Communities of color can’t afford costly worker re-classification

by Harry C. Alford and Kay DeBow

Few across the U.S. have escaped the impacts of the COVID-19 crisis. Over the past five months there have been dramatic shifts in the way we live our lives with many suffering great loss, both of lives and of livelihoods. This is especially true for communities of color, who are at a higher risk for both health and economic challenges because of COVID and have been disproportionately impacted by the pandemic. 

According to the Urban Institute, 41 percent of non-Hispanic Black families lost jobs, work hours, or work-related income during March and April of the pandemic alone. In moves designed to keep their families afloat, many have turned to “gig work” as a source of supplemental income during these times.  Gig work are most commonly seen by those using app-based driving platforms offering rideshare or food delivery.  

The food delivery boom caused by social distancing measures has actually created new income streams for those who may have lost income or hours, and has enabled many to make ends meet. But the benefits of independent work like app-based driving have not only been a lifeline during these times, they also have emerged as a preference for many over the traditional 9-5. 

A recent Uber-commissioned poll found that 86 percent of drivers say a reason they chose app-based driving was to have flexibility in their schedule. Additionally, 80 percent of drivers say the ability to schedule their work around their family, health, or education needs is a reason they choose to drive. These numbers apply beyond just rideshare companies too, as more and more Americans seek flexible work opportunities and ways to supplement income. 

That is why efforts to upend the independent contractor model are so puzzling. While the intent may seem good, many of the policies currently being considered to reclassify gig-workers as employees will actually cause real income loss for those choosing gig work. Instead of overturning a system that is working for so many, we should allow workers to keep the flexibility that they love, while finding ways to add new and needed benefits and protections. 

Thankfully, this is already underway, largely spearheaded by the companies themselves. Many of the app companies have come forward with plans to implement benefits including accident insurance and new worker protections and are outlining ways to provide these benefits without reclassifying drivers as full-time workers. 

And while there is no easy, one-size solution, this tailored approach is clearly preferred by drivers. In fact, 75 percent of drivers prefer a policy where they can pick and choose which benefits they get over a government-dictated policy where all drivers receive the same benefits. Governments and companies need to come together to find a scalable solution that will work for everyone.

It is more important than ever, when so many people are living through financial hardship due to the pandemic, that we enable new and creative income streams, as opposed to restricting opportunities because of some outdated notion of the term “employee.” Pursuing the old way of thinking that has allowed communities of color to be left behind time and again is the wrong approach. 

The National Black Chamber of Commerce remains dedicated to economically empowering and sustaining African American entrepreneurship and that includes protecting the rights of the new gig economy workers. The state of Black businesses is dire. According to a Global Strategy Group survey, just 12 percent of Black and Latino business owners who applied for aid received what they had asked for. Twenty-six percent said they received only a fraction of what they had requested. Half say they anticipate closing in the next six months.

These are dark times and we must embrace new technologies and new avenues to help communities of color survive.

Between one third and one half of workers in the so-called “gig” economy are people of color. Due to COVID, more than 40% of Black businesses and a third of Hispanic businesses have closed since the pandemic began, most of them permanently. Many of the remaining Black restaurant and businesses who have managed to keep their doors open, virtually or otherwise, rely on gig economy platforms like ride sharing and food delivery apps and other on-demand networks, to stay in business.

With second wave of COVID infections expected in the coming Winter months, now is not the time to disrupt the economies of communities of color that rely on gig work to pay bills and support their families.

(Harry Alford is the Co-Founder, President/CEO of the National Black Chamber of Commerce. Kay DeBow is the Co-Founder, Executive Vice President of the Chamber.)


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