By Rob Roper
Vermont is a tougher than average place to make a living. No secret there. One of the first questions you get from folks you meet is, “You live here full time? How do you make it work?” Some of the answers are necessarily creative.
Vermont is a great place to live, but it comes with sacrifices. There are fewer career paths, a lack of high-paying jobs overall, and lower pay here for doing the same job in another state. So, lots of people telecommute. Many work multiple jobs. Some rent out their homes over the holidays to generate extra income (or, more likely, to pay their exorbitantly high property taxes).
According to an analysis by the Small Business Administration, in 2011 small businesses represented 96.3 percent of all employers in Vermont, and of them 76.3 percent had no employees (other than the owner). We have a lot of entrepreneurial people working for themselves.
Given these characteristics embodied by our citizens and our employment environment, state law should do more to reflect, accommodate and build on the dynamic aspects of this reality. How can we make it easier for the person who is a sole proprietor of a landscaping business, doing odd jobs on the side through TaskRabbit, and renting out a spare room through Airbnb in order to get ahead?
One way is for Vermont to make it easier for individuals to classify themselves as independent contractors. Right now it is difficult, as the state prefers to pigeonhole someone as an employee who works for an employer. This makes it easier for bureaucrats to enforce mandates like employer-provided health insurance and workers’ compensation, but this no longer reflects the reality of how people live, either as workers and consumers.
This was (and is) a big issue with Uber in Burlington. Uber drivers consider themselves to be independent contractors, and, as such, have a great deal of flexibility as far as work hours and schedules. They drive when they want to drive, and don’t when they don’t. Uber contends that they do not employ these drivers, but merely provide a service platform that allows the sharing of information between customers and drivers. The city, however, would rather the drivers be considered employees of Uber — as would Uber’s competitors, who are stuck dealing with the city and its old-economy, costly mandates.
The solution, of course, is to unburden the traditional taxi service model, not saddle the new, innovated, effective and highly popular sharing platform.
Another way is for Vermont to join the 25 other “Right to Work” states. Passing a Right to Work law would guarantee that no Vermonter could be compelled, as a condition of employment, to join or not to join, nor to pay dues to a labor union. Now, Vermonters who choose not to join a union can be compelled to pay 85 percent of union dues as a so-called “agency fee.”
This is an incredibly unfair policy. Unions argue that non-union workers still benefit from the collective bargaining rights of the union and legal representation under certain circumstances, calling them derisively “free riders.” The fair solution would be to make workers who choose not to join the union responsible for negotiating their own wages and benefits separately from the union, and to release the union from any obligations it currently has in regard to non-unionized employees.
In addition to common sense justice of Right to Work laws, the overall outcomes in states that have them are compelling: faster economic growth, more jobs, a growing working population, and greater purchasing power per dollar.
The way the economy functions is changing, and with it the way we live our lives, both as workers and as consumers. The new sharing economy, driven by dynamic and innovative companies like Uber, TaskRabbit, Airbnb and many others offers compelling opportunities for hardworking people, or folks with assets that are otherwise not being efficiently utilized.
Vermont is in a unique position to take advantage of this information technology revolution for a couple of reasons. One is that we should. The idea of a “sharing” economy that more efficiently uses resources is one that fits neatly with Vermont’s small, tightly-knit communities and culture. The other is that we must. In a state where jobs are hard to come by, incomes are lower, and costs of living high, we owe it to ourselves to open as many doors to opportunity as possible and to remove as many barriers to employment and entrepreneurialism as possible.
Rob Roper is president of the Ethan Allen Institute, online at www.ethanallen.org.