There are nearly 60 million gig economy workers in the U.S. workforce, yet benefits like health care, retirement, and paid leave are still tied to traditional salaried jobs. It is essential that we adopt new policies guaranteeing all workers the basic level of economic security necessary to sustain and grow the American middle class—and with it, the economy as a whole. This week, Senator Mark Warner and SEIU 775 Benefits Group Executive Director Abby Solomon imagine what a shared security system designed to fit modern flexible employment realities might look like.
Senator Mark Warner is the senior U.S. Senator from Virginia. He serves on the Senate Finance, Banking, Budget, and Rules Committees as well as the Select Committee on Intelligence, where he is the Vice Chairman. From 2002 to 2006, he served as Governor of Virginia. Senator Warner spent 20 years as a successful technology and business leader in Virginia before entering public office.
Abby Solomon is the Executive Director of SEIU 775 Benefits Group, overseeing trusts for training, health, and retirement benefits for Washington state’s Home Care Aide workforce. The Benefits Group provides portable benefits to 50,000 home care workers. Previously, Abby was the Director of Home Care Campaigns at SEIU, where she led national advocacy campaigns representing 1.9 million workers and 100+ occupational fields throughout the United States and Canada.
Shared Security, Shared Growth: https://democracyjournal.org/magazine/37/shared-security-shared-growth/
Portable Benefits for an Insecure Workforce: https://prospect.org/article/portable-benefits-insecure-workforce
Building a portable benefits system for today’s world: http://seiu775.org/building-a-portable-benefits-system-for-todays-world/
Mark Warner: You have a third of the workforce with no social insurance, that to me, is a recipe for disaster.
Nick Hanauer: We definitely need to get to a system where if I work for an hour for a company, I get an hour’s worth of benefits.
Zack Silk: There is an interrelationship between healthy, robust economies and places that have high labor standards.
Abby Solomon: When we invest more in services and supports, it helps everybody.
Speaker 5: From the offices of civic ventures in downtown Seattle. This is Pitchfork Economics with Nick Hanauer. It’s like Econ 101 without all the BS.
Nick Hanauer: I’m Nick Hanauer, founder of Civic Ventures.
Zack Silk: Hey, I’m Zach Silk and I’m the president of Civic Ventures.
Nick Hanauer: In this episode of Pitchfork Economics, Zach and I are going to talk about something that’s been described as portable benefits. What are portable that benefits Zach?
Zack Silk: Well, it’s the idea that when you work, you normally have a set of benefits that are associated with you that’s already been established as a social contract between an employer and employee. Those current benefits are actually stuck to you, vis a vis your employer. And one of the things that we’ve been thinking a lot about is that the nature of work has changed so dramatically that it’s very rare that you have one employer that you carry throughout your life. And so we’ve been sitting around in our office thinking about for some time really if the nature of work is changing, the nature of benefits has to change.
Nick Hanauer: That’s right. And so, but one of the things that has made this issue come to the fore is the emergence of the gig economy.
Zack Silk: That’s right.
Nick Hanauer: Right? Uber and Lyft and all these other companies, although to be fair and accurate, the misclassification of workers as contractors proceeded this by 20 years.
Zack Silk: Yeah. That’s right.
Nick Hanauer: This has been a process that is evolved over time where we used to have an economy where basically everybody went to work, worked more or less full time and got a bunch of benefits including healthcare and vacation and retirement and all that stuff. So the nature of work has changed as the economy and technology has evolved, which has enabled companies to make people more effective contractors. At the same time, the giant holes in our labor standards construct gave employers incentives to make employers contractors at the same time.
So there’s a massive incentive, for example, for Uber to call all of their drivers independent business people, which is a joke rather than employees because if their employees, there are a bunch of costs associated with that and basically their business model can’t function or certainly not nearly as well if they have to actually take care of the people who work for them. We coauthored a piece with our friend David Ralph, a couple of three years ago called shared Security Shared Growth, which outlined basically a new construct of labor standards centered around the three basic principles. Benefits should be universally applied. Everybody should get them, they should be prorated to the number of hours that you work and portable with you. This is a crucial innovation in an economy where more and more work isn’t 10 years of working for the same company, eight hours a day where people move around and have multiple jobs at the same time.
Approximately a third of all workers are in that boat now. And so we have to find a way to build a social contract that addresses their needs as well.
