Rethinking social protections in the age of contractors

The job market is changing rapidly. While most workers of our parents’ generation could have reasonably expected to spend their entire working careers in permanent full-time jobs with one or two employers, today many rely on contract work or freelancing, and even regular full-time employees change jobs frequently. There are pros and cons to this shift, but one very significant problem with it is that our current approach to providing social protections in Canada and the US was designed around the old permanent employee model and does not fit the new new job market reality.

US economist Robert Reich made an interesting observation about this on Facebook:

Uber is estimated to be worth some $40 billion. GM is worth around $60 billion. 850 people work directly for Uber (not counting all the contract workers who Uber says aren’t its employees and therefore don’t get the labor protections accorded by law to most workers — Social Security, 40-hour workweek with time-and-a-half for overtime, worker health and safety, worker’s compensation, family and medical leave, minimum wage, right to bargain collectively). Over 200,000 people work for GM, and do get these protections.

If the future is more like Uber than like GM, most workers will be on their own, like piece-workers in the 19th century. If want a different future, we need to change our labor laws so any corporation that accounts for more than 80% of the work someone does or receives 20% or more of his or her receipts is that person’s “employer.”

What do you think?

This doesn’t just apply to the US. The labour protections Reich mentions — workers’ compensation, pensions, extended health benefits, paid sick time, parental leave, etc. — these are all employer-provided benefits in Canada too. If you are a contractor, or you recently changed employers you often aren’t eligible (with some exceptions like CPP but that’s currently not large enough be a sufficient pension on its own; it was meant supplement workplace pension plans).

The job market has changed and it’s time for our social policy models to change with it. In my view, Reich’s proposal of trying to force today’s job market relationships into the old employer-provided benefits model is a bit like forcing a square peg into a round hole. It doesn’t quite fit.

Here’s a better idea: let’s shift to providing labour protections by the state. This way every worker would be eligible, regardless of who they work for.

And while we’re at it, it’s time to move to European-style sectoral bargaining, where workers are able to collectively organize by industry (instead of workplace by workplace) and bargain with major employers together.

Topics: Economy, Employment & labour, Poverty, inequality & welfare