The Gig Economy and Independent Contractors

2021 ◽  
pp. 136-160
Author(s):  
Eric A. Posner
Keyword(s):  
Labor Market ◽  
Market Structure ◽  
Theoretical Basis ◽  
Labor Law ◽  
Independent Contractors ◽  
Specific Investments ◽  
Gig Economy ◽  
Competitive Labor Market

In recent years, a controversy has erupted over the distinction between employees and independent contractors. Commentators have argued that in the modern “gig economy,” many people traditionally classified as independent contractors are as vulnerable as employees and should be granted the legal protections that employees alone normally enjoy. However, the distinction between the two categories remains inescapable, and the theoretical basis for it has not been identified. A better approach derives the distinction from market structure. Employees are workers who, because they must make relationship-specific investments in a single firm, are subject to labor monopsony. Independent contractors do not make such relationship-specific investments, and hence normally operate in a competitive labor market. Employment and labor law may be explained as a method for protecting workers from labor monopsony; because independent contracts are not subject to labor monopsony, they do not require such protection.

Conclusion

2021 ◽  
pp. 161-164
Author(s):  
Eric A. Posner
Keyword(s):  
Artificial Intelligence ◽  
Labor Market ◽  
Labor Markets ◽  
Human Beings ◽  
Independent Contractors ◽  
Gig Economy ◽  
Long Run ◽  
The Social ◽  
Market Fragmentation ◽  
Social Surplus

Many people are worried about the fragmentation of labor markets, as firms replace employees with independent contractors. Another common worry is that low-skill work, and ultimately nearly all forms of work, will be replaced by robots as artificial intelligence advances. Labor market fragmentation is not a new phenomenon and can be addressed with stronger classification laws supplemented by antitrust enforcement. In fact, the gig economy has many attractive elements, and there is no reason to fear it as long as existing laws are enforced. Over the long run, artificial intelligence may replace much of the work currently performed by human beings. If it does, the appropriate response is not antitrust or employment regulation but policy that ensures the social surplus is fairly divided.

Time’s Up! Shorter Hours, Public Policy, and Time Flexibility as an Antidote to Youth Unemployment

2018 ◽  
Author(s):  
Katherine Eva Maich ◽  
Jamie K. McCallum ◽  
Ari Grant-Sasson
Keyword(s):  
United States ◽  
Public Policy ◽  
Labor Market ◽  
Youth Unemployment ◽  
The United States ◽  
Employment Relationships ◽  
Gig Economy ◽  
Hours Of Work ◽  
The Relationship ◽  
Work Scheduling

This chapter explores the relationship between hours of work and unemployment. When it comes to time spent working in the United States at present, two problems immediately come to light. First, an asymmetrical distribution of working time persists, with some people overworked and others underemployed. Second, hours are increasingly unstable; precarious on-call work scheduling and gig economy–style employment relationships are the canaries in the coal mine of a labor market that produces fewer and fewer stable jobs. It is possible that some kind of shorter hours movement, especially one that places an emphasis on young workers, has the potential to address these problems. Some policies and processes are already in place to transition into a shorter hours economy right now even if those possibilities are mediated by an anti-worker political administration.

Transaction Cost Economics, Labor Law, and the Gig Economy

2021 ◽  
Vol 50 (S2) ◽  
pp. S219-S237
Author(s):  
Seth Oranburg ◽  
Liya Palagashvili
Keyword(s):  
Transaction Cost ◽  
Transaction Cost Economics ◽  
Labor Law ◽  
Gig Economy

scholarly journals An Institutional Logics Perspective on the Gig Economy

2018 ◽  
Author(s):  
Koen Frenken ◽  
Taneli Vaskelainen ◽  
Lea Fünfschilling ◽  
Laura Piscicelli
Keyword(s):  
Labor Unions ◽  
Self Regulation ◽  
Institutional Reform ◽  
Labor Law ◽  
Institutional Logics ◽  
Peer To Peer ◽  
The Self ◽  
Gig Economy ◽  
Institutional Challenges ◽  
Traditional Roles

We witness rising tensions between online gig-economy platforms, tax agencies, regulators and labor unions. In this paper, we use the framework of institutional logics as an analytical lens and scheme to understand the fundamental institutional challenges prompted by the advent of the online gig economy. We view gig-economy platforms as corporations that organize and self-regulate markets. In doing so, they span two parallel markets: the market for platforms competing to provide intermediation services and the market for the self-employed competing on platforms to provide peer-to-peer services. Self-regulation by platforms also weakens the traditional roles of the state. While the corporation and market logics empower the platform, they weaken self-employed suppliers as platforms' design constrain suppliers to grow into a fully-fledged business by limiting their entrepreneurial freedom. At the same time, current labor law generally does not classify suppliers as employees of the platform company, which limits the possibility to unionize. The current resolutions to this institutional misalignment are sought in "band aid solutions" at the level of sectors. Instead, as we argue, macro-institutional reform may be needed to re-institutionalize gig work into established institutional logics.

scholarly journals On the Incentives to Increase Input Efficiency under Monopoly Trade Unions

2012 ◽  
Vol 4 (1) ◽  
pp. 39-51
Author(s):  
Tapan Biswas ◽  
Jolian McHardy
Keyword(s):  
Labor Market ◽  
Minimum Wage ◽  
Trade Unions ◽  
Utility Functions ◽  
Elasticity Of Substitution ◽  
Cournot Duopoly ◽  
Technological Improvement ◽  
Input Efficiency ◽  
Competitive Labor Market

We examine the effects of and the incentives for increasing input efficiency within a spatially segregated  Cournot duopoly with monopoly trade unions whose utility functions depend on both wages and employment. We show that with neoclassical as well as Leontief technology, unions raise wages to appropriate fully the gains from labor-saving technological (or organisational) improvements, leaving the firm with no incentive to invest in increasing the efficiency of workers. However, capital-saving     technological improvement may be profitable depending on the elasticity of substitution. Finally, we examine the implication of a fixed minimum wage (or competitive labor market) in one country.

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