Asbury Park Press: Reclassifying ‘gig’ workers is a bad idea

This article originally appeared in the Asbury Park Press.

As COVID-19 and the massive economic downturn change the lives and livelihood of every American in this country, we know firsthand Black businesses are hit the hardest. The U.S. Black Chambers (USBC) represents Black businesses across the nation, who collectively generate over $150 billion in economic activity. These businesses grapple with systemic barriers to financing their ventures, which prevents investment in Black communities. Amid the ongoing economic downturn, the most prevalent disparities exist within the small business ecosystem. Case in point, while the nation lost 3.3 million small businesses in the first and second quarter of the year, the number of Black enterprises declined by a devastating 41%.

More than 40% of Black-owned businesses have closed since the pandemic began, most of them permanently. Many of the remaining Black-owned restaurants and other businesses who have managed to keep their doors open, virtually or otherwise, rely on gig economy platforms like ridesharing and food delivery apps and other on-demand networks, to stay in business.

At the U.S. Black Chambers, we urge policymakers to move the needle on policies that strengthen the Black business community. New Jersey, for example, had more than 237,000 minority-owned small businesses, about 28% of all small businesses in the state and yet report persist of businesses not able to access capital to stay open. Congress must create responsible policies and prepare the next generation of entrepreneurs to bolster the American economy.

As we outlined in our 2020 BLACKprint, technology and the advent of the digitization of commerce represents both a challenge and opportunity for Black America. The “gig economy” as it’s referred, it just one example of how technology is changing the American workforce landscape. It has unlocked a wave of economic value for the Black community, especially during this pandemic. The food delivery boom, for example, caused by social distancing measures has actually created new income streams for those who may have lost income or hours, enabling many to work a few hours per week to make ends meet while providing a lifeline to many Black-owned restaurants.

Currently, there’s an ill-conceived notion that reclassifying these independent contractors/gig workers as employees is good for workers and for small businesses. It is not, as the good people in the great state of California demonstrated when they rejected reclassification efforts there. Reclassifying drivers would wreak havoc on the industry, and on the remaining businesses-of-color serving communities-of-color. During these difficult times, we must work together to develop solutions that protect the flexibility and benefits the gig economy offers to workers and small businesses, while creating protections and benefits tailored to this new type of work.

Ron Busby is president & CEO of The U.S. Black Chambers (USBC)

Flexible Work for New Jersey
Flexible Work for New Jersey