It’s time to upgrade benefits

The economic crisis sparked by COVID-19 resulted in historic layoffs and the highest unemployment rate since the Great Depression. Even now, while businesses are tepidly beginning to rehire, the U.S. has still lost millions of jobs since before the outbreak. To keep the economy afloat and buoy consumer spending, Congress increased the amount of unemployment benefits laid-off workers could receive by $600 per week while also expanding the types of workers who qualified. This was an important recognition that the nature of work has changed drastically in the past decade, but our traditional benefit systems remain tied to the 20th century.

As much as one-third of our workforce is made up of either gig workers, contract workers, or those who are self-employed. This can range from a Lyft driver to a plumber who runs their own business. When the pandemic hit, these workers were particularly vulnerable because they live outside the standard safety net that was built around a traditional employer-employee relationship. That makes it significantly more difficult to access benefits and protections that are normally provided to full-time workers, like paid leave, workers’ compensation, health coverage and retirement planning. 

This economic crisis requires us to rethink the outdated and rigid design of our benefit systems. Last year, Sen. Mark Warner (D-Va.) and I introduced a bill that would create a grant program to let states partner with local governments and the private sector to test out new portable benefit models to meet the needs of their changing workforce and allow workers to seamlessly transition their benefits from job to job. Seeing the once in a generation disruption in the workforce created by the pandemic, we updated the proposal in May to also upgrade antiquated state unemployment infrastructure so that all types of workers receive unemployment benefits in a timely manner.

There likely won’t be one right answer to this problem. Since the types of workers who would be helped by more flexible benefit structures are so diverse, we need to experiment with a variety of ideas. As we share what we learn, other states and the federal government can see what works and what doesn’t. In the long-term, this helps us build the best solutions for everyone. 

Look to Washington state as one of the boldest examples of this so far. In 2018, the state legislature proposed creating a portable benefits program for contract workers that would require companies to contribute to a benefits provider that would offer programs including health insurance, paid time off and retirement to these workers. The state would determine the total amount collected from businesses. 

What was surprising about this proposal was who was behind it. Uber and the Service Employees International Union, who are often on opposite sides of the misclassification of labor discussion, released a joint letter calling for policies that focused on five principles: flexibility, portability, universality, innovation and independence. Both the private sector and labor groups see the need for this change. This is an issue facing states and communities across the country and Congress should be the catalyst for a national redesign of benefit structures. 

Funding and resources are naturally a sticking point in implementing these proposals, especially right now. Many state and local governments are facing deep budget deficits because of the ongoing pandemic. The Washington proposal never made it into law in part because of its cost. Creating a grant program at the federal level would provide states the flexibility to implement these ideas without economic hardship. In turn, the federal government and other states can learn from their models.

Technology and innovation have changed the nature of work more in the past decade than in the previous century, resulting in a multitude of opportunities, and challenges, for workers and businesses alike. We must seize this moment to update the social insurance structures that protect workers, so they and their families are better positioned for the future of work. 

DelBene represents the 1st District of Washington and is a member of the House Ways and Means Committee.