’s release of the contingent worker supplement on electronic platform work reflects what we’ve observed. According to BLS, gig workers are more likely to supplement their income working fewer than 35 hours per week.

But this shift in how we work requires us to re-examine our assumptions, and renew our focus on how economic stability is intertwined with upward mobility.

Traditional metrics, such as JPMorgan Chase & Co.’s report on gig work, fail to account for actual hours worked. As app platforms have lowered the barrier to entry for work, it’s become easier than ever to work for short periods when needed. Postmates earn an average of $18.32 per hour, and thanks to our investments in efficient fleet routing, we expect that number to grow.

These challenges demand that labor and industry become working partners rather than sparring partners. We must each own our responsibilities in how we shape the means by which Americans make a living. Let’s get to work.


Vikrum Aiyer is vice president of global policy and strategic communications at Postmates.

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