President Barack Obama tackled the so-called “gig” economy — and the growing number of Americans who move from one temporary job to the next without benefits — in a summit at the White House on Wednesday.
The president, as well as leaders from business and tech start-ups, touched on other labor-related topics including minimum wage, unions, sick leave, automation and freelancers, in order to brainstorm on how to better create regulations around the evolving American workforce.
“We’ve got folks who are getting a paycheck driving for Uber or Lyft; people who are cleaning other people’s houses through Handy; offering their skills on TaskRabbit,” the president said. “And so there’s flexibility and autonomy and opportunity for workers.”
But the president cautioned that the change could have negative consequences for employee rights and benefits.
Meanwhile, the president praised companies such as Costco, highlighting its starting salary of $11.50 an hour, employee benefits and opportunities for growth.
“If the combination of globalization and automation undermines the capacity of the ordinary worker and the ordinary family to be able to support themselves … then we’re going to have problems,” he said.
Dan Teran, co-founder of technology office management start-up Managed by Q, was invited to take part in the discussion.
“I think including technology companies and new economy employers at the table was a smart move to make sure that we’re really moving toward the future of work, rather than trying to recreate the past,” Teran told CNBC after the event.
Teran’s start-up employs approximately 400 workers, including software engineers, cleaners, handymen and assistants. Its staff members are all considered W-2 employees with health benefits, 401(k) and paid time off.
He participated in a panel that addressed the challenge of who bears the costs of benefits to a worker who works multiple gigs.
“We get better and better at leveraging technology to do stuff that people used to do,” he said. “I think it can be a brilliant future, but we have to get there thoughtfully.
Arun Sundararajan, a professor of information, operations and management sciences at New York University, spoke on what needs to be done to refashion the social safety net to better suit the emerging freelance workforce.
“We’re not in a world anymore where everyone wants full-time, salaried employment,” he told CNBC. “It’s hard to use minimum wage (laws) to help someone who runs their own business of one, and this is a growing fraction of the workforce.”
Obama criticized companies that in recent years have cut costs by hiring contractors and “permatemps — workers who labor side-by-side with full-time employees but don’t earn the same pay and benefits and job security.”
The president acknowledged it would be unlikely for Congress to pass legislation related to the issue during his remaining 15 months in office, but he emphasized the importance of creating the conversation.
Teran of Managed by Q said his trip to the White House affirmed that there are many stakeholders deeply interested in what the solution will be and the importance of holding the Summit. “It seemed like people are mostly on the same page about what is not working,” he said. “But nobody has a super clear idea of how we fix it.”