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State Policies and the Future of Work

There's much that policymakers can do to provide workers with stability and benefit their states' economies.

What will work look like in 20 years and beyond? "Sharing economy" companies such as Uber and TaskRabbit have brought new attention to the way we work, but many of the employment transformations we've seen have evolved over decades. State policies can help shape whether disruptive changes to work and employment have a positive or deeply negative effect on workers and their states' economies.

State policymakers need to understand the trends at work and the actions they can take, not only to respond to the changing nature of work but also to proactively improve economic security for their constituents. In a recent brief by the Aspen Institute Economic Opportunities Program, we explore trends and preview a policy framework for policymakers to consider.

The most significant trend is the changing employer-employee relationship. In the traditional model, employers provide workers with decent pay, regular hours, benefits and opportunities for growth in exchange for loyalty and productivity. Income and core benefits such as health insurance, retirement security, unemployment insurance and paid time off are provided through one's employer, not through government or a third party.

That traditional employer-employee relationship has been changing since long before one could summon a car service with a smartphone app. Globalization, a corporate focus on short-term results, a decline in organized-labor membership and activity, and a host of other factors have eroded the stability of this model, and businesses have reduced labor costs by outsourcing, subcontracting and constricting wages, hours and benefits.

The problem is that public policies have not kept pace with these changes. So what can policymakers do? They should look for ways to shore up the employer-employee relationship while exploring and experimenting with new social-contract models that provide for the mix of traditional employment, independent contracting and hybrid employment that we likely will see more of in the future.

Policymakers should adopt policies that provide workers with decent incomes and core employment benefits and protections no matter their specific employment status. Such policies would acknowledge the variations in employer-employee relationships and provide working people access to these core protections and benefits during times of contingent employment, underemployment and unemployment.

Some states are doing this already, providing state-based retirement accounts and embracing the benefits of the Affordable Care Act. But there is still a way to go before workers -- especially low-income workers -- have broad access to affordable, portable benefits. Other state policies that would help include guidance on how to properly classify an employee versus a contractor, requiring companies to provide core protections and essential benefits to workers no matter their employment classification, worker bills of rights, and actions to improve the predictability and stability of work hours.

State policymakers also should consider policies that promote more worker-friendly business models and that strengthen workers' input into decisions about their work. As the once predictable and mutually beneficial relationship between employers and employees changes, we should be supporting alternative, innovative models in which workers are positioned as central assets to company strength and growth, rather than being treated merely as cost centers to be reduced. Financing, training and supporting policy frameworks for co-ops, employee stock ownership plans and benefit corporations would help to grow these models. Policy support for new ways of organizing workers, such as community-level bargaining authorities, could also help to include workers' voices in shaping the future of their work.

As employment changes, employers, employees and government should act to generate positive change and to mitigate the downsides. Some states already have made policy changes to meet the challenge of securing shared economic prosperity. Others can draw upon numerous policy ideas and proposals, such as those outlined in our state policy brief, to guide policymaking toward brighter futures for workers.

The changing nature of work is fundamentally altering our economy and society. But it's not like the weather; we can shape the changes, and state policies are key drivers.

Associate director of the Economic Opportunities Program at the Aspen Institute
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