Headline January 05, 2017/ ''' *APP-ECONOMY* - *GIG-ECONOMY* ''

''' *APP-ECONOMY* - 


TURNING FREELANCERS for firms like Uber into employees would not necessarily improve their lot.

NUMEROUS STUDIES HAVE FOUND  that the more the firm pays for their health insurance, the less they pay in wages.

For instance in 1994,  Jonathan Gruber  of  MIT found that when some states began insisting on better coverage for  childbirth-

Married 20 to 40 year old women  -whose insurance costs rose most on average  -took an offsetting hit to their pay.

The third main benefit, support for the jobless, relies on the label ''employee''  by definition.  Temporary and part-time work muddies the rules on eligibility

In many countries those working more than a certain number of hours a week cannot claim benefits. 

That creates a sharp incentive for on demand workers to limit their hours to remain eligible. In New York, for instance, weekly benefits are reduced by 25% for every day on which any work is performed.

Elsewhere, eligibility depends on the circumstances in which the employee left his previous job.; if he quit voluntarily the government may not pay anything. 

*In a world of flexible hours, this can open up tricky questions*.

If a worker signs up for a job with irregular hours, but then quits when his shifts change in an intolerable way, many Americans states will not pay any benefits.

Fortunately, there is a relatively simple fix: make welfare payments contingent only on income, rather than circumstances.  Benefits can be withdrawn gradually as income increases, perhaps at a  rate comparable to income tax. 

That would encourage  jobhunters to take on piecemeal work in the *gig economy*.

Pushing on a string:
If  compulsory benefits are offset by lower wages, why should Uber's drivers care how they are labelled? 

Accepted economic wisdom provides one possible answer : wages are ''sticky'' , or hard to cut in cash terms, If it takes time for pay to fall in real terms, workers who win more benefits in court would be better off for a short while.

Workers may also recognize that there is one benefit attached to employee status   -a minimum wage-  that cannot be offset by lower pay.

Is that an argument for a minimum wage for contractors?  

Opponents point to its distorting effect on incentives. Workers would look to boost hours rather than the output, requiring firms to monitor their efforts closely.

In Uber's case, a driver could stay in a quiet area, take few passengers and still make money.

What might tip the balance the other way is if firms have too much bargaining power over their workers. This should not apply to traditional contractor, such as plumber, who works for lots of clients.

But were  apps  to dominate a whole market  -as some suspect Uber eventually might   -the contractors may feel out gunned.

If that happens, they will need more protection.

With respectful dedication to all the Jobless, Part Time Workers and Employees the world over. See Ya all on !WOW!  -the World Students Society and  Twitter-!E-WOW!    -the Ecosystem 2011:

''' Part-Time-Palaver'''

Good Night and God Bless

SAM Daily Times - the Voice of the Voiceless


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