Rupture and Invention: The Changing Nature of Work and the Implications for Social Policy

Abstract

For the first time in decades, politicians and commentators are taking seriously the decline of the middle class. Public debate is focusing on the issues of income inequality, stagnating wages, long-term unemployment, and the decline of steady work. In addition, some see the rise of Uber, Lyft, and Task Rabbit as portending a new form of work relationship altogether, the consequences of which are by no means clear. Policy-makers have offered a number of proposals to address these problems, including raising the minimum wage, investing in more training, initiating a new stimulus program, encouraging employee ownership, and so on. While the problems are urgent and the proposals are important, the issue is more fundamental than the proposals acknowledge. Rather, over the past three decades, the entire context of the work experience has changed profoundly, so that the legal system and social welfare mechanisms constructed in the past do not work anymore.

The rise of the on-demand economy is the logical extension of trends that have been developing for years. Over the past three decades, it has become commonplace for workers to have revolving jobs, short and variable hours, and temporary gigs rather than steady employment with reliable income and benefits. But despite the transformation in the nature of work, many of our social welfare institutions – our social insurance system, education system, and even our housing policies, were devised during the era in which people had long term jobs with a single entity for the entirety of their working lives. The ideal of stable long-term employment served as a template on which not only the labor laws, but also our laws regarding old age assistance, health insurance, unemployment insurance, home ownership, and education were based. These institutions formed the post-World War 2 social contract. Thus, our social laws and institutions are no longer adequate.

This piece describes the fundamental changes in the nature of work, the dramatic shift of risk that they have wrought, and the failure of existing social institutions to provide an adequate safety net. It then offers proposals to rethink how to provide security and stability in an era where the employment relationship no longer serves that function. The challenge for public policy today is to devise new regulatory and institutional arrangements that address the reality and vulnerabilities of today’s workers.

Keywords: employment law, nature of work, social welfare, income inequality, unemployment, social welfare infrastructure