The Gig Economy is Thriving and the Biden Administration Isn’t Happy About It
Virtually anyone in city or state government knows the key to success in public service is to watch what California does and do the opposite, which explains why the federal government under Joe Biden continues to look at Gavin Newsom as a beacon of virtue.
In the latest ill-conceived plan to crush small business, Biden’s Labor Department has proposed changes to the Fair Labor Standards Act (FLSA) based on California’s unpopular AB5 gig worker law, which punishes independent contractors and the gig economy in general.
The Expected Changes to the FLSA
Clearly understanding the dampening effect these new regulations will have on independent contractors (ICs), the Department of Labor conceals its true intentions by claiming the new rules will “increase clarity, reduce litigation, improve labor market efficiency and encourage innovation in the economy.”
Uh huh… Yeah, right.
Why the Government Wants to Eliminate the Gig Economy
At the core of every progressive policy at the federal level is the thirst for more control. Whether it’s freedom of movement, expression or livelihood, Democrats want to influence virtually every aspect of your life. The gig economy, which flourished under President Trump, is a threat to that control because it’s too decentralized for their liking.
As of 2018, there were 57 million people working independently. Most of them are sole proprietors, like Uber drivers or manufacturers’ representatives. The sheer size of the gig economy makes it extremely difficult for the IRS to monitor and control. The Labor Department believes businesses and ICs are keeping money that rightfully belongs to the government, so by forcing ICs to become part of corporate America, monitoring and controlling them would be much easier. For example, if 1000 Uber drivers are forced to join Uber as employees, the government can scrutinize all of them through one audit of Uber, which is much less time intensive than auditing each individual Uber driver.
Unlike ICs, companies are required to pay matching social security and unemployment benefits for their employees, which would be a huge revenue generator for the government. Additionally, many gig economy workers receive federal subsidies for health insurance that would be eliminated if ICs were forced to enroll in a large company’s healthcare plan.
The Real Goal of the New Regulations
Based on their track record of deception, the current effort to change the FLSA does not reflect the true long-term objectives of the Biden administration. When Democrats want to implement radical policies they suspect constituents will resist, they typically start small and ramp up, but make no mistake: the gig economy is in their crosshairs.
People become independent contractors because they enjoy the freedom and flexibility in setting their own hours and working unsupervised in an environment of their own choosing. Progressives hate that. Their long game is to destroy the gig economy and move workers into large pools where it’s easier to track their earnings and maximize the government’s take. Ultimately, progressive socialists want to place such onerous regulatory burdens on employers, they will be forced to hire employees (hopefully unionized) to do the work currently outsourced to ICs.
What You Can Do
Independent contractors, of which I am one, represent one third of the total U.S. workforce. This gives us tremendous leverage if we choose to exercise it. If you are an IC and want to continue to see the gig economy grow and thrive, make sure your voice is heard. The Labor Department is accepting comments from the public regarding the proposed changes through the Federal eRulemaking portal.
By now, we should understand that if we don’t step up and get involved, we have no right to complain when we wake up in a world created by woke progressives.