By Noah Lang
There’s a lot of doom and gloom about the future of the economy, and the so-called Great Resignation suggests many workers are frustrated with their current jobs and eager for better opportunities. There’s a bright spot that cuts against these trends and might surprise many people. According to new survey data, a strong majority of independent workers, many of whom are gig workers, are optimistic about wages and happy with the flexibility of their work arrangements.
It’s no secret there haven’t always been enough protections or benefits for gig workers, but this data suggests new efforts to strike a better balance between flexibility and security are paying off. More than ever, gig workers are prioritizing benefits like healthcare – and want more education about how to access those benefits.
I see this every day at my company, Stride Health. We work with every major gig platform to help connect their workers with crucial benefits that help them support their families.
However, the future of gig work in California hangs in the balance in the next few weeks, as the California Appellate Court prepares to uphold or overturn Prop. 22, which expands access to benefits for gig workers while maintaining the flexibility they want. Voters overwhelmingly supported Prop. 22 in 2020, but it’s been tied up in legal challenges ever since. If the measure is struck down, it would hurt workers and the economy as a whole. Here’s why:
Prop. 22 gives workers the flexibility they want and the benefits they need. From ride-share drivers to food delivery workers, many gig workers support Prop 22 because it allows them to continue setting their own hours and work for multiple platforms, depending on their preferences, while also providing wage protections, healthcare stipends, and access to insurance coverage.
Surveys have found that nearly 90% of California gig workers say that flexibility is very important, yet it would go away if Prop. 22 falls. Instead, many gig workers would be forced to become traditional W-2 employees. Prop. 22 strikes the right balance – protecting workers’ freedom while creating a basic set of benefits and protections.
Upholding Prop 22 will protect jobs & wages and stimulate the economy. The 1099 economy, including independent contractors, freelancers, and gig workers, continues to rapidly grow. Overall, the number of independent workers has doubled since before the COVID-19 pandemic and reached a high of nearly 70 million people in 2021. Prop 22 is the first serious, large-scale attempt to address the changing nature of work by catering to the needs of workers trying to make ends meet and companies that are creating tens of billions of dollars of value building innovative products.
If Prop 22 is struck down, California’s economy – which is driven by both workers and tech companies – could be in for a real shock. As we approach a possible recession, we have to recognize that preserving Prop 22, as voters overwhelmingly called for, is key to protecting wages and maintaining economic stability. Just look at new data on gig worker wages: here in California, hourly earnings were $35 at the end of 2021, compared to $27 in 2019. We shouldn’t risk destabilizing a work opportunity that is both widely available and increasingly rewarding.
Prop. 22 is already spurring innovation in the benefits space. No matter how you feel about Prop. 22, we all need to recognize that work today looks different than it did even ten years ago. The traditional model that ties needed benefits like healthcare and retirement to a single, full-time job is broken – it just won’t work for people or for companies today.
On the heels of Prop. 22, we’ve seen new models pop up around the country, like in Massachusetts, Georgia, and Vermont. We can and should debate the merits of these new approaches, but what’s clear is that we need more innovation and experimentation around portable benefits, not less. Striking down Prop. 22 will stop that momentum and would be a real loss for workers and for America as we compete for economic growth across the world.
California has always been a state at the cutting edge. From music and movies to phones and apps, we’re the first to create and the fastest to adopt. Our openness to innovation is what led to the creation of the gig economy here in the first place, and it’s fitting that the first major battle to make the gig economy work better for everyone is taking place here as well.
Prop. 22 is a step in the right direction because it takes into account the needs of workers, companies, and everyday consumers, and I hope our legal system recognizes that.
Noah Lang is an Aspen Institute Fellow and founder & CEO of Stride Health.
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