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Why the gig economy provides a revenue source that’s ‘lucrative’ for individuals

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Florida city ends anti-sagging saga with move to allow low trousers

* Obama once admonished ‘brothers [to] pull up their pants’ * Opa-locka commissioners cite equality as they withdraw banIt was a fashion that offended those with delicate sensibilities, and even caused Barack Obama to wade in.“Brothers should pull up their pants,” the former president once said of sagging – the practice of wearing trousers so low around the waist that most of the underwear is exposed.Now a Florida city that made headlines by passing an ordinance against the trend in 2007, imposing a fine of up to $500 on anybody caught low-riding within its boundaries, appears no longer to be outraged.In a 4-1 vote, commissioners in Opa-locka acted to strike the original regulation, and a 2013 amendment extending the ban to women, from its statute book. Officials in the majority Black city said the move was meant to increase equality.“I was never in support of it, even as a resident,” vice-mayor Chris Davis, one of five city commissioners who are all Black, told the Miami Herald. “I felt it disproportionately affected a certain segment of our population, which is young, African American men.”Sagging, which has its roots in New York hip-hop culture of the early 1990s, spread around the country into the early 2000s. School districts passed rules against it, the Louisiana town of Delcambre branded it indecent exposure and in Dallas, Texas, officials went so far as to launch an anti-sagging billboard campaign.In 2011, Billie Joe Armstrong, the lead singer of the band Green Day, was thrown off a flight from Oakland to Burbank when attendants deemed his trousers were hanging too low.The American Civil Liberties Union criticised the push for regulation, denouncing the original Opa-locka ordinance as “a ridiculous waste of public resources” – a position the city’s current leaders have come to embrace.At a meeting last week it was decided that tighter budgets in the coronavirus era, married with a lack of enthusiasm to enforce the ordinance, meant it was time for it to go.“What better climate to do it in than the one that’s going on around the country centred on police reform, and just looking at ways that we can make our public services more equitable,” Davis told the Herald.Once the commission ratifies its preliminary vote, work crews will remove fading “No Ifs, Ands or Butts…” signs from parks around the city.The one commissioner to vote against the repeal, Alvin Burke, said he believed the law was intended to “uplift” young Black men, not target them.“If y’all see fit to do away with it and just continue to let our young Black men walk around into our buildings like that, then so be it,” he said.

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Deconstructing the gig economy | Yield PRO

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With control of Congress and the White House, Democrats are making labor policy one of their first priorities. Ironically enough, that’s actually bad news for independent contractors and gig economy workers across the country.

The legislation at the core of their agenda is the PRO Act, which Democrats just re-introduced with sponsors including Speaker of the House Nancy Pelosi and Senate Majority leader Chuck Schumer. Among many other things, the bill would severely restrict the legal definition of independent contractors in a way that would largely end the gig economy as we know it.

The legislators’ stated intention is to protect workers and bolster their rights under law. Through the reclassification of independent contractors, Democrats hope to force gig economy companies to hire workers as full employees and thus provide them the accompanying salaries and benefits.

“The men and women of labor are the backbone of our economy and the foundation of our strength,” Pelosi said. “With American workers seeing their lives and livelihoods devastated by the ongoing pandemic and economic crisis, the reintroduction of the PRO Act is more important than ever.

“I am proud to join my colleagues in introducing this legislation to put more money in the pockets of hard-working Americans, creating a foundation that provides livable wages to our families,” Schumer added.

The context here is crucial, because this legislation isn’t coming out of nowhere. It’s modeled after a similar but highly controversial California bill, AB 5, that likewise forced the reclassification of independent contractors.

President Biden supported AB 5 at the time, and is on the record supporting the PRO Act, too. And now that Democrats control Congress, it could pass the House and find support from the White House.

The only question would be whether it could make it through the closely-divided Senate.

It’s worth examining the sweeping impact this legislation would have on the economy.

Millions of jobs outlawed with the stroke of the pen

The PRO Act would outlaw millions of existing jobs with the stroke of the president’s pen.

After all, it would make illegal any independent contractor arrangement where the worker provides services within “the usual course of the business of the employer,” meaning jobs like Uber drivers, Doordash drivers, Instacart grocery deliverers, and more could not exist as we know them. There are roughly 10.6 million independent contractors in the US, accounting for 6.9 percent of all employment. Some of these workers might not be affected by the law and some others may get hired on as full-time as a result. But there’s little doubt that millions more would find themselves unemployed.

For example, Uber alone employs more than 1 million drivers in the US. It’s nearly certain they would all lose their jobs under the PRO Act, because Uber already runs a loss, not a profit, and adding an independent contractor as a full staff member counts roughly $3,625 per driver. Basic math tells you that most of these workers would end up being let go; Uber could even go under. After all, the California legislation nearly forced Uber and Lyft to shut down operations in the Golden State altogether until a last-minute ballot referendum modified the law.

