Portable Benefits in the 21st Century Workplace

The rapid acceleration of technology, social changes, and flexibility in the work place — especially among millennials — has created new challenges in public policy. The conventional model as we know it is changing. Many Americans no longer hold the same job for several decades and, along with that, do not have access to employer-sponsored health or retirement benefits.

As New Democrats, we care deeply about benefits for all workers, regardless of their employment status, and how they put together the pieces that allow them to earn a living and succeed in our country. To better understand the challenges of bringing benefits to more workers, the New Democrat Coalition Future of Work Task Force held its second public forum, focused on portable benefits, featuring David Rolf, International Vice President of SEIU; Althea Erickson, Etsy Global Policy Director; Jamil Poonja, Senior Growth Strategy Manager at Stride Health; and Al Fitzpayne, Director of the Aspen Institute Future of Work Initiative.

“Over the course of the 20th century, the traditional contract between employers and employees was established that provided workers with key benefits and protections, helping to reduce economic insecurity and provide a pathway to the middle class. This social contract has eroded as the nature of work has changed,” said Al Fitzpayne, Director of the Aspen Institute Future of Work Initiative. “The legislative efforts of the federal and state levels are important first steps in what will hopefully lead to greater equity between traditional and independent workers and allow workers to not have to choose, as they do now, between flexibility and security.Read more from the Aspen Institute in their report about portable benefits.

Jamil Poonja, Senior Growth Strategy Manager at Stride Health, pointed out that the industrial revolution shifted the workforce from self-employment to payrolls, and the digital economy might be shifting us to more independent work. He went on to say, “I think that portable benefits can do a lot, including unlocking a new generation of entrepreneurs, and also broadening economic opportunity, giving people the flexibility to choose how they want to work, which many don’t have the opportunity to do today.” Independent workers want more flexibility and more opportunity, and the New Dems are committed to working on measures to ensure a stable economy for our country as it adapts to the the changing workforce structures.

New Dems agree that we need to create an easy and common way to tweak existing programs and expand our understanding of contingent workers beyond the service sector. Althea Erickson, Etsy Global Policy Director, said it best: “We need to broaden the conversation and start articulating alternatives that work just as well for Uber drivers as Etsy sellers, graphic designers, and home health care aides alike.” She added, “Our proposals begin from the basic premise that everyone needs three things: first, a single place to manage benefits regardless of income source; second, a simple common way to fund those benefits; and third, a short and common way to manage income volatility.” New Dems are dedicated to finding policy solutions for the problems that entrepreneurs and business owners face in the new economy.

“I suspect many small businesses would rather spend their time doing what they opened their businesses to do, rather than shopping for 401k plans or health insurance plans,” said David Rolf, International Vice President of SEIU. New Dems agree that we must reduce red tape for business owners and entrepreneurs so that they can thrive. “We now see another generation of the fragmentation of work driven — by a large measure — by the economic incentives in an employment system that treats all benefits and rights as a focus of an hourly waged job as opposed to human rights and civil rights,” said Rolf, who recently authored this piece on portable benefits.

New Democrats, per the panelists’ recommendations, will explore policy solutions to address these rapid changes in the workplace. Panelists urged Congress to move to a portable benefit system by creating a federal benefits portal — hosting everything from healthcare to retirement savings — that is owned by the government on the backend and open to the private sector and unions on the front end to create a simple, user friendly system. Another option would be to create anaccount which would combine all of a worker’s existing tax savings accounts into one fund, and could be used for qualifying expenses such as medical expenses. The experts also recommended developing a wage insurance program for independent workers by replicating the unemployment insurance full-time employees have expanding the Earned Income Tax Credit (EITC), and creating an innovation fund administered by the Department of Labor to help governments and nonprofits explore the issue and its solutions.

The Future of Work Task Force will continue holding public forums to investigate changes in the economy and work. The next forum will focus on 21st century skills training and take place on Wednesday, July 19th at 9am EST. Tune in to watch the live stream here.

The discussions at these forums will help serve as a foundation for the Task Force to build out policy priorities in the future.