Zack Silk: Yeah. I think the social contract that people had, and they have in their head and part of the reason they’re frustrated is that social contract was designed for a 20th century economy.
Nick Hanauer: Yeah.
Zack Silk: And we just don’t have a social contract that’s appropriate for a 21st century economy, right. Part of which is people are doing gig contingent work. They’re often doing more than one job, and we need a social contract that meets that need. And one of the people that’s working on that in the country really at the forefront is Senator Warner.
Nick Hanauer: Is Mark Warner.
Zack Silk: Yeah. I’m super fired up to get to talk to our next guest, who’s an old friend of mine, Virginia Senator, Mark Warner who goes way … But he has a deep and old connection to Seattle through the wireless business. He was a partner of some of my friends, the McCaw brothers who founded McCaw Cellular. So I’ve been working with Mark for a long time, so it will be fun to talk to him about portable benefits.
Mark, you’re one of the leaders in Congress on this issue of portable benefits, which is such an important issue to deal with in an economy where more and more workers don’t basically have traditional work relationships. So, tell us about your thinking on that and we want to explore some of the bills that you’ve developed to try to address these issues and problems.
Mark Warner: Well, I was got interested in this subject at the beginning of 2015 as we were seeing a continued transformation in the economy when there was the beginning of the company’s of the so-called gig economy companies, the Ubers, the Lyfts, the Airbnbs. I got fascinated about the changing nature of work and the fact that the old economy model where people go and work for the same job throughout their career. My Dad worked for the same company for 38 years, seem to be disappearing. And there were upsides of the ability to monetize your labor on an as needed basis. But there was also a deal of downsides since the social contract we created in our country, uh, back in the 30s and 40s, which was a deal between business, labor and government that said, “We’re going to give you these business, we’ll give you healthcare and retirement and the government will provide you with an employment workman’s comp, disability and other benefits but the requirement for that is you’ve got to be a full time W2 employee.”
And we’re now seeing what started with interest in 2015, and I know you Nick and David and others have been active and probably the most active state has been in Washington state on this subject started saying, “Hey, not everybody’s going to be a W2 employee. In 2018, 2019 timeframe, about a third of the American workforce has some level of contingent work, whether it is gig part time or independent contractors or for that matter, a lot of the gig work is not necessarily new for a whole group of poor Americans who have had to do lots of side hustles for years. But if you’ve got a third of the workforce that doesn’t have any kind of social insurance, any social benefits, then even when the economy is good as it may be now, you don’t see the downside. But the economy takes a turn dip down and you have a third of the workforce with no social insurance. And that to me is a recipe for disaster.
So I put forward legislation to build on what you guys had built in Washington state and elsewhere to say, “We’re probably not going to pass a federal law to start, but let’s go ahead and do some experimentation at state and local levels all around the country so that we can try out different points of view benefit models. My goal would be to make sure, no matter what kind of work you do in no matter what setting, it out to come with benefits and can we get you to that position and maybe avoid all of the fights around labor classification.” And I think Organized Labor is doing the job on fighting for some of the abuses that have been taking place in the labor classification battle. But I’m not sure we’re going to settle that right away. So in the meantime, let’s at least make sure we’ve got the options and I would hope ultimately the requirement that for every dollar you make and work some portion of that dollar is set aside for benefits.
Zack Silk: Right. And I think one of the principles that is worth underscoring there a couple of principles that are worth underscoring. The first is portability, which is to say that in a world where people may have a lot of different jobs or several jobs simultaneously, we need to do is be able to find both policies and mechanisms to enable people to put the benefits that they get from work somewhere and take them with them from job to job. Right?
Mark Warner: Absolutely.
Zack Silk: Because in the old model, that’s the thing. Is then the old model, the benefits sit with the employer and if you leave the employer, you leave the benefits.
Mark Warner: If we’re in a portability. We’ve got to have them somehow attached to the worker, and be able to move, and in many ways, the good news and bad news is, the good news is I think there are now a number of states who are proposing legislation in this way. The bad news is there’s been very little real experimentation and in many ways I think what’s happening in Washington State with paid family leave, maybe one of the first times that we’re actually putting more than pen to paper on, all right. How do you actually implement a program like this where that paid family leave attaches to the worker no matter where he or she may be in their work cycle?
