How the Temp, Outsourced, and Contracted Economy is Fueling Political Discontent and the 2016 Election
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A favorite parlour game among the D.C. media is to ponder why Americans seem so angry this election season. Reporters drop themselves into primary states like Marlin Perkins in a Mutual of Omaha’s Wild Kingdom episode, trying to decipher these strange creatures who are so frustrated with the U.S. economy that they’d vote for a faux-populist billionaire or an avowed socialist. Why isn’t everybody satisfied with a status quo of slow-yet-steady economic recovery and a record number of consecutive months of private sector job growth?
But The New York Times’s Neil Irwin might have found an answer last week, when he pointed to eye-opening new research from Princeton’s Alan Krueger and Harvard’s Lawrence Katz on Americans in alternative work arrangements, which they defined as “temporary help agency workers, on-call workers, contract workers, and independent contractors or freelancers.” This cohort of the workforce grew from 10.1 percent in 2005 to 15.8 percent at the end of 2015, representing an increase of 9.4 million workers. That’s all of the growth in the labor market over the past decade.
It’s small wonder that most of the media and the politicians can’t look beyond raw numbers and actually investigate why people aren’t satisfied. That would take actual work. But let’s be clear, there are actual solutions here that don’t have to include completely dismantling the current employment system.
The answer, which Hill endorses in his book, is to make these workplace benefits simultaneously universal and portable. Employers shouldn’t have the opportunity to shift responsibilities to workers simply because of their job classifications. Workers should be able to participate in multi-employer benefit plans, similar to those that already exist for construction trades, which go with them from job to job.
These operate like insurance plans: Workers pay in a small amount in every week and get health and pension benefits, disability or unemployment insurance, even sick and vacation days. But to make them work, it’s essential that employers also have to contribute a matching portion of a worker’s salary into the plans, regardless of whether the employee is on staff or a contract worker. This way, independent contractors receive the same protections and benefits for doing mostly the same work as everybody else.
This would take the safety net for individuals out of the discretion of the employer, and end the discrimination against the 1099 worker. It could also lead to federalizing the safety net in ways that would widen the pool of workers covered, and lead to greater efficiencies. You could imagine multi-employer plans competing with one another to attract workers, offering extra perks like job training and apprenticeships, childcare, or other worker-linked benefits.
This is utterly sensible. Yet I think it is telling that such common-sense solutions to these problems are not part of the Democratic primary. I think that many Americans know they are unhappy. They have found a couple of candidates who give voice to that unhappiness. Trump allows them to embrace their racism and resentments, Sanders appeals to those who actually want to make the lives of people better. But we have been slapped in the face by a capitalism we thought would work for us and maybe worked for our parents but certainly is not actually working for half the population or more. We are at the stage where concrete solutions are still percolating up through the system. Some are closer to current policy possibilities like this, others a bit farther like my ideas to deal with unrestrained capital mobility. But we need to be prioritizing real, tangible solutions to economic crises of the New Gilded Age. This is the sort of program that Clinton or Sanders should be outlining in detail. The intellectual legwork and research has been done and is being done. This is sensible and real. Let’s support it.