The gig economy is not the future

It's the past. A proposed new Biden Labor Department regulation makes that clear.

People say the gig economy is the future, but really, it’s the past. It’s what immigrants did in crowded, tuberculosis-spreading tenement apartments on New York’s Lower East Side, as documented by Jacob Riis in How The Other Half Lives. Riis took the photograph you see above, which shows three entrepreneurs, one of them a child, enjoying their freedom to set their own work hours, around 1900.

The sweatshop economy never quite recovered from 1938 passage of the Fair Labor Standards Act (FLSA), which defined the employer-employee relationship very broadly and required employers to pay minimum wage and overtime when the workweek exceeded 44 (later 40) hours per week. The advent of the smartphone persuaded some businesses that the FLSA was an artifact from another time and that they were free to classify as independent contractors people who, under the FLSA, clearly are employees with all the obligations employment incurs—not only minimum wage and overtime but also contributions to Medicare, Social Security, and unemployment insurance. What a bore! A regulation that the Trump administration finalized in January 2021 made it easier for employers to duck these responsibilities, in defiance of the FLSA’s statutory language and of judicial interpretations of that language going back to the 1940s. The Biden administration has now proposed eliminating the Trump regulation and reinstating the previous standard. That’s the topic of my latest New Republic piece.