Uber is just one company and one example. But freelance workers such as journalists, photographers, florists, musicians and more all lost work in California under legislation similar to the PRO Act.

“Transcription allowed me to stay at home, be my own boss, and control my workflow and whom I work with,” 72-year-old transcriptionist Dori Lehner told the Independent Women’s Forum. “I only have one direct client now, and I only get work when they have it. My income has dropped down to a quarter of what it was before AB5.”

“A mom-and-pop studio can’t hire me and put me on payroll for a one or two hour lecture that I do once per month,” part-time yoga instructor Jennifer O’Connell said.

“That’s wiped out so much work,” she added, explaining that she’s lost roughly three-fourths of her freelance income.

The authors of AB 5 and the PRO Act likely earnestly believed they were going to help workers like Lehner and O’Connell. But the ugly results of their policy naivete will leave many like them unemployed instead.

Unintended consequences always plague big government regulation

The lesson here is clear. The Democrats’ latest labor proposal is a case study in unintended consequences, which inevitably plague big-government interventions into a vast and diverse economy.

“Economic policies need to be analyzed in terms of the incentives they create, rather than the hopes that inspired them,” famed free-market economist Thomas Sowell wrote. “The programs that are being labeled for the poor, for the needy, almost always have effects exactly the opposite of those which their well-intentioned sponsors hope them to have.”

“It’s not enough… to endorse legislation that has a nice title and promises to do something good,” economist Robert P. Murphy wrote. “People need to think through the full consequences of a policy, because often it will lead to a cure worse than the disease.”

Nancy Pelosi and Chuck Schumer clearly haven’t thought this through. If the PRO Act becomes law, it won’t help independent workers—it will eliminate their jobs or strip them of the flexibility that attracted them to the gig economy in the first place.


Source Brad Polumbo, fee.org

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EU launches gig economy consultation

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The European Commission has launched a six-week consultation with unions and employer bodies on how to improve working conditions for digital platform workers.

On 24 February 2021, the European Commission launched the first phase of its consultation on working conditions for digital platform workers in the gig economy.

The consultation comes as the COVID-19 crisis has accelerated the digital transformation of the European economy and the expansion of the platform model: 11% of the EU workforce say they have already provided services through a platform. It will tackle particular areas of concern around health and safety and limited access to social protection and benefits for platform workers.

European trade unions and employers’ bodies will be asked to give their views on the following questions:

  • Do you consider that the European Commission has correctly and sufficiently identified the issues and the possible areas for EU action?
  • Do you consider that EU action is needed to effectively address the identified issues and achieve the objectives presented?
  • If so, should the action cover all people working in platforms, whether workers or self-employed? Should it focus on specific types of digital labour platforms, and if yes which ones?
  • If EU action is deemed necessary, what rights and obligations should be included in that action? Do the objectives presented in this document present a comprehensive overview of actions needed?
  • Would you consider initiating a dialogue under Article 155 TFEU on any of the issues identified in this consultation?

(Article 155 of the Treaty on the Functioning of the European Union provides for dialogue between employers and labour unions or representatives)

The consultation will be in two stages, and the results will feed into the legislative initiative on platform work which the EU has promised by the end of 2021.

The consultation document is available here.

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EU takes step to help ‘gig’ economy workers

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Belgium: The European Commission launched a public consultation to look into the legal employment status and conditions of gig economy workers (a labour market characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs).

It is the bloc’s first step aimed at improving the rights of such workers, who work through digital labour platforms, such as ride-hailing or food-delivery apps.

Uber, Just Eat and Deliveroo are among some of the digital platforms used by gig economy workers in Europe.

Such platforms have been particularly in-demand during the coronavirus pandemic, as consumers turned online during lockdowns across the EU.

The gig economy debate
The gig economy allows for flexible working conditions, as well as “job opportunities and additional revenue, including for people who might find it more difficult to enter the traditional labour market,” the commission said on Wednesday.

But companies working in the sector are frequently accused of taking advantage of the self-employed status of workers to avoid covering social security payments and other benefits.

Courts in the UK and Spain have already overruled “self-employed” claims from some companies in the sector.
On Wednesday, Italy followed suit.
Prosecutors told Uber Eats, Glovo, Just Eat and Deliveroo in Italy their couriers were employees and not independent workers.

The companies were fined €733 million ($892 million) for a breach of labour safety rules. The more than 60,000 couriers must be offered non-permanent contracts with fixed pay, the Milan prosecutors’ office said in a statement.

What will the EU consultation do?
The first phase of the EU initiative will see six-week consultations with trade unions and employer organisations about their views on improving working conditions.
If labour and business representatives choose not to enter negotiations on the issue, there will be a second round of consultations on possible measures the EU could take.
If the two sides still do not come to the table after that, then the commission said it will “put forward an initiative by the end of the year.”   
Uber said it plans to work with policymakers and social groups on the proposal.       

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