Sharing Economy

The Gig Economy May Flourish Under Donald Trump—And That's a Good Thing

Letting workers and bosses come to terms is better than the government protecting old business models and raising prices.

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Startup Grind, YouTube

As Peter Suderman noted yesterday, Donald Trump's pick for Secretary of Labor, hamburger magnate Andy Puzder, has registered his disagreement over many regulations he thinks strangles jobs in the fast-food industry. The head of Hardee's/Carl's Jr., Puzder says that doubling the federal minimum wage to $15 will push outfits like his to full automation more rapidly than otherwise. There's more:

In 2011, he announced that he would stop all restaurant development in the state of California, where CKE is based, and instead focus on opening some 300 restaurants in Texas. California's bulk of regulations could add as much as $50,000 and two years to the cost of opening a restaurant, he told the Associated Press at the time, compared with Texas, where a restaurant could go from a lease signing to opening for business in as little as six weeks.

But what about the "gig economy," new, unconventional, and often part-time relationships between outfits such as Uber or airbnb and workers? Barack Obama, Bernie Sanders, and Hillary Clinton were dead-set against allowing the gig economy flourish and development. In a major speech at the Brookings Institution, Clinton promised to "crack down on bosses who exploit employees by misclassifying them as contractors." The only good job, she averred, was one that looked like the jobs she remembered from her childhood and early adulthood, with clearly delineated divisions between workers and management, standard benefits like insurance and retirement, and more. The Obama administration, various state level pols, and a few activist lawsuits are working to make sure that "gig employees" are treated the same as traditional wage-and-hour workers and offered the same benfits and protections. Which of course will make them more expensive to owners and raise prices to customers. All while reducing the flexiblity the workers themselves might prefer.

Marco Zappacosta, the founder of Thumbtack, which connects contractors and customers, hopes that Pudzer allows the gig economy to proceed without too much interference from Washington, telling CNBC:

"I hope the secretary thinks about all workers and this trend that people are moving toward more independent arrangements," said Marco Zappacosta, co-founder and CEO of Thumbtack, an online platform that connects customers to local professionals for tasks like house painting, personal training and voice lessons. "The biggest one is basically leveling the playing field in terms of benefits and privileges between W-2 employees and independent workers of all stripes." (Disclosure: I know Zappacosta and his father, Pierluigi, served on the board of trustees for the nonprofit that publishes this website).

Based on past statements, Puzder will almost certainly be more hands-off the gig economy than anyone appointed by Clinton. CNBC again:

Puzder credits start-ups as the driver of the U.S. economic engine, calling "entrepreneurial vision and ambition" the invisible hand of America's economy, according to a book he co-authored. Puzder has advocated the repeal of Obamacare and lambasted campaigns to raise the minimum wage or increase overtime pay.

"Far too many politicians believe that government can orchestrate economic activity through regulations and taxation. We beg to differ," Puzder wrote in his book.

Interestingly, critics of the gig economy often want to increase the social-welfare state by shoving the costs of their plans onto employers. That's understandable from a political angle—you don't raise taxes on everyone, you simply businessmen who can afford it, right?—but making labor costs higher through mandates for health care, minimum wages well above market prices, pensions, leave polices, and the like generally doesn't increase the demand for workers, does it? To the extent that it pushes the cost of the next hire above what they could produce for the employer, the job will be automated or covered by existing workers. Old models of employment are always breaking down and being revised. In the 20+ years, I've been at Reason, for instance, we went from essentially zero employees working from home to a largely dispersed workforce and now are re-aggregating in various places. Individualizing your work situation is one of the great wins for many people over the past few decades and experimentation can't happen in a rigid regulatory environment.

It sounds like the Thumbtacks, Ubers, and Airbnbs of the sharing economy will get more breathing space under the incoming Trump team. Which also means those companies customers will too. Which also means their workers—whether technically employees or contractors—will too.

