By Manon DeFelice
It’s happening in front of our eyes: The workforce is shifting. More people are working independently than ever before, and we’re moving toward a future in which independent workers will outnumbersalaried workers. This is good news for people who value flexibility and autonomy in the workplace. But it also comes with a cost: the lack of a social safety net in the form of benefits like unemployment, health care, retirement funds and disability insurance.
Thankfully, there are signs that change is coming; people are realizing that something must be done to protect an independent workforce that’s growing fast . According to the 2017 “Freelancing in America” survey (commissioned by the Freelancers Union and Upwork), 57.3 million Americans work freelance. The same survey projects that by 2027, the majority of the U.S. workforce will be working independently. That means more workers will be flying solo without employer-sponsored benefits like skills training, paid leave and workers’ compensation.
Two recent changes point to a shift in thinking about benefits for independent workers. In January 2018, several of the largest American companies (including Walmart and Starbucks) announced that they would offer paid parental leave not just to full-time employees, but also to hourly workers. Additionally, legislation was proposed in 2017 in the U.S. Senate and House that would test-drive the development of a portable benefits package for the independent workforce.
Paid Parental Leave: Better For Families
The U.S. is the only industrialized country in the world that does not mandate paid family leave, so the creation of new paid-leave policies at some of the nation’s biggest companies marks a significant change. IBM rolled out one of the most generous policies, giving both salaried and hourly-wage mothers 20 weeks of paid parental leave after the birth or adoption of a child, and giving the other parent 12 weeks of paid leave. Walmart and Wells Fargo both offer 16 weeks of paid leave to mothers; again, the policy applies equally to salaried and hourly workers.
The new policies mark a win for families across the economic spectrum because it’s not just salaried parents who need paid leave. The upshot of the family-friendly policies? We’ll have less economic insecurity among hourly workers, who make up 59%of the American workforce.
Change at the state level is happening too: In January, New York became the fourth state in the nation to offer paid family leave. Not just for new parents, the law also mandates employers to provide paid leave for caregivers of a family member with a serious health condition, or to help relieve pressures when a family member is called to active military duty abroad.
Portable Benefit Models: A Good Idea
The shift is happening on the federal level too. In May 2017, U.S. Senator Mark Warner (D-VA) and U.S. Representative Suzan DelBene (D-WA) introduced legislation to test-drive portable benefit models for independent workers (such as contractors, temporary workers and the self-employed). The legislation would establish a $20 million grant to incentivize states, localities and nonprofits to create portable benefit models offering social insurance protections that independent workers could take with them from job to job, or from gig to gig.
Such models would not only cover paid leave but also the broad range of benefits enjoyed by salaried workers, such as unemployment insurance, health care, disability insurance, skills training, tax withholding and tax-advantaged retirement savings.
“The nature of work is changing rapidly, but our policies largely remain tied to a 20th century model of traditional full-time employment,” Sen. Warner says on the proposed legislation’s home page. “As more and more Americans engage in part-time, contract or other alternative work arrangements, it’s increasingly important that we provide them with an ability to access more flexible, portable benefits that they can carry with them to multiple jobs across a day, a year, and even a career.”
It is this kind of forward thinking that we need to successfully enter the future of work, a future that is in many ways already here. As the independent workforce grows to surpass the salaried workforce, its success will be increasingly tied to the strength of the entire economy.
In that sense—independent workers or not—we can all benefit from having benefits.