The American presidential election is in full swing, and one campaign topic stands out as worthy of early attention: What will the next president do about the economy’s rapid shift toward “worker-entrepreneurs,” or people who offer their skills, assets, or labor in temporary stints, often through a digital broker?
Various terms try to capture this historic change: the gig economy (as in music gigs), Uberization, a distributed workforce, or the “precariat,” as in precarious proletariat. Old words such as worker or capitalist don’t seem to always apply. It is easier to describe people in metaphors like “task rabbits,” or those who regularly forage for their prosperity.
“Technology and the changing nature of work are adding a layer of complexity that we need to grapple with,” said US Secretary of Labor Tom Perez in a June speech. “What do we do about the possibility that an entire regulatory infrastructure, built around 20th-century models of work, could be rendered obsolete?”
The election campaign is starting to focus on this phenomenon, one that blurs lines between liberal and conservative. On Thursday, GOP front-runner Jeb Bush visited the San Francisco offices of Thumbtack, an on-demand technology firm that connects professionals such as plumbers and interior designers with consumers. Last Monday, Democrat Hillary Clinton gave a speech on the economy in which she praised Uber-style innovation and proposed incentives for corporations to share profits with workers.
Mrs. Clinton’s proposal would give employees a stronger stake in their productivity and the success of their employer. It relies on a report last January by the Center for American Progress, a liberal think tank with ties to her campaign. The report, titled “Inclusive Prosperity,” makes suggestions to promote employee stock ownership plans, or ESOPs, which took off in the 1970s with federal tax incentives.
About 7,000 companies with more than 10 million people now operate various types of ESOPs in the United States. They have helped challenge traditional thinking about the source of wealth. Does it come more from labor or from risk-taking capital? Who deserves more of the rewards from success – those who put money, technology, and ideas into an enterprise or those who do most of the daily work?
These are not abstract questions, especially as growth in productivity has fallen worldwide over the past decade. Economists are searching for better engines of efficiency that can drive higher living standards.
The newly emerging economy of worker-entrepreneurs has forced individuals to better size up their inherent talents, their motives, and their ability to grow and learn. Would I better express my worth as an Uber driver or a normal taxi driver? Can I even come up with an idea like Uber? When does sharing ideas and income, rather than keeping them to oneself, pay off in a win-win way?
This election campaign can serve a grander purpose by stirring a discussion about new ways to broaden wealth. The two political parties may try to strike differences in their approaches. But whoever becomes the next president must be prepared to give up old notions of wealth as tied mainly to money or material gain. Prosperity lies more in people who understand, practice, and expand their worth.