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    1. I believe you mean “a good thing for whom?” you ignorant flyover rube.

      1. Ugh, whatever.

    2. Coastal elites (and their Midwestern contemporaries) who might pay hundreds of dollars to see the famous singer perform his songs of working-class life have lost touch with the very people whose lives populate his ballads. In fact, the disconnect cuts both ways. Many of the very people Springsteen immortalized have now tuned out the Boss, who campaigned hard for Clinton, because of his politics.

      Right, we call these people “racists”.

      1. They’ve either tuned out Springsteen because of “disconnect”, or because he’s an overrated hack who hasn’t released a popular piece of music in over 20 years.

        1. And was an over-rated hack even when he was popular.

        2. And was an over-rated hack even when he was popular.

    3. This is a nice one:

      we celebrate the disruptions of Uber, Airbnb and other apps that can lead to the loss of thousands of jobs, replacing them with precarious piecemeal work and leapfrogging over decades of progressive worker-protection legislation hard won by unions and community planning regulations meant to keep neighborhoods affordable for the working class.

      Not sure what those look like, but they sound fuckin’ scary to me.

  1. If you told people beforehand that you should vote for Donald Trump because if he wins it would change the policy debate so dramatically, they’d rightly think you were crazy.

    But look how the policy debate has changed!

    Under Obama, debates on economic policy were over questions like how to force millenials to buy health insurance they don’t want or need and whether women were making as much as men.

    Trump may be wrong on a slew of economic issues (from trade to stimulus), but if we can have reasonable arguments about what makes economies actually grow again, we’ve made huge progress.

    If it weren’t for Trump, economic debates would be centered on absurd notions like free college and single payer. Remember when ObamaCare was going to make us more competitive globally? Those were the arguments we would be having under President Hillary.

    1. As much as I despise Trump, his economic ignorance, and his drug warrior cabinet picks, he is the first President I can think of who does not make me grit my teeth and pine for the previous one. I include Reagan after Carter in this. Some of his cabinet picks are genius in how they upset the status quo — Labor, EPA, SBA, Education, probably others I have forgotten.

      He probably won’t be able to drain the swamp, but he will at least change the stink a little.

      1. To cop a phrase, Trump is wrong within normal parameters.

        He’s wrong. He’s not absurd.

        Obama was absurd. Obama’s thinking on how the economy works and what makes them grow was dumber than creationism.

        Arguing with creationists is absurd. Life is less than 6,000 years old?! The Devil makes it appear otherwise? You can’t have reasonable arguments about that.

        Obama’s economics were like that.

        Again, look at what Wall Street has done since Trump was elected. The markets are rallying like crazy, and it’s for three reasons 1) Expectations of corporate tax reform, 2) Expectations of deregulation (ObamaCare reform, executive orders exorcised, etc), 3) Expectations of stimulus spending.

        The Russell 2000 is up 20% since Trump was elected because of this–two out of three of which were simply Obama’s absurd notions on economics. The markets give the earnings of the Russell 2000 a 20% higher multiple simply because Obama’s and Hillary’s absurd ideas will no longer dominate policy in the future.

        What an indictment!

        1. Just pointing this out…I’ve never heard of someone claiming life was under 6,000 years old. The moronic assertion that life on earth is ~7,000 years old is from a literal interpretation of a reconstruction of biblical genealogies. I’ve met a couple people who held to that belief (usually earth is under 10,000 years), but it wasn’t something they really knew much about.

          Creationists come in a wide variety of flavors, and arguing against the lunatic 5% only makes people (liberals usually) look dumb to those of us that know something about the subject.

          Otherwise, I second your point! 🙂

          1. I appreciate that not all creationists are created equal.

            I hope you appreciate that I grew up being told by a whole church full of people that God created the heavens and the earth on the first day and that God created the sun, the moon, and the starts on the fourth day.

            1. So did I. That’s not necessarily incompatible with an earth that’s a few billion years old, as long as you know something about Hebrew.

