Fact of the Week: Sixteen Percent of Americans Have Worked for an Online Platform App

Source: Monica Anderson, et al., “The State of Gig Work in 2021” (Pew Research Center, December 8, 2021).

Commentary: Growth of the gig economy accelerated thanks to the rise of apps serving as platforms to transact labor. Gig workers can decide when and where they work due to their employment being defined as independent contracts. While these jobs have their advantages in flexibility of schedules and low barriers to entry, the short-term and nonbinding nature of jobs through online app platforms don’t often see benefits generally afforded full-time employees such as health care, paid leave, and minimum wage.

As of August 2021, a Pew Research Center survey of more than 10,000 Americans found that 16 percent of Americans at some point have earned money via an online platform app, with adults under 30, Hispanic adults, and those with lower incomes especially likely to do these jobs. Yet U.S. labor law doesn’t yet know what to do with people who make all or part of their living on gig-enabling Internet platforms like Uber or TaskRabbit. In a 2016 report, ITIF described three possible paths forward in reforming labor law for the gig economy:

1. Create a new category of worker, between full-employee and independent contractor. While this would be an improvement on the current system, it risks replacing two rigid categories with three rigid categories, which still may not provide an optimal fit for all work arrangements.
2. Congress could revisit each of the country’s major labor laws and carefully tailor them to achieve their specific goals. This would be ideal, but it would involve a long and difficult political process.
3. Draft a carve-out for workers who depend on Internet platforms to find gig work. A well-crafted statute would ensure that workers, customers, and platforms all benefit from reform.

Since that report’s publication, a number of states have enacted statutes affecting gig work. For example, California, Massachusetts, Washington, and New York allow workers to retain independent status while gaining a limited set of protections, such as guaranteed earnings floors, discrimination/termination protections, and health insurance stipends. Meanwhile, policymakers are exploring how to provide portable benefits accounts that workers would be able to take from job to job. For instance, (ITIF Honorary Co-chair) Rep. Suzanne DelBene (D-WA) has introduced legislation to create a pilot program that would award competitive grants to states, local governments, and nonprofit organizations to design, implement, and evaluate new models and approaches for providing benefits.