Nick Hanauer: Curiosity, senator, what your bills are doing, if I understand you correctly, is it’s going to encourage states to do more of this experimentation. Is that what you’re-
Mark Warner: Yeah, it works … On the first bill and there’s, I’ve got a series of different bills, but the first bill, the base bill was, let’s just put up some resources, Federal Dollar Resources, about $20 million, which is tiny in terms of a overall federal labor department spending to try to spur experimentation. I’ve gotten some Republican support, I’ve gotten a lot of democratic support, but we’ve not been able to move it through since Congress is not exactly being the most productive of these days. I know that many of the debates on this issue in many states have turned though into what even you’d cut up the federal government when there’s been efforts at state levels to move on this portable benefit. There has been some challenges where a lot of traditional labor wants to keep this personal labor organization, want to keep the battle around labor classification, where some of the companies might be willing to provide benefits, but they don’t want to get into the labor classification battle. So is there a way to maintain the battle on labor classification but do a little bit of a timeout at least to try some experimentation on, on a benefit system. Because my fear is, we can see a downturn and when the downturn comes in the economy and you got a third of the workers who have no social insurance, when the stuff hits the fan as it always does, you’re going to have an awful lot of pain and disruption that can only, and it doesn’t need to happen.
Nick Hanauer: As ambitious and aggressive as I like to be. It’s just unambiguously true that this transition to a different benefits model will be complex and there’ll be problems that will come up that we won’t anticipate. And it took a lot of negotiating in Washington State, for instance, for David Rolf from SEIU, me and, Dara, who is the CEO of Uber to sign a memorandum of agreement to at least begin to pursue some of these experimentations here in the state. But just, it’s super complicated.
Mark Warner: Yeah. I commend you for doing it. And it seems, there’ve been other efforts. The Machinists, the Uber were trying to do some of this in New York, but it hasn’t really moved as quickly. So I think, the area to get at least top line agreement that we ought to have a benefit system that meets the workforce where they’re going to be in the 21st century. I think you can find pretty wide agreement. But once you go past that top line, it really, it gets, as you’ve seen Nick a lot more difficult and a lot more challenging. And even the normal alliances in terms of folks who want to make sure workers have social insurance and protections don’t always play out as one might expect.
Nick Hanauer: That’s for sure. So there’s another principle at play that I think it’s worth surfacing is proration. One of that which is to say you get an hour’s worth of benefits for an hours worth of work and that is not how our current system is set up. Right?
Mark Warner: Absolutely.
Nick Hanauer: Yeah. Where we have this cliff arrangement where if you work less than 29 hours a week or less you basically are excluded from benefits in most circumstances, which has given employers massive incentive to make people part-timers. And I’m sure that that system was set up with the best of intentions, but it has definitely sub-optimized our working arrangements. But we definitely need to get to a system where if I work for an hour for a company, again an hours worth of benefits and that those benefits go into this portable construct that I can take it with me wherever I go.
Mark Warner: Right. Take with you. And there may be …. Yeah, and I think there are ways, and this would be some of the experimentation that would say, “There may be added benefits if you work more than a certain amount of time.” We shouldn’t be penalized to basically, as you said, have the cliff effect, whether it’s the 29 hours or the historical neo. And that was a compromise clearly made during the drafting of Obamacare to recognize the status quo where part time workers were not given healthcare that full time workers received.
So, there is some of this has to be … The system has to be shaken up here a little bit and there’s, I have no problem with giving some level of addition to the notion of full time permanent employees. But I think we all know very few people are going to go work for the same job for 38 years like my dad did. So let’s make sure that there is at least a floor that all workers will receive based upon the time they work. Again, I would argue that goes ideally to even folks right now who are happy with their independent contractor status and don’t we see benefits, but I think that’s not a good social longterm position to be.
Zack Silk: Yeah. One of the things, senator, that Nick and David wrote this piece some years back now, and as part of that, the illusion in it was providing some sense of security is good for the economy, which I think you’re also talking about here.
Mark Warner: Yes.
Zack Silk: I assume that part of, part of your thinking is that this social contract was originally put place of course, partially to help people, but also because it provided stability to the economy. When things go wrong, people don’t just fall off that cliff. Right? I mean, I assume this is part of your idea.
