America’s gig economy represents a rare unalloyed success story from the tumultuous past decade. It brought a new universe of opportunities for workers, consumers and businesses, and accounted for $1.3 trillion of the U.S. economy even before COVID.
Naturally, that attracts the menacing gaze of the Biden Administration, which seeks to reorder it in trademark Biden fashion.
Undeterred by its failures regarding inflation, gas prices, domestic energy production, Afghanistan, a military recruitment crisis spawned by its woke agenda, crime and even a persistent baby formula scarcity eight months after that crisis emerged, the Biden Administration now directs its calamitous brand of intervention toward this American success story.
Specifically, Biden’s Department of Labor just proposed a new rule reclassifying tens of millions of gig workers, involuntarily, as formal employees, which would deprive them of the autonomy that draws them to gig work in the first place.
Currently, gig workers enjoy the freedom to set their own hours, work when and where most convenient for themselves and their families, choose their own prices, accept or decline work based upon safety priorities, work simultaneously for different and even competing companies in the same field and other advantages. Gig work can also prove invaluable for unemployed Americans while they seek full-time employment in other fields, or provide supplemental income for people whose professions offer irregular earnings such as musicians, artists or parents who must maintain flexible work schedules.
The gig economy also offers American consumers advantages unavailable until recent years, such as rideshare services like Uber or Lyft, or quick delivery services like DoorDash.
So why would the Biden Administration risk the ire of tens of millions of workers, consumers and businesses by upending the thriving gig economy?
Because Big Labor overlords want it.
Under federal labor and antitrust laws, independent contractors cannot be unionized, or their earnings confiscated for union political activities. That’s a problem for union leaders and the leftist politicians who depend upon their support, with the Labor Department announcing that private-sector union membership fell to a historic low of 6.1% last year, from its 1954 peak of 34.8%:
In 2021, the number of wage and salary workers belonging to unions continued to decline (-241,000) to 14.0 million, and the percent who were members of unions – the union membership rate – was 10.3 percent, the U.S. Bureau of Labor Statistics reported today. The rate is down from 10.8 percent in 2020 – when the rate increased due to a disproportionately large decline in the total number of nonunion workers compared with the decline in the number of union members… The union membership rate of public-sector workers (33.9 percent) continued to be more than five times higher than the rate of private-sector workers (6.1 percent).
Consequently, union bosses desperately seek to reverse membership declines and boost revenues to subsidize political activities and maintain union leaders’ high salaries.
Consumers and gig workers, of course, would end up paying the price.
For millions of gig workers, it would end their flexibility to set their own hours and other working decisions that draw them to the work. Instead, employers and union collective bargaining agreements would make those decisions for them, with one-size-fits-all replacing flexibility and free choice.
It’s important to highlight that gig workers overwhelmingly prefer current standards. According to one survey, 86% of Uber drivers choose gig work for its scheduling flexibility, 66% opt to work for multiple competing companies, 75% prefer the flexibility to choose their benefits even at the expense of higher pay (as opposed to a one-size-fits-all benefits model typically imposed by union contracts), and only one-quarter wish to work full-time. Workers prefer choice and flexibility, not rigid employment structures or strict union workplace rules.
As for consumers already struggling amid high inflation, prices would rise even further. According to Wedbush Securities analyst Dan Ives, for example, the Biden Administration’s proposed rule could increase companies’ labor costs by 15% to 30%. “It would be a major albatross,” Mr. Ives said, “that would turn their business models upside-down.”
Notably, this constitutes the Biden Administration’s second bite at this apple. It attempted to impose this reclassification rule during the opening weeks of its tenure, but a federal judge overturned their attempt. Additionally, California imposed a similar rule back in 2019, but even that state’s deep-blue electorate voted to overturn it in a 2020 ballot initiative. The Biden Administration will simply not be deterred from its desperate, politically motivated pandering.
In this era of increasing flexibility and evolving needs, the gig economy allows workers a wide array of earning opportunities while achieving a more desirable work/life balance, and it brings consumers benefits scarcely imaginable even a decade ago.
In contrast, the Biden Administration has managed to bungle every agenda item that it has pursued. Americans should be outraged and not allow it to add an increasingly critical gig economy to that list.