The End of the Employment Relationship? Research Update

Want a ride from the airport? There’s an app for that. Someone to visit with your elderly parent? There’s an app. And so on. I am collecting more than 1,000 court cases since 2000 involving claims by workers that they were misclassified as independent contractors—drivers, cable installers, security officers, exotic dancers, janitors … and others. Early results show that workers win most of these lawsuits—meaning they must be paid for overtime, minimum wages, out-of-pocket expenses (e.g., gas money for drivers). But these outcomes don’t seem to be changing the inexorable drift away from the employment relationship to app-driven “project” work. Downsides? 1. These workers are on their own for Social Security taxes—no employer contribution. Expect even more under-funded retirements. 2. No workers comp if an individual is hurt while doing her job. 3. No employer-sponsored health insurance. 4. No possibility to form a union. And then there are less visible effects. We will have fewer lawyers, accountants, doctors, nurses, carpenters, plumbers, electricians and other craftspeople and professionals who are selected, trained, weeded-out, promoted, and socialized by an organization. Instead, various crafts, professions, and occupations will be reduced to one-off exchanges, conducted on our cell phones. The employment relationship is not part of the law of nature. My hunch is that employment will recede along the lines of unions. The question is: Will we, as a society, recognize the long-term damage that results from a casual form of assigning work?