The on-demand economy and its impact on existing business models, the tax and regulatory systems at all levels of governments and electoral politics fascinate me. I can’t get enough of it. Amazon, Alibaba, Uber and Airbnb are often called “disruptors” because of how rapidly – and likely permanently – they are changing the marketplaces in which they operate. Potentially, the even bigger impact that they will have is disrupting and reshaping a significant portion of the workforce and existing wage and benefit structures.
The future of employee benefits is a good example of this. The on-demand economy is as indifferent to committing to a full-time workforce as millennials are to committing to long-term tenures with employers. Both sides of the ledger are becoming transactional, short-term and desirous of more flexibility. There has always been a great deal of consensus on the right that benefits should not be tied to employers. Now, there is similar growing consensus on the left that benefit portability is key to addressing worker needs in the new economy.
None other than David Rolf, the godfather of the Fight for $15 campaign, is becoming a vocal advocate of portable benefits and de-linking full-time employment from benefits. He argues that the average worker in the emerging on-demand economy may hold any number of part-time jobs both by design of the employer community and the need for flexibility. He may work a few shifts a week at a restaurant, pick up some odd jobs through TaskRabbit, drive a couple of shifts a week with Uber and possibly be going to school. However, under the current system, he will never accrue enough full-time hours in any one place to qualify for benefits – either health insurance or sick leave. But if he accrues benefits per hour worked, paid for by some level of employer assessment or tax (that likely would be largely tax deductible) he can accrue the benefit level he needs.
Whether that approach makes sense or is economically plausible is another discussion. I don’t pretend to have the expertise to break it down and know whether it can work. Yet, one thing is clear – the conversation is coming. Like it or not, it is coming because it has to. It has nowhere else to go. It’s in sync with the reality that the part-time/independent contractor genie is never going to go back in the bottle. It’s also in sync with the needs of workers which makes it socially viable and thus, eventually politically viable. Most importantly, it’s relevant because it is intensely aware of the emerging forces shaping our economy and our workforce. Rightly or wrongly, it is seeking solutions.
The only question in my mind is whether the restaurant industry will choose to be relevant in the conversation. Will we seize the opportunity to get out of the reputational quicksand that we seem to so enjoy swimming in and potentially own a conversation for once before it owns us? Will we accept that it’s coming and see the opportunity to jump in and create a system that actually helps us compete for talent and be an employer of choice for a new generation of workers raised in the on-demand economy?
To be clear, I’m not advocating the policy that Rolf and his colleagues are proposing one way or the other. However, I am advocating that it’s an opportunity to thoughtfully engage in an emerging and pressing national challenge. I am advocating that we acknowledge this is happening and that we need to be relevant in the process of addressing it. Relevance will occur when the sensible center of the industry decides that shaping the future model of benefits is a conversation worth engaging in.
This is a conversation, if properly approached, that doesn’t reflexively make us the boogeyman or diminish us compared to other sectors of the economy. It can highlight our contribution. We could have the debate on our terms for once because we always seem to lose when someone else is dictating the conversation. Above all, one thing is clear – the conversation is coming. What’s less clear is whether the industry decides to jump behind the wheel and drive for once.
Joe Kefauver is managing partner of Align Public Strategies, a full service public affairs and creative firm that helps corporate brands, governments and nonprofits navigate the outside world and inform their internal decision-making. For more information, go to AlignPublicStrategies.com.
