Employees have seen increased access to some very unique and flexible work arrangements, but regulations have been stifling the new opportunities, a report warned Wednesday.
Employment looks radically different than it did just ten years ago. Technology and innovative new markets, like the sharing-economy, have challenged traditional employment practices like the nine-to-five job. The Competitive Enterprise Institute (CEI) warns in a report that outdated laws are creating challenges for employees in this new economy.
“Developed economies are moving away from that industrial model to more cooperative arrangements, such as contracting and the ‘sharing economy.'” the report detailed. “Thus, today’s economy is bound by laws designed for an earlier industrial era.”
The report adds that many of the earlier laws were meant to help workers in a time when there was a more distinct line between employer and worker. Traditional structures of employment have begun breaking down because employees can more easily go into business for themselves or contract out their work.
“We need to reflect what people actually want from work and how the institution is evolving,” the report noted. “Regulations designed for the corporate era are being wrongly applied to what are actually commercial market transactions.”
The report cites several incidents where innovative employment has outgrown the traditional model. The sharing-economy, for instance, allows people to build their own business venture through phone applications. Cellphones and digital technologies also make it easier to work from home or anywhere else.
“In order to enable the system of natural liberty to reemerge on terms set by individuals acting in markets rather than be strangled at birth by regulation designed for a bygone era, legislators and regulators will need to make certain policy changes,” the report noted.
The report makes several policy recommendations to help foster the innovative changes. It first recommends policymakers reconsider all laws that tie non-economic social goals to employment contracts. They should also reform the National Labor Relations Act which may be preserving unions and outdated laws.
“Union membership declined steadily, particularly in the private sector,” the report noted. “Yet management’s reaction to this change did not reflect a decrease of workers’ bargaining power. Rather, employees went from being viewed as ‘cogs in the machine’ to important assets whose creativity and potential could be sources of competitive advantage.”
Union membership nationwide has been in sharp decline over the decades. Federal administrators have issued rules with the express purpose of preserving unions and the older laws. Labor Secretary Thomas Perez, among others, has argued that building upon the existing regulatory system is critical to preserving worker rights.