Former U.S. Labor Secretary Robert Reich has a few ideas on how to improve conditions and wages for workers in the "gig economy."
Reich, who served as labor secretary during the Clinton administration and has become a prominent voice for liberal economic solutions — including on behalf of Bernie Sanders's presidential campaign — is troubled by the gig economy, which he told Buzzfeed is both a "product and a cause" of income inequality and wage stagnation.
There are no shortage of Uber critics on the left, many of whom chide the company for evading or fighting safety regulations or paying their drivers low wages. Reich said he was unhappy, but not surprised, to learn that Uber drivers in three cities examined by the website made roughly $14 an hour, without accounting for maintenance and fuel costs.
Recommended For You
Reich differs from most other critics in that he has a few solutions that don't necessarily include cracking down on the company, per se.
His first proposal is wage insurance. The government would provide a type of insurance policy that would help workers out in the event of a month of bad earnings, in the same way that one relies on health insurance in the event of health problems or unemployment insurance after being laid off.
"If you, next month, are earning half as much as you earned this month, the wage insurance or income insurance would give you, say, half the difference between the two," he told Buzzfeed. "It smooths out your income stream over time."
Reich also emphasized the importance of portable benefits. The Affordable Care Act has made it easier for individuals to purchase health insurance outside of the traditional employer-sponsored system, but there is a lot more work to be done, he said, so that sole proprietors and freelancers benefit from the tax breaks that are currently extended to employer-paid benefits.
One proposal of Reich's will certainly engender more opposition from Uber, Lyft, and other gig economy employers. He wants their drivers to be classified as employees, not contractors, a source of ongoing legal battles.
In April, Uber agreed to pay $100 million in reimbursement costs to drivers in Massachusetts in California to avoid a trial over whether the drivers should be classified as employees. The drivers had sued, arguing that they should be classified as employees and thus entitled to reimbursement for the expenses they incur driving their own cars for the company.
Interestingly, Reich estimates that 30 percent of the U.S. workforce belongs to the gig economy, a claim that contrasts strongly with another recent study that found that less than 1 percent of U.S. workers can accurately be described as relying on online gig economy platforms, such as Uber or AirBnB, for income. Reich's description is presumably broader, and likely includes freelancers and contractors who do not rely on such platforms.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.