CNBC explores the “greased slide” created by the new tax law, which encourages independent workers to embrace freelance work. Now those small businesses run by individuals can “pass-through” 20 percent of revenue untaxed to the business owner. It appears to be a great time to become a gig worker. However, the lost benefits that come with traditional employment more than offset the tax savings, Miguel Centeno of Shared Economy CPA told CNBC.
The article details the cost of going gig and demonstrates that contingent work is the source of all growth in the economy since the Crash. Besides lost health and life insurance benefits, the gigger gives up paid leave, sick days, and employer contributions to Social Security, among other valuable aspects of a regular job.
It is sobering reading for potential giggers. More importantly, it is a wake-up call for companies who have viewed the On-Demand Economy as a way of cutting costs and obligations to workers. The formulae for loyalty used to lie in the job benefits society seems to be abandoning. Worker retention and job performance excellence are still the keys to good customer experience and valuable products and services.
On-Demand companies must tackle the problem of portable benefits and the establishment of a meaningful relationship with workers that allows them to identify with the brand they currently represent happily. A worker may rep multiple brands during a single workday, but they still need to feel the pride and opportunity provided by a satisfying living wage with a path to retirement.
If companies treat On-Demand solely has a cost-saving strategy, they will drain the economy of consumers. That will backfire on everyone.