By Sen. Mark R. Warner (D-VA)
It took a global pandemic for Congress to finally, tentatively wake up to major flaws in America’s social safety net. Sitting in negotiations for the third coronavirus relief, known as the CARES Act, I remember as my colleagues began to acknowledge that the U.S. unemployment insurance program failed to cover millions of workers who make a living as independent contractors, freelancers, “gig workers,” and self-employed entrepreneurs.
The “contingent workforce” has been around for decades, long before internet platforms like Uber, Airbnb, Postmates, and Taskrabbit enabled the rise of the “gig economy.” According to the Bureau of Labor Statistics, independent workers make up around 10% of the workforce—approximately 16 million people. But, that doesn’t take into account those who supplement traditional jobs with income on the side or millions of workers in the service and agriculture industries who often work jobs that don’t offer reliable benefits. We know that the majority of service sector, part-time, and low-wage workers in America don’t have access to healthcare, paid leave, or a telework option through their employer.
For years, I’ve been telling anyone who would listen that our system was increasingly leaving millions of workers behind. But, it took the prospect that millions of Lyft drivers, hair stylists, truck drivers, freelance designers, handymen, and other independent workers could be stuck with no income and no safety net to fall back on in the middle of a pandemic for Congress to act.
Fortunately, Congress recently took a first, if temporary, step towards correcting this gaping hole in our unemployment insurance program. The bipartisan coronavirus relief package Congress passed contains the most dramatic expansion of unemployment insurance in decades, finally extending benefits to independent workers, the self-employed, as well as part-time workers who’ve had their hours cut.
This expansion of eligibility is an important step, and one that Congress should look to make permanent in a financially sustainable way – supported by employer contributions – once this crisis is over. But, unemployment insurance is only one piece of our social insurance system.
Even before we began to feel the economic consequences of the coronavirus, gig workers were sounding the alarm that their lack of access to paid sick leave could create a potential threat to public health, where sick workers would be forced to choose between their health and a paycheck. At the beginning of this pandemic, I called on the largest gig worker platforms to provide paid sick leave for drivers getting treated, quarantining, or caring for a loved one with COVID-19. I am glad that several companies stepped up to provide this assistance for their workers before it led to a public health emergency. But as recent organizing by gig workers has demonstrated, paid leave for sick workers is just the tip of the iceberg.
Recognizing the public health challenges facing workers in other fields who lack these benefits, Congress temporarily expanded paid leave to some workers as part of the coronavirus response. But millions more still lack paid sick leave, and the temporary nature of these coronavirus relief programs mean the cracks in our system will open right back up when this crisis is over.
Congress should not simply wait until the next economic calamity to swoop in and try to catch these millions of Americans who have been failed by our social safety net. While our first priority must be weathering this crisis, our recovery must include structural reforms that guarantee a social safety net to every American. To do that, we must find a way to ensure access to our entire system of social insurance, including healthcare, unemployment insurance, paid leave, workers’ compensation, skills training, tax withholding, and tax-advantaged retirement savings.
We need to move towards a portable benefits system that allows Americans of all walks of life to pay into package of benefits that can follow them from job to job or gig to gig. The program doesn’t necessarily have to come from the federal government—labor unions, technology firms, state, and local governments, or consumer-employer partnerships like New York’s Black Car Fund may be part of the solution.
I’ve proposed a portable benefits pilot program that would empower states, local governments, and worker advocate non-profits to experiment with these ideas, and I am hopeful that we can include this bipartisan proposal in future coronavirus relief legislation. We need to patch the holes in our social safety net now, not when the next crisis hits.
Sen. Mark R. Warner, a Democrat from Virginia, is a former technology entrepreneur and Governor of Virginia. He serves on the Banking, Budget, Finance, Rules and Intelligence committees.
CNBC Op-Ed: All the good jobs in America are at risk of going to a handful of cities, but there’s still time to stop it
Jun 12 2019
All the good jobs in America are at risk of going to a handful of cities, but there’s still time to stop it
By Sen. Mark R. Warner
The truth is, the opportunity to earn a good life through hard work is moving out of reach for too many Americans. As someone who has benefited greatly from our free enterprise system as an entrepreneur, I recognize that modern American capitalism just isn’t working for enough people in this country.
Over the last 50 years, globalization, automation and disruptive technologies have both destroyed and created millions of jobs. But the benefits have not been spread evenly. The result is an inequality of opportunity, with new, good-paying jobs increasingly concentrated in a handful of urban centers, available to a small, skilled workforce that does not represent the racial, geographic and socioeconomic diversity of our country.
Workers now face not only historic income inequality but great income insecurity due to the growing threat of their jobs being automated, outsourced or eliminated in the next round of corporate mergers. These problems are only made worse by companies that put short-term profits ahead of long-term growth — prioritizing mergers and acquisitions over investments in their physical and human capital.
Unfortunately, the temptation for policymakers is to treat the symptoms of inequality when what we really need is a new economic model to prepare Americans for work in the 21st century.
Let’s address the issue of income insecurity and recognize that many folks aren’t working one job for their entire career or even one job at a time. We need federal and local government to experiment with industry to develop a portable benefits system to follow workers from job to job and gig to gig.
We also need to think big. We need real bipartisan tax reform that rewards hard work and investments in American workers. Now, if a company buys a new robot to replace its workers, that’s an asset. If the company invests in training its workers, that’s an expense. Let’s fix that. While we’re at it, let’s replicate the success of the R&D tax credit and give companies an incentive to train low- and moderate-income workers to help them climb the economic ladder.
We need to do this if we are serious about closing a skills gap that will only get worse with automation. One recent study found that by the year 2030, up to one-third of American workers will need to retrain or change jobs to keep up with disruptions due to automation and a changing economy. We need to radically change our approach to job training in this country, from investments in community and technical colleges, to apprenticeship programs, to savings accounts that aid in lifelong learning.
The American dream might feel like it’s fading away. But it doesn’t have to be that way. Done right, we can rebalance the economic scales a little more in favor of American workers while nurturing the competitive spirit that built the U.S. economy into the dominant global force it is today.