              While I didn’t take a poll, I’d guess that most in my church uncritically accepted that 1 creation day = 1 24hr period. It wasn’t really something that informed their faith or world view except except maybe; “I don’t know how, but God could do it that way”.

              Mostly I was pointing out the 6,000 year inaccuracy, and that I’m fairly certain that those that believe 7,000 years, are a small minority of creationists.

              Sorry it’s one of my frequent internet irritations, kind of like ignoring that one being opposed to illegal immigration, does not make them automatically anti-immigrant.

              1. I understand and appreciate what you’re saying.

                Incidentally, saying that, “What Obama thinks about what makes the economy grow is dumber than creationism” isn’t as bad as saying that “creationism is dumber than progressive economics”.

                In fact, they’re somewhat related ideas.

                1) Creationism, in part, suggests that the universe is so big and complex that a being of infinite intelligence must have been required to create it.

                2) Progressives economics, on the other hand, look at something as big and complex as the U.S. economy and imagine that Barack Obama has the infinite intelligence necessary to plan it.

                The first idea isn’t necessarily dumb.

                The second idea is definitely dumber than the first.

          2. There is a huge creationism museum in KY that promotes young earth creationism. I recall seeing a photo of an exhibit showing a human interacting with a dinosaur.

            Creationism is a perfectly fine topic in a religious studies or philosophy environment, but as that museum demonstrates, their real agenda is having their beliefs supported by science. Intelligent Design is an attempt by creationists to have those beliefs taught as science. ID has been systematically debunked but that never stops the true believers from promoting it.

            1. Being a scientist, myself, I fail to see how people think that science can verify religious concepts. Faith and science are two different things and “the twain” will never intersect. The other problem is when modern men keep adding things they claim are said in the Bible, when they are not. God only prohibited one thing, and that did not work out so well for Adam and Eve! There is no prohibition of alcohol, in the Bible, either! There is so much that is utterly stupid in man made rules. It is called legalism. (Islam is the religion that thinks we need to live by the Old Testament type rules, i.e. Sharia.) Why does man think he can do better than “God”?!

              Number one with me is the stupid behavior about cannabis. The decision to make it a “sin” came from a fourteenth century Pope! I am no longer Catholic. So I don’t have to accept that cannabis use is a sin!!! Science tells me that the earth and the universe is very old. Faith tells me that time does not matter after death. There is no need for me, or any of us, to argue about it!

  2. The Obama administration, various state level pols, and a few activist lawsuits are working to make sure that “gig employees” are treated the same as traditional wage-and-hour workers and offered the same benfits and protections. Which of course will make them more expensive to owners and raise prices to customers. All while reducing the flexiblity the workers themselves might prefer.

    It also makes sure gig employees are properly trackable, registered, recorded, counted, analysed, researched, subjected to reasonable regulation and taxed.

    1. Done and done.

      This past Monday, the council voted 8-0 to pass legislation that gives Uber, Lyft, taxi and other “for-hire” drivers the right to unionize

      By the way, that law that was passed 8-0 was written by a union, and it tracks, registers, records, counts, analyzes, researches and gives the collected names of those drivers to a specially selected group of Unions called out in the law, against the driver’s will.

      This Orwellian shit is called “progress”.

      1. Actually, it’s called “Progressivism” … and if it’s Orwellian shit, it’s most often Progressivism and sold as being something for our own good.

  3. The major issue with the gig economy is Obamacare…until those exorbitant costs are addressed, it will be a drag on it’s growth…we still dont have a system that allows for easy self-employment (taxation etc…)

    1. sue we do. it’s called roll up your sleeves and go to work.Why is that so hard?

