With the global economy on the brink of recession, the Biden administration continues to tout its laser focus on helping Americans ease the cost of living. Yet the Federal Trade Commission recently went out of its way (and its historical purview) to issue a policy statement that undermines gig workers’ growing role in the economy.
The FTC is missing the mark for all the administration’s talk about standing up for low-income and middle-class Americans. The agency’s statement fails to recognize that millions of Americans rely on gig work for additional income during a time of rising costs and that voters support gig workers’ preference for these flexible job opportunities.
The FTC’s actions could threaten the very flexibility that allows workers with family obligations, disabled and chronically ill workers, and anyone else who wants the independence afforded by gig work the ability to earn a steady income. Being an independent contractor is precisely what allows workers to set their own schedules, switch between flexible job opportunities and customize their work to match their needs. Gig workers aren’t interested in changing that— and they’ve told us that repeatedly.
Take Californians’ decisive vote on Prop 22, a ballot initiative that protected app-based workers’ status as independent contractors after state lawmakers tried to reclassify them. While the landslide passage of Prop 22 showed widespread support for gig work, analysis of the statewide vote found even deeper support among communities of color. In fact, Black and Hispanic voters, and women were more likely to support the initiative to allow Lyft and Uber drivers to remain independent contractors.
Washington state legislators also voted to keep those drivers as independent contractors while bolstering their access to needed benefits like paid sick time. This demonstrates the need for nuance in this type of policy. That’s something the FTC’s position lacks.
Hobbling gig work would have adverse ripple effects across the economy when the economic outlook for so many Americans is fragile. Research indicates a national rule reclassifying independent contractors as full-time employees could result in a loss of direct income for 3.4 million American workers and cost the nation’s most vulnerable communities more than $31 billion. This could single-handedly force the most significant loss of work and wages we’ve seen since the pandemic’s start.
Finally, a common theme from the FTC is that independent contracting strips workers of bargaining power. But the reality for workers is the opposite.
When working with Company A or Company B, gig workers often opt for Option C — all of the above. Driver multi-homing between Uber, Lyft, Doordash, Instacart and more is common, and drivers alternate between the platforms within the same hour or day. This flexibility keeps the market from concentrating and requires companies to provide enticing benefits for drivers or risk losing them to competitors.
If you ask gig economy workers, they want to pair flexibility with good pay and benefits. Trying to conform new, innovative job opportunities to a traditional workforce model would be a recipe for disaster, particularly when a recession looms. The FTC needs to step back and stop telling workers what they need and listen to them instead.