U.S. workers, whether they be full-time or part-time employees or gig workers, deserve a better benefit structure, a new report says — particularly since the very nature of work is undergoing tremendous change.

That’s according to a report on Ozy, which points out that while protections under the Fair Labor Standards Act and benefits such as health care and retirement accounts are tied to conventional jobs—W-2 jobs—the gig economy, growing by leaps and bounds, provides none of these.

Even part-time workers have some protections under the FLSA, the piece points out, while entrepreneurs and gig workers have no underpinnings of any kind to protect them.

The author writes of a previous report on the gig economy, in which she found that it “felt like the tale of two economies—one where flexibility, autonomy and diverse sources of income set workers free; and another where income instability, uncertainty and a lack of benefits generate a lot of stress.”

But as work changes, workers move (or are pushed) away from an employee-status job; although W-2 jobs that come with benefits are an outgrowth of World War II—they were a means of attracting workers price controls restricted other methods—they provide the stability that workers need, including the risk-takers who might go on to launch new businesses or invent new products.

The full-time W-2 job is (or was) a prize indeed, bringing employees more benefits from U.S. labor policies than any other class of worker, the report says: “They get unemployment insurance, workers’ compensation and legal protections under the FLSA, as well as benefits like health care.”

Part-timers generally get minimum wage and some legal protections, but no benefits or unemployment insurance, while the self-employed—independent contractors who file a 1099—get nothing.

The article cites Diane Mulcahy, author of The Gig Economy, as pointing out that “[e]ssentially, the U.S. labor market structure penalizes anyone who’s not an employee in a full-time job.” Mulcahy is quoted saying, “For a country that is so enamored with the entrepreneur, we have a perverse way of supporting that.”

And in the wake of the 2008 recession, the jobs that came back were more 1099 than W-2, meaning that all this “fantastic” job growth we’ve been experiencing hasn’t really been all that fantastic at all.

“So why,” the author asks, “are we still tying benefits and protections to employee status when the whole notion of job security is changing?”

For starters, the report suggests that all workers should be covered by the FLSA, which comes with worker’s compensation, unemployment insurance and the shield of law against discrimination and sexual harassment. “The idea that you need to work a certain amount of hours for one company to earn those rights is ludicrous,” the author asserts.

Another blatantly unfair policy is the requirement that the self-employed must foot the entire bill for Social Security and Medicare. Ben Zipperer, an economist at the Economic Policy Institute, is quoted as saying of the policy, “That raises expenses in a way we often overlook.”

And then there’s health care. Roy Bahat, head of Bloomberg Beta, a venture capital firm that invests in the future of work, says in the report that every worker focus group they met with had the same top answer when asked what the government could do for them: “Pay for my health care.” Bahat is quoted saying, “Truck drivers in Ohio were actually saying things like, ‘If Canada does it, why can’t we?’”

Bahat also points out that an underpinning of benefits could spur innovation in the workplace.

“Workers crave stability,” Bahat says in the report, adding, “It’s the platform that risk-taking comes from. We tout the gig economy as freedom, and yet, paradoxically, people tend to take risks when they feel safe enough to take them.”

Instant Insights /

Does the U.S. penalize entrepreneurs?

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