Employee benefits in America's gig economy

Here's everything you need to know, from all perspectives, in four paragraphs:

Are Uber drivers independent contractors or Uber employees? asked James Surowiecki at The New Yorker. For the booming on-demand services industry, "there may be no more important question." Employees are entitled to benefits like health insurance, a minimum wage, 401(k) plans, and sick pay. Contractors get freedom and flexibility, but few protections. Plenty of Silicon Valley startups have reached sky-high valuations thanks to their reliance on contractors, who clean houses, deliver groceries, or ferry you to the airport at the tap of an app. But last month, the California Labor Commission ruled that one of Uber's drivers is, in fact, an employee. The ruling was limited to just one driver, and Uber has vowed to appeal. But similar fights are brewing elsewhere, as more Americans join the gig economy. If other regulators follow California's lead, "it's not just Uber that would be transformed. The U.S. job market would be, too."

Sharing-economy firms like Uber "have always been based on something of a sham," said Michael Hiltzik at the Los Angeles Times. They pretend "that the drivers are working for themselves, not for the bosses." In reality, the company is just ducking its responsibilities, while pocketing most of the proceeds of workers' labor. Yet the answer isn't to force Uber to suddenly employ hundreds of thousands of drivers, said Arun Sundararajan at Financial Times. Such a requirement would inevitably raise costs for consumers and put plenty of startups out of business. It would also rob contractors of the flexibility they crave.

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But we're right to be concerned that the sharing economy is leading to greater inequality, with a wealthy upper class "tended to by an on-call and poorly compensated underclass," said Jeff Spross at The Week. So rather than fight a losing battle against changes in the way we work, why don't we "adapt to the new world" and disentangle benefits from the job contract and provide them separately? Our work laws and job-dependent safety-net programs were forged decades ago, "when manufacturing was a big part of the economy and people tended to stay at the same job for life." That era isn't coming back. It's time to update our expectations of "what jobs can deliver."

In the meantime, we could establish a new class of worker, said Alan Hyde at Quartz. Countries like Canada and Sweden already recognize so-called dependent contractors, who are self-employed for some tax purposes but also enjoy basic protections. We could also introduce a system of "microbenefits" that would be prorated and portable, said Felix Salmon at ​Fusion​.​ Workers could accrue them for any kind of work, even an hour-long gig. "Add them all up, and they would start carrying real heft." This could work a "little like Social Security," but with small amounts of money paid into an account for nonretirement benefits such as unemployment and maternity leave. It's an admittedly tall task. But if we can make it work, "America might well find itself at the forefront of an exciting new chapter in labor economics."