A Missed Opportunity: Worker Voice in Portable Benefits

Published June 1st, 2017 -  - 06.01.174


Last week, Senator Mark Warner and Rep. Suzan DelBene introduced the Portable Benefits for Independent Workers Pilot Program Act.  The Act would authorize $20 million for competitive grants to states, local governments and nonprofits to fund pilot projects around portable benefits. The program aims to provide wide latitude for grantees to experiment with innovative new models of providing benefits for workers outside of “traditional full-time employment.”  The only requirements seem to be that the pilot programs: (1) provide benefits that are usually available to “traditional full-time employees,” but are not retirement benefits; (2) allow accumulated benefits to be portable from one job to another; (3) accept contributions from more than one job; and (4) be scalable to a national program. With this legislation, Senator Warner demonstrates again why he is considered a Congressional leader in thinking seriously about the policy implications of the gig economy.

The proposal is a serious attempt to address the needs of the growing number of American workers who lack even the most basic employment benefits — workers comp, unemployment insurance and paid leave. Too many workers are rendered economically vulnerable, not only because of the precarious nature of their paychecks, but because of lack of access to the safety net to catch them when those paychecks diminish or stop coming. New ways of accessing traditional safety net benefits would be a step up for these workers.

Senator Warner’s proposal leaves open many important questions about the optimal features of a portable benefits program – who pays, how much should contributions be, and how can we prevent such programs from encouraging the misclassification of employees as independent contractors.  Before we move a major national program, we will have to answer these important questions.  I can see the value in Senator Warner’s proposal as a vehicle for moving those debates forward.

My disappointment in Senator Warner’s proposal, however, comes from the missed opportunity in its basic structure.  We are at a moment when gig workers – and, indeed, our economy writ large – need a fundamentally new infrastructure on which to rebuild the middle class.  Yet, Senator Warner’s bill constitutes a path to nothing more than a minimal safety net.  We should aspire to more than this.  We need to do more than stopping the free fall to destitution that workers outside of traditional employment face as a result of their legal outsider status.

The problem with the Warner bill, moreover, goes deeper than its provision of only minimal benefits.  The fundamental problem with Sen. Warner’s bill is that replicating for gig workers the social safety net benefits available to traditional employees misses the historical context in which employees won those benefits in the first place.  In particular, workers have won benefits and income supports through collective action – remember, the labor movement are the folks that brought you the weekend and minimum wages and higher benefit levels and occupational safety protections and so many of the other benefits that gig workers lack.  Thus, the most important “benefit” that most gig workers lack is the legal protection for and viable means of exercising collective power.  Many gig workers are alone in almost every way – physically, legally, and organizationally separated from their coworkers.  This isolation is a big part of what makes them so economically vulnerable.  If we don’t provide gig workers with protection for collective action, we fail to give them the ability to secure for themselves the benefits they rightly deserve.

One way to give gig workers the power that comes from collective action would be to build into portable benefits systems mechanisms that ensure worker voice.  As Shayna Strom and Mark Schmitt point out in their Century Foundation paper, “Protecting Workers in a Patchwork Economy,” the choice of who administers these benefits programs will make a big difference in whether they serve only narrow economic needs or a broader social purpose — if the programs ensure workers a role in the administration of programs, they are much more likely to end up serving the broader purpose of rebuilding institutions of worker power.

It is surprising that Senator Warner’s bill misses this opportunity to nudge the portable benefits debate in this direction.  Senator Warner serves as the co-chair of the Aspen Institute’s Future of Work Initiative, which recently put out a proposal that seems to have served as a model for Senator Warner’s legislation.  That proposal, however, included a recommendation that programs “should encourage models that allow workers to have a voice in the administration of the benefits (e.g. a certain share of the board members of the benefit fund could be elected by the beneficiaries themselves).”  I would have liked to have seen Senator Warner’s proposal upgrade that recommendation to a requirement.  Instead, it disappeared.  I hope that if Senator Warner’s proposal moves forward or anyone else’s portable benefits proposal gains steam, we will make empowering workers – gig or otherwise – a fundamental goal of the exercise.

 

 

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