Mark Warner: They don’t fall off the cliff. And also, as you said, Zach, it also promoted longer term employment, in the be as we get in the part of the benefits restricted the flow of labor from one job to another because how many times, particularly pre Obamacare, did people said, “I’d love to change my job when I can’t lose my healthcare.” And I think that there was some stability with that. And I think we need to promote economic stability, but both by choice and economic necessity, that kind of golden handcuffs approach of saying you’ll only get benefits if you work full time is not a viable longterm option in an economy where, again, by choice or economic necessity, people are going to move around and they’re going to potentially even have the variety of income streams at the same time.
I don’t think the notion of somebody that’s driving Uber being an IT consultant at the same time trying to start their own business and renting out their apartment, Airbnb, that is going to become more the norm than the extraordinary exception. And we need to make sure that those folks are included in some level of social insurance.
Zack Silk: Yeah. If you have a system that is, I think the three fundamental principles is universally applied. So for any work, there will be benefits that is prorated to the number of hours that you work and is portable for the worker. If you have a system like that, I think you’ve basically, covered your bases. But then I think that the big question that people often ask is, okay, well who pays? And I have my own answer about who pays. But have you thought that through?
Mark Warner: I think it is some combination and that’s why I think the experimentation model is what I was hoping to see. I know in some of your conversations in Washington state when David was at FCIU and advocating for where the bid and the ask was, was compared to the cost of a fully loaded worker, which most businesses will say will range between 25 and 38%. I know David and I see how you would come in and apply. We don’t want a lower number, but I think that’s where the rub is going to come in. Yeah, it’s what is the contribution from the worker? What is the contribution from the payer?
I think there is … I believe there needs to be some level of mix. I do think some component of it, some worker contribution should be part of it. And I do think this is where you could be accused of nanny ism by saying to the worker, “Hey, no, we need to incent you to put some hard earned dollars into a benefit package.” But there also has to be a contribution from the payer.
Zack Silk: Yeah. Ultimately, the economy pays and how the economy pays is really a consequence of how much power power workers have relative to owners of capital. And if we have an economy in which people are fairly treated, then it’s not going to be that hard to come up with the money to adequately fund benefits for workers. And if we live in an economy where workers have no power and live with basically stagnant or declining wages, then that money is going to be very, very hard to come up with. From my own point of view. I mean, what’s just unambiguously true about our present economy is that rich people are extracting an incremental two or $3 trillion of more from it than they were 30 or 40 years ago. And unless we can get that back into balance, all of this is academic. That’s the high order bit.
Mark Warner: Yeah. And that’s a data point that I think even some of the folks at the very top are starting to recognize.
Zack Silk: Yeah, right.
Mark Warner: I worry at times that some of the folks at the very top who’ve been willing to acknowledge these problems or many of the prognosticators divert back to what if we just improve education. And I think that’s necessary but not sufficient. So, I do think we need the benefits. And I do think the other area that I’ve been spending a ton of work on, and I think I think it is maybe as big an idea, if not potentially bigger than even the portable benefits concept, which is every employer in 2019 business leader will often say their biggest asset is their workforce and their human capital. Yet then we have nothing in our tax code accounting system or public company reporting system that wins incent any rational employer to invest in human capital, which is a complete contradiction.
And in particularly in a world where if people aren’t going to work for 35 years for the same firm and if they are going to have a variety of careers, it’s not economically irrational for an employer to say, “Well, why should I, why should I bear any of that costs?” And so you’ve seen as a percent of business spend, workforce training dropped dramatically. And even candidly, sometimes governmental training is good, but not always the best, and it doesn’t have great metrics.
So the other idea I’ve been working on is, how do you standardize or how do you at least equalize investment in human capital investment and human beings with investment in tangible goods? And I used the example of, 40 years ago there was a radical concept to create an R&D tax credit and folks in the accounting and in the business world said, “Well how do we put a number on research that’s too nebulous?”
Well, it took some work, but we figured that out and it drove dramatic dramatic investment. So I’ve got legislation now that would create the R&D tax equivalent of investment in human capital so that if a company actually invests particularly geared towards low and moderate income workers, if you invest in the up skilling and you’ve got to have appropriate metrics in place and training of that workforce, you’re going to get a tax credit.
We’ve started engaging with the SEC and they’re actually moving even under this administration to have public company reporting on their investments in human capital. And we’ve at least started the conversations with the accounting industry about, could we think about this even as, as an asset class? Because it’s pretty easy to make the case that when right now with our existing tax and accounting rules, if you spend $5,000 on a robot, you get a tax credit, you may have eliminated a few jobs. You had an app that you can put on your balance sheet as a public company, you can brag about it. You spend the $5,000, same $5,000 on human beings, skilling them up and making them better workers. You’ve got a cost, you’ve got a liability, there’s no asset. You get no tax credit, you get to deduct it, but you get no tax credit. And there’s enough already incentives against human beings that we shouldn’t stack the deck even more tax accounting and public company reporting wise.
