By Michael Saltsman
Does the future of America’s labor movement run through our smartphones? As many as a quarter of American adults earn income as gig workers, either through an app-based service like Uber or Lyft, or as traditional freelancers. Labor advocates would grant gig workers the right to bargain collectively. But unionization might hurt these workers more than it helps.
One of the primary effects of collective bargaining is to reduce flexibility. A union contract provides stability with regard to earnings, benefits and hours, but the flip side of stability is rigidity. Gig workers who are forced to unionize can say goodbye to picking up work on their way home from school or in between social engagements. In other words, they will be locked into regular jobs—precisely what most of them were trying to avoid.
The Covid-19 pandemic has caused thousands of Americans to turn to gig work for the first time, and these workers make an attractive target to labor unions in need of new members. According to the Bureau of Labor Statistics, only 10.3% of U.S. workers belonged to a union in 2019, down from more than 20.1% in 1983. A successful organizing drive in the tech industry could help reverse this trend, but organizing gig workers is easier said than done.
The first hurdle to unionization is labor law. Today, gig workers are classified as independent contractors—a classification the National Labor Relations Board’s general counsel affirmed last year. That makes them ineligible to organize under the National Labor Relations Act. Efforts to organize gig workers under state and local laws have run up against similar roadblocks; in Seattle, the city’s novel gig-bargaining law collapsed in 2018 after courts found that it raised antitrust concerns.
Gig workers also face practical hurdles. They work independently and interact with one another infrequently, if at all. They also lack a clear bargaining partner. Consider: Many gig workers use multiple platforms, sometimes several at the same time. In that scenario, who stands in for the “employer”?
Labor’s allies have tried to leap these hurdles in a few ways. In 2019, California adopted Assembly Bill 5, a law aimed at reclassifying gig workers from independent contractors to traditional employees who can be unionized under current law. (California is currently in a legal dispute with several gig companies over whether the law applies to them.) New York, New Jersey and Illinois are considering similar laws. Several academics have also called on the Justice Department to relax federal antitrust standards to circumvent a Seattle-style legal challenge.
These responses share an assumption that gig workers would prefer to be full-time employees. The workers say otherwise.
A new poll conducted jointly by the left-leaning Benenson Strategy Group and right-leaning GS Strategy Group asked 1,000 on-demand drivers whether they would prefer to be full-time employees instead of contractors. Only 15% of respondents said they’d prefer full-time. A similar Global Strategy Group survey commissioned by Lyft found that 71% of the 1,092 independent contractors polled in August preferred their current status over full-time employment.
A 2019 study by Edelman Intelligence, Upwork and the Freelancers Union found that nearly half of the 6,000 respondents chose freelancing because their personal circumstances made traditional full-time employment impossible. More than 70% said they freelance because of the flexible scheduling.
The gig economy’s labor critics argue that on-demand employment leaves workers without the traditional suite of full-time benefits. But there are alternative ways to get workers these benefits without sacrificing flexibility. For example, Proposition 22—a measure on the ballot in California this November—would formally exempt on-demand shoppers and drivers from the reach of AB5, while offering new pay guarantees and benefit requirements.
The consequences of failing to get the balance right are serious. A study released earlier this year by the Berkeley Research Group, a California consulting firm supported by several gig companies, estimated that the number of app-based drivers in California would decline by up to 90% should the state succeed in forcing these companies to adopt a traditional employment model.
Exporting California’s approach nationwide would jeopardize creative business models that have provided so much to so many. We cannot assume that a 20th-century model still fits workers in the 21st century.
Mr. Saltsman is managing director at the Employment Policies Institute.