President-elect Donald Trump’s rallying cry throughout the entire campaign has been to take down the establishment (“drain the swamp”). He has been particularly persistent about his promise to bring jobs back to America.
Unfortunately for much of America, these jobs he’s looking to create are not part of the new economy — which is service-oriented and technology-focused. Instead, he has consistently emphasized the need to bring back manufacturing jobs, millions of which have disappeared in the US since 2000.
The gig economy, on the other hand, is growing. The so-called “gig economy” — or the workforce that signs up for individual projects on-demand — relies on websites and apps like Handy, LinkedIn (LNKD), Uber, Lyft and TaskRabbit to connect them with jobs. Under Trump, members of the gig economy have an uncertain future, primarily because he has not addressed workplace protections for independent contractors.
Trump has been largely silent about a growing segment of the workforce — 35% to be exact. The number of people who identify as freelancers grew from 53 million in 2014 to 55 million in 2016. Even corporations are looking to hire contingent workers — according to the Intuit (INTU) 2020 report, more than 80% of large companies are looking to increase their use of a flexible workforce.
Of course, the gig economy doesn’t come without problems. In an economic speech last year, Hillary Clinton specifically cited problems with the sharing economy like the lack of workplace protections including paid sick leave, maternity leave and retirement benefits.
“This on demand or so called gig economy is creating exciting opportunities but it’s also raising hard questions about workplace protections and what a good job will look like in the future,” she said.
For his part, Trump has neglected any discussion of the independent job opportunities created by technology and the gig economy — though he has spoken out against regulations affecting companies that connect freelance workers with work.
The laissez-faire approach
Still, disruptors like Airbnb and Uber face unique regulatory hurdles from the local governments that they operate in, rather than regulations from the federal government. In other words, Trump could actually have very little impact on making it easier for companies to operate in a given city. But along with this anti-regulation stance comes his silence on workplace protections.
In a CNBC interview last year, he was asked specifically about his thoughts on Airbnb, given his career as a real estate mogul. His answer captures his laissez-faire approach on the sharing economy — he supports letting businesses operate freely as long as they don’t infringe on his livelihood.
“[Airbnb] is a very interesting thing that’s going on. A lot of people do like it. A lot of people are happy with it. A lot of landlords are liking it a lot. And then of course there are some groups, hotels in particular, that aren’t,” he said.
“Whether or not [Airbnb] should be regulated — I don’t like regulation. I’m not a person that believes too much in regulation. I think the concept is great for some people. I think it’s probably going to be successful over a period of time. I will not let it happen [in my buildings], but sometimes even if you say it can’t happen, you never know what people are doing behind your back.”
Aside from Trump’s stance on regulation, there may be one other thing that may give a reason for freelancers to feel optimistic about a Trump presidency. Under the Trump plan, independent contractors pay a 15% tax rate (compared to 33% as an employee). It might actually incentivize more people to join the freelance world, in an effort to pocket more of their earnings. Though we can surmise that members of the gig economy will pay less in taxes than a corporate employee, Trump’s plan makes no specific mention of protections for freelancers.
And these freelancers aren’t just members of sexy Silicon Valley startups like Uber and Airbnb. Aaron Lee, former Home Depot (HD) CTO and the founder of Recommended, a startup that connects small businesses and freelancers with customers, told Yahoo Finance that by refusing to address more than a third of the US workforce, Trump is neglecting everyday Americans.
“The gig economy is more importantly the on-demand workforce, the stay-at-home moms, the moon-nighters who build websites, the ones who learn how to do programming from Khan Academy — the freelancers, consultants, and contractors,” he said.
One thing remains clear — Trump does not fully appreciate the significance of the gig economy. Regardless of his plan to bring manufacturing back to the US, he can no longer overlook the new jobs keeping the US competitive in the global economy.
Melody Hahm is a writer at Yahoo Finance, covering entrepreneurship, technology and real estate. Follow her on Twitter @melodyhahm.
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