Zack Silk: Yeah, that’s exciting. Senator, what kind of opposition have you faced? Both, I assume inside the capitol, but also outside?
Mark Warner: What I’ve found is interest, but I’ve been working for some time and I was hoping to have it laid out before the end of the summer and it’ll probably be after Labor Day. The problem has been, I don’t think the federal government yet ready to sanction, but there has been some reluctance even from some of my friends on Organized Labor because they fear if folks were working part time who are not full time employees get benefits, they may not be able to be then fully classified as traditional W2 employees and benefits is only one part of I think of a workers’ needs.
I think a worker does have a right to have a voice in organizing. The worker does have a right to have a voice in issues like scheduling and over time and a host of other basic protections. So convincing my friends sometimes on Organized Labor to recognize, well, let’s at least experiment on the benefits side because nobody’s doing better with a third of the workforce operating with no safety net underneath them at all. And then you’ve got some of the traditional forces on the Republican side who may pay lip service.
But anything that would talk about adding more cost to any employer, because I do believe there would need to be a employer contribution on this, there’s resistance. That all being said, I think there are very few people other than those on both into the political spectrum may be caught in the 20th century that don’t acknowledge the very nature of work has changed and we are going to need to think about a new social insurance. We’re going to need to think about our new investment strategy and that’s where I come to my tax and accounting and reporting. And we’re going to need to think about a business model that allows a company not to just think about the next 2 cents for the next quarter, but also still allows a company to be successful. But part of that success ought to be measured on how it treats its workers in its community that it works in.
Zack Silk: Yeah, I agree. So we’re coming close to the end of our time with you, but we always love to ask this one question. Why do you do this work in particular? You made a good living as a, as an investor and a business person. You had a great life. Now you’re in the United States Senate doing some very hard work. So what is it that brought you to the work? Why do you do it?
Mark Warner: Not to sound corny, but I have lived the American dream public school kid. First in my family to graduate from college, failed miserably a couple of times when I tried out a business, then did well. I get to do this. As frustrating as this job can be at times, I get to do this on terms that very few other people get to do at an Ali. I’m a senator, but I’m a senator from Virginia. I literally can see the capitol from the third floor of my house. I get to sleep in my own bed each night. I’ve got some financial freedom. I feel an obligation to try to make sure that the same kind of opportunities I had, the next generation of kids are going to have and particularly if those kids might come from a different ethnic background or might’ve been an immigrant to our country. But I think this notion that an American opportunity that we all have a fair shot is I think what is the secret sauce in our country. But for a whole lot of Americans that fair shot doesn’t exist today. I’ve always kind of had this bug, I went into business in many ways because I wanted to be able to have the chance to come back to politics and even with the frustrating days there are sometimes small wins when you do move the ball down the field, and I’m still hoping for a few more of those wins before I hang it up.
Zack Silk: I love it. Well, thank you so much for spending the time with us and thank you for doing the work that you’re doing because I know it’s hard.
Mark Warner: Well, Nick and Zach, thank you guys. Thank you for what you do as well and I continue to look forward to working with you on these ideas on a variety of the projects as we move forward.
Zack Silk: Cool. Okay man. Talk soon.
Mark Warner: Thank you.
Zack Silk: Take care. Bye.
Nick Hanauer: Thank you. Bye.
Mark Warner: Bye-bye.
Mia Kelly: My name is Mia Kelly. I am an Instacart shopper.
Speaker 6: [00:26:10]It’s an online service that brings groceries right to your doorstep.
Mia Kelly: I supplement my income by doing Instacart. You order groceries and I basically go to the store and shop for you, so it’s an easy way of getting your groceries when you don’t have the time to do it.
Speaker 7: [00:26:28]Basically works like Uber. People can sign up to be shoppers and fill orders for a fee.
Mia Kelly: [00:26:33]Who is your Instacart worker? Who is your shopper? Teachers. Your massage therapist is your Instacart shopper. Accountants. Who is your Lyft driver? Everybody working a second job. Everybody is working in the gig economy.
Speaker 9: What’s been getting a lot of attention in