Tech and the Promise of Work
The social contract around work is changing.
Large employers are leveraging their power to employ people on their terms - and their terms only. Many (not all!) are eroding working conditions for millions, cutting wages, benefits, and employing more and more people through short-term contracts as they struggle to remain competitive. As employers continue to seek new ways to gain access to the least expensive, most flexible labor, and AI and automation continue to make jobs obsolete, it seems like the future of work is a race to the bottom for the workers.
But does it have to be?
Throughout the 1900s, incredible groups fought for workers' rights. Unions were more than just groups of people in the same job - they served an important role in organizing both social and political power on behalf of people with common interests. They were popular (almost 35% of American workers in 1954 were part of a union), and they were effective, securing the 40 hour work week, the 8 hour day, child labor laws, and many other benefits we consider commonplace today. Even today, union workers, on average, earn over than 10% more than their non-unionized counterparts.
But many workers don't have a union anymore - and support for unions as organizations is at an all-time low due to a combination of regulation, globalization, and employer strategies.
Without that voice and the power of that organization, the question I wanted to explore was what role tech can play in securing a future for workers that doesn't look like a race to the bottom. A future where fair compensation for fair work is the norm, not the exception, for the most vulnerable members of the workforce: freelancers.
In January and February of 2020, we brought together leaders from corporate philanthropies, sector experts, entrepreneurs, and members of the gig economy for our second RealTalk: an in-depth discussion on what having a good job means, where society is falling short now, what solutions exist, and where the persistent gaps are that will define the future for workers in America.
This is by no means exhaustive - but I found it informative. I'm looking forward to your thoughts on what other challenges (and solutions!) are out there.
What All Full Time Work Should Have
Accessibility: Workers should be able to find and apply to opportunities in an open and easy way. Hiring should be based on skill, potential for growth, and required knowledge, not pedigree. Moreover, the process for hiring should be clearly laid out for both interviewees and interviewers.
Dignity: Work should have a sense of purpose. Not all work is going to be saving the world, but finding a deeper meaning in work has been shown to lead to increased job satisfaction and work quality. Workers should have a voice and know that they're heard by their employers. Personal respect and safety, with policies in place to prevent harassment, protect whistleblowers, etc, should be a non-negotiable aspect of work. Some level of autonomy or trust should exist, helping people break free from micromanagement and work within some kind of results-driven framework.
Fair Compensation: Living wage, ideally pegged to at least inflation (if not a higher standard) to provide workers the necessary financial support to live a good life. Timely and consistent distribution of earned pay to ensure stability of income and enable long-term planning. Automatic withholding for freelancers, to ensure that they aren't penalized come tax time. Meaningful benefits should be accessible and affordable, including short-term (healthcare, child care, etc), and long-term (retirement, pensions, etc) benefits.
Predictability: Work, regardless of type, should have a clear status (w2, 1099, etc) and the associate rights (and responsibilities) should be well-known. Clear performance requirements for employment should be listed and understood on both sides of the table. Clear feedback on performance, with actionable opportunities for improvement should be provided. Clear hours of engagement should be presented to workers, with an understanding of when it's necessary to be "on" or present.
Problems in the Workforce Now
Unstructured work opportunity information (a million job boards, many with fake positions)
Inconsistent, unclear, and often biased hiring practices
Lack of voice ("I'm a cog in a machine")
Lack of autonomy ("you're on my time")
Unlivable wage (who can live in NY on $15/hour??)
Inconsistent/untimely pay (particularly a problem for gig workers)
Reduced/inaccessible benefits (particularly a problem for part time or gig workers, but increasingly affecting w2 workers as well)
Clear status (employers leveraging power imbalance to force employees to be "on demand")
Clear feedback (this has ALWAYS been a problem!)
Clear hours (particularly for part-time employees, gig workers, increasingly for w2 workers "always on" challenges)
Solutions (and challenges with them!):
Next-gen benefits - innovations like Vault (pre-tax student loan repayment benefit) and Money Fit are broadening what benefits there are out there, what other solutions have you seen?
Challenge: these are often hyper-specific, only offering financial advisory or healthcare or any one single benefit. This is great to supplement existing employer benefit packages, but can really add up for non-w2 workers!
Work aggregation platforms - platforms like UpWork and Indeed bring together tons of opportunities in an organized way.
Challenge: These are the last generation of work aggregation, but what else is out there developing new approaches to this?
Work and benefit aggregation platforms - platforms like Rise bring together both work opportunities and benefits for nontraditional employees, 1099 workers, etc. by building partnerships with next gen benefits providers.
Challenge: This shit's hard! Groups like Rise need connections to strategic partners, investors, and guidance to grow and scale.
1099 enabler innovations - groups like Painless 1099 and Catch help with automatic withholding and other key challenges for 1099 workers.
Challenge: There are SO MANY tax withholding calculators - where are the platforms that help with other challenges for 1099 workers?
HR management platforms - Small improvements and Officevibe help employers set clear goals, provide feedback in a structured way, and pulse employees with surveys to understand overall wellness.
Challenge: Adoption! How do we get these tools and things like them to more companies? How do we get similar support for 1099 or contract workers?
Persistent Gaps
Place for worker organization - Facebook groups exist, but there don't seem to be a lot of opportunities for workers to come together and express their desires and frustrations as a group. Has anybody seen anything like this?
Dis-aggregation of benefits - Increasingly, the burden is on employees to find supplementary services to build out what used to be a comprehensive package of benefits. No longer do we receive pensions, we get a match (maybe) on our 401k! How do we slow the erosion of our benefits or, at the very least, aggregate the ones we need into one accessible area?
What's Next?
The future of workers is nebulous. Leading groups like the Mastercard Center for Inclusive Growth are studying the challenges and potential solutions in this space - with an emphasis on trying to find the right way to create a better future for workers. PayPal is finding new ways to improve their approach, doubling down on their commitment to financial health for their employees as well as the world at large.
While entrepreneurial solutions like the ones described in our recap above above are only a small piece of the solutions that workers need, they play an important role in the ecosystem. And they need support - access to resources, perspectives, and training that will help them grow and scale over the long term. Village Capital is supporting another batch of leading, seed-stage ventures later in 2020. Keep an eye out for more from our team on that front in the coming months!