By Charlie Simmons
Silicon Valley is the engine of the rapidly growing gig-economy. Consumers love the convenience of having goods and services delivered right to their door at the push of a button. Many workers are enjoying the benefits of making their own hours and minimal corporate oversight.
But there’s one big problem: many of these workers are classified as 1099 contractors, rather than employees.
The 1099 system gives workers the flexibility to fully choose how and when they work, but it also demands very little from companies, who do not have to cover transportation costs, offer paid vacation, or contribute into 401(k) accounts.
That’s the perfect system for Silicon Valley’s tech start-ups. Most of them are in aggressive growth stages and are trying to expand to new cities, recruit new workers and bring on new customers. This way, they only pay workers for the actual time they spend on their service.
While debate about the merits of the gig-economy continues, it’s clear that it’s here to stay. If we are shifting to a system of self-employment, we need to rethink how we deliver crucial worker protections and services that our nation’s labor groups have fought for and won, including overtime protections, weekends, redress from unjust dismissal, and — most importantly — expanded and improved health insurance.
For decades, millions of Americans have received insurance through a patchwork quilt of employer-based insurance and government programs to cover vulnerable populations. With the rise of the gig-economy, the quilt is unravelling, presenting an opportunity to fix our country’s flawed healthcare system.
Employer-sponsored health insurance has never been the best option for workers, businesses or the economy.
First and foremost, our system is the most expensive healthcare system in the world. Second, it keeps people from pursuing better jobs or going back to school out of fear of losing their health coverage. Third, the rising cost of health insurance has kept wages static. Workers in their 50s and 60s, who are more expensive to insure, might be forced out of their jobs or unable to find new ones.
Finally, it fails to achieve universal coverage. A Medicare-for-All healthcare system is the clear solution to these problems.
If we were to shift to a system where the government was the primary insurer, we could help employees and businesses more freely make decisions about what is best for their careers, families, and growth.
People would be able to move jobs easily, innovate and build their own business, or work in the growing class of gig-economy jobs without the fear of bankruptcy from medical costs.
Businesses would lose the unpredictable and always increasing costs of insuring their workers, which means they can hire more people, expand to new locations and markets, and pay better wages. Ultimately, universal coverage would mean a healthier workforce, and eliminate the high costs of uninsured patients using the ER as their primary care facility.
As the structure of our economy and business-labor relations change, it’s clear that our healthcare system is falling behind. In every other industrialized country, healthcare systems have been designed around the idea that ensuring everyone has access to quality health insurance means there must be significant government involvement.
As a result, they’ve all created healthcare systems that cost significantly less and provide a higher quality of care. We can do the same in the U.S. with Medicare-for-All.
Charlie Simmons has worked and lived in Silicon Valley for 42 years, retiring from NetApp as VP of Corporate Development. He is a member of the Patriotic Millionaires and the Business Initiative for Health Policy. He wrote this for The Mercury News.