  4. The major issue with the gig economy is Obamacare…until those exorbitant costs are addressed, it will be a drag on it’s growth…we still dont have a system that allows for easy self-employment (taxation etc…)

    1. With the risk corridors and reinsurance authorizations set to expire, ObamaCare cannot continue in its present form.

      Obama knew it would fail before it was passed. He just had so much political capital invested in it ahead of his reelection campaign, not getting it passed would have been seen as an enormous failure–and might have cost him the White House.

      America hates failures.

      Before ObamaCare, there was Hillary Care, which was so massively unpopular after it failed, that it gave the Republicans control of Congress for the first time in 40 years. Obama wanted to avoid the perception that ObamaCare was like HillaryCare.

      In fact, that’s the real reason they chaffed against people calling it “ObamaCare” was because of 1) its association with “HillaryCare”, which was itself a loaded synonym for “stupid loser” and because 2) it was destined to fail–and they knew it.

      Anyway, the risk corridor payments are in the billions per year, and my understanding is that the authorization expires at the end of 2016. No way the Republican Congress will reauthorize that funding or fund it in perpetuity. If Hillary were in office, she’d refuse to sign any budget that didn’t include a “public option”–putting us firmly on the road to single payer.

      But elections have consequences, and praise J.R. “Bob” Dobbs for that.

      1. People like Obama don’t ever believe their pet policies ever fail on their own merits. The excuse is ALWAYS that the policy didn’t get the proper funding or public support. Then, when the public doesn’t support their agenda, the public is then characterized as being immoral or uninformed. The progressive version of this usually resorts to calling people racists, bigots, misogynists, xenophobes, etc.

  5. Secretary Puzder might enjoy it if journos like Nick Gillespie would spell his name correctly.

  6. the “gig” economy has been around forever – we in the working class and construction live by it – always have –

  7. Things like the Clinton She Unit have not lived life in reality. Sure, nearly everyone had a kid job, where they had to show up and make like a worker for so many hours at such and such an address. Even then, in grade school, I preferred self-employment where I was in charge of my time. Long as I got the task done in the time and for the money agreed upon, no one cared WHAT I did when I was not there… or WHEN I was not there.

    Many folks today have to wear different “hats”…. young children at home need certain things done at certain times of the day. Many are wising up to the wretched state of gummint skewlz and don’t want their kids in them. I almost wonder of the gummint pressure to destroy Uber etc isn’t one more spoke in the wheel of forcing everyone to put their kids in gummit skewlz? If Dad can’t run a few fares midafternoon while Bily is at music lesson and Susie at ballet, or maybe both at Mrs. Jones’ house working with other kids learning about biology. then his time is wasted sitting in some room somewhere twiddlling his thumbs.

    1. I also am convinced that this pressure is further designed to put everyone under the tight yoke of government…. if no one can subcontract or directly hire, then government get a bigger slice of the pie, not to mention control and information, over the individuals. Nannies don’t LIKE it when James and Robert just go out on a ramble through the woods… SHE must know where they are and what they do every second. And the like of the Clinton She Unit demand total knowledge and control over everyone all the time. SO glad she got dumped. Way past time.

  8. like Dawn replied I’m shocked that someone able to profit $8730 in a few weeks on the
    As Harold said I am startled that a student can get paid $7187 in four weeks on the internet .
    hop over to this site
    +_+_+_+_+_+_+_+_+ http://www.homejobs7.com

  9. I spent the last forty years of my career “gigging.” But we called it contracting. It’s been around forever, and a person can do very well, or not, depending on little minor details such as skill, experience, and perseverance. It’s not up to Trump, and it was never up to Obama. It’s up to you.

  10. So Sheriffs Departments around the US want to shut down Waze because it would allow terrorists to find them or the police.

    Getting them together is the quickest way to end up with dead terrorists instead of dead citizens. Isn’t that why we have police and sheriffs?

  11. Uber is a surveillance system. For your freedom’s sake, don’t ride on Uber and don’t give Uber any money. It is running at a loss and by rejecting it we can kill it.

    http://stallman.org/uber.html

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