Over the past decade, the labor market has undergone a shift towards what is being referred to as the gig economy.
A gig economy refers to a labor market that employs workers without having them fully affiliate with the company itself. Examples include services such as Uber or Doordash.
This subset of the workforce has been no stranger to criticism. Gig work is hugely beneficial to employers at the cost of the workers themselves.
Last year Utah passed S.B. 233, the Portable Benefit Plan. This legislation opened up the floodgates for gig workers to receive employer benefits. It is with this law that Utah joins an increasing number of states moving towards providing compensation for independent contractors.
While this law is a step in the right direction; it risks setting a precedent for the future.
The gig economy is inherently exploitative of its workforce. Despite efforts to reduce this, the gap between independent contractors and official employees remains.
If the Portable Benefit Plan intends to level the playing field, it must be able to compete with the usual benefits of full-time employment.
The Gig Economy
Gig workers make up an increasing proportion of the United States workforce. The official number rose to 57.3 million people, 36% of the U.S. labor force in 2023. In 2024, this number is expected to pass 76 million.
This is entirely the result of gig work being more efficient than hiring full-time employees. However, that efficiency comes at a price. A price that workers themselves must bear.
While it is true that gig workers have greater access to independence than the traditional 9-5, they receive next to no benefits. Gig workers aren’t classified as full-time employees. This means that their employers are not required to provide them with amenities such as retirement plans or tax assistance.
This reality is what has allowed gig work to grow at such an exponential rate. It is a system that is primarily advantageous to businesses, leaving workers out to dry.
Taking Strides
The Portable Benefit Act, and similar legislation nationwide, attempt to remedy this.
Alongside this, on April 10, 2024, Stride, a startup leading the way in providing benefits to gig workers, announced the launch of its contribution program in Utah.
It’s partnered with their first Utah company, Shipt. Shipt is a Target-owned company that employs independent workers to deliver groceries.
Stride aims to solve the three main challenges plaguing gig workers: health coverage, tax support and savings.
Regardless of whether it is successful in its intended endeavor, it is still uncertain whether or not this will truly benefit the workforce as a whole.
This is a positive step forward for workers currently subjected to freelance work. Nonetheless, the future of traditional employment is at risk of succumbing to the same fate.
The Future of Employment
So far, gig-work has been a unique subset of the economy, delegated largely to recently founded tech companies.
It is a model that these new companies have structured themselves around. Pioneering the use of independent contractors as the primary source of labor in the space.
This philosophy has proven effective in their respective industries, but it is not so easily transferable to other lines of work.
Despite this, it is only a matter of time before this mindset towards labor creeps into roles that have previously existed solely as traditional full-time employment. Established companies will not hesitate to attempt to capitalize on the same advantages.
This shift has the potential to alter the way work is viewed entirely, with workers most at risk of facing the consequences.
Maintaining Balance
Gig work provides employees with freedom and balance that is unmatched in the traditional woes of full-time employment.
On the other hand, gig workers face numerous consequences at the cost of that freedom. Many of these problems can only be solved by returning to the more usual labor model.
While it may be true that The Portable Benefit Act will have a positive effect on gig workers now, the future of labor hangs in the balance.
As the gig economy increases and becomes more commonplace, individuals must grapple with the implications which will coincide.
Embracing independent employment fully means being willing to provide all of the same amenities of traditional labor.
The challenge governments face is being able to ensure this while maintaining the allure of the gig economy.
The gig economy is still in its infancy, but it won’t be for long. To properly protect workers from its exploitative nature, there must be a tighter grip placed on the employers attempting to utilize it.
