Hillary Clinton takes aim at the sharing economy
Hillary Clinton is taking on the sharing economy.
Laying out her economic policies in a speech today at The New School in Manhattan, the Democratic frontrunner for president called out what she called the 鈥済ig economy鈥� 鈥� the contractor-based business model popularized by companies like ride-sharing giant Uber 鈥� for repressing middle class wages and stifling national economic growth.
鈥淢any Americans are making extra money renting out a spare room, designing websites, selling products they design themselves at home, or even driving their own car,鈥� she said, . 鈥淭his 鈥榦n demand鈥� or so-called 鈥榞ig economy鈥� is creating exciting opportunities and unleashing innovation, but it鈥檚 also raising hard questions about workplace protections and what a good job will look like in the future.鈥�
Mrs. Clinton plans to make raising middle class income a central feature of her campaign. She added in her speech that she plans to 鈥渃rack down on bosses who exploit employees by misclassifying them as contractors or even steal their wages.鈥� She cited the need for paid family leave, earned sick days, fair pay, and fair scheduling 鈥� all workplace protections that contractors don鈥檛 receive.
While she didn鈥檛 mention Uber by name 鈥� or it鈥檚 national ride-share competitor, Lyft 鈥� the two companies are at heart of recent controversies over contractor-based business models, along with the home-sharing business Airbnb.聽
The sharing economy has exploded in recent years, now claiming some 10,000 different companies,聽The Monitor's Gloria Goodale reported聽earlier this year.
Jonathan Askin, a professor at Brooklyn Law School, told The Monitor in an email then that 鈥渋t鈥檚 ironic that we call the new concept the 鈥榮haring economy,鈥� when in fact we are creating the purest form of ferocious, self-empowering capitalism.鈥�
鈥淭his doesn鈥檛 sound like the 鈥榮haring economy,鈥� it sounds like the 鈥榮elfish鈥� economy,鈥� he added.
Opponents of the sharing economy argue that by only offering contractor positions that generally lack the benefits, advancement opportunities, and job security of full-time positions, they are preventing the country from building sustainable wage growth. As a consequence, those contractors can鈥檛 rely on future income to make major investments like buying a home or putting a child through college. They are also more vulnerable to crippling economic events like a sudden, serious illness or injury.聽
A 聽from Edelman Berland, an independent research firm, for the Freelancers Union found that more than 1 in 3 American workers (an estimated 53 million people) are freelancers.
The number of lower-wage jobs are also increasing as the amount of mid- and higher-wage jobs decreases, according to the National Employment Law Project. Lower wage jobs have increased by 2.3 million since the Recession, according聽, while there are 1.2 million fewer mid- and higher-wage jobs.
Uber is in the midst of challenging a class-action lawsuit in the Northern California district court seeking to label all of its contractors full-time employees.聽The ride-share company is countering that most of its drivers prefer the independence of working as independent contractors.
鈥淲e have driver after driver explaining their unique circumstances, why freedom and autonomy are so important to them in their own words, in sworn testimony,鈥� said Uber鈥檚 lawyer, Ted Boutrous, Jr., in with TechCrunch.
鈥淎ll of that goes right to the heart of our argument why this can鈥檛 be a class,鈥� he added. 鈥淔or there to be a class everyone must be similarly situated, they must have suffered the same injuries, allegedly. That is the opposite of what we have here.鈥�
Indeed Paul Osterman, a professor at the MIT Sloan School of Management, wrote in an 聽that if the jobs 鈥渕eet people鈥檚 needs for flexible employment and provide learning real skills and pay decent wages, then they are certainly a positive for the economy.鈥�
However, Dr. Osterman added, if the jobs 鈥渞esult from misclassification to avoid paying benefits or employment taxes, then they are an emerging problem and a source of worsening job quality.鈥�
