Both the definition and the precise domain of economics are subjects of controversy within philosophy of economics. At first glance, the difficulties in defining economics may not appear serious. Economics is, after all, concerned with aspects of the production, exchange, distribution, and consumption of commodities and services.
Organizing is not easy in the twenty-first century, in any kind of workplace. But the history of the social contract suggests that organizing can make benefits and stability available to all workers, regardless of their status under employment law.
In the patchwork economy, organizers have shown tremendous creativity in finding ways to provide tangible benefits to workers, win campaigns, and gain leverage.
Apart from that, these organizing efforts help patchwork economy workers see themselves as part of a larger Eonomics problem set 1, with shared interests. That said, it remains to be seen whether organizing groups can successfully make job stability a significant priority given the centrality of flexibility in the business models of patchwork economy companies.
Alternative Business Models A second way that workers can obtain more of a voice as well as better working conditions within their companies is if the companies themselves consciously choose a structure that makes that Eonomics problem set 1.
While there has been much talk about the importance of the flexibility inherent in using workers in small startup companies and, perhaps, pressure from investors to maintain that flexibilitysome high-profile companies in the gig economy, like Instacarthave converted at least some of their independent contractors to W-2 employees.
That said, when companies that abide by such principles succeed by Silicon Valley standards, it helps to buttress the idea that rapid business growth and good working conditions are compatible.
The issues raised by the changing economy may go well beyond such basic questions as whether workers should be classified as employees, or companies should abide by certain standards. Some economists predict that technology, including but not limited to robotics, will continue to ensure that the returns to labor will fall, while the returns to capital—invested in automation—will rise.
This phenomenon extends well beyond the gig economy. The co-op movement has not seen much growth in recent years, but perhaps the increased growth of the patchwork economy will be a reason for that to shift.
Employee Stock Ownership Plans ESOPs are the best known model of worker ownership, and enjoyed a renewed popularity after the crash.
Broadening the ownership of capital is a massive task that does not invite easy answers, but may require creative thinking about corporate law and corporate governance. Legislative and Legal Solutions Another set of solutions to the problems of the patchwork economy are legal and legislative—ranging from lawsuits and new legal frameworks about the proper classification of employees and independent contractors, to laws designed to provide non-employees with benefits or protections.
Enforcement and Non-Enforcement of Employment Laws The rising number of people with nontraditional work relationships has tested the boundaries of existing employment law, in ways that can create risk for workers.
Some of the risks inherent in being an independent contractor can be addressed through legislation targeting those risks in particular. While wage theft is a problem in many workplaces, for example, some freelancers—especially those who regularly work without contracts—have found it difficult to ensure that they get paid afterward.
In turn, the companies have generally argued that the drivers choose this job in no small part because of the freedom it offers them—including the ability to choose their hours and, implicitly, the freedom to work for both Lyft and Uber at the same time —and that this flexibility would be lost if drivers were forced into a traditional employment relationship.
In at least three individual cases, various California agencies have ruled that an Uber driver was an employeebut these cases apply only to the workers in question and have no precedential value.
Likewise, there will also always be some workers misclassified as independent contractors who deserve to be treated appropriately as employees. The important question is how to provide workers who find themselves outside the traditional employer-employee relationship with an appropriate safety net.
Again, it is important to reiterate here that potential misclassification is not only a gig economy issue—it is a much broader patchwork economy issue. Indeed, as the AFL-CIO notes in its statement about gig economy workers, the debate about whether gig economy workers are employees is similar to the debate about FedEx workers; FedEx has historically classified its drivers as independent contractors illegally, in the opinion of the AFL-CIOwhile its competitor UPS has drivers that are unionized W-2 employees.
Indeed, some employers, for their part, have been frustrated with the ambiguity in employment law, fearing that they cannot provide benefits, education, and training for their workforce without increasing their litigation risk in misclassification lawsuits.
As a result, a number of patchwork economy companies have expressed a desire for a safe harbor or other mechanism that would let them provide certain benefits to their workers without any effect on classification lawsuits.
One way to address that is to use legislation to create a new category of workers—not quite independent contractors but also not W-2 employees.
People have continued to debate what kinds of protections should be included for a third category of worker 48 and whether the gig economy is still evolving so rapidly that it would be premature to legislate in this area.
It is, of course, worth noting that even without creating a new, third category of worker, legislators could theoretically require that independent contractors or certain independent contractors be provided with specific benefits or protections for example, tax withholding or pre-tax benefit contributions.This Economic Vocabulary (set 2) Fact Cards is perfect to practice economics skills.
Your elementary grade students will love this Economic Vocabulary (set 2) Fact Cards. Four cards (business, consumer, producer, product) plus quiz.
Colorful illustrations. Solving dynamic general equilibrium models using a second-order approximation to the policy function Stephanie Schmitt-Groh+ea;∗, Mart+n Uribe b aDepartment of Economics, Rutgers University, 75 Hamilton Street, New Brunswick, NJ , USA bDepartment of Economics, University of Pennsylvania, Locust Walk, Philadelphia PA , USA Abstract.
economics. Whether you’re studying macroeconomics, microeconomics, or just want to understand how economies work, we can help you make sense of dollars. Our study guides are available online and in book form at benjaminpohle.com We call this broader set of work experiences the “patchwork economy” 1 —a patchwork of jobs and a patchwork of protections—encompassing gig workers and non-gig workers alike, all of whom struggle with gaps in the safety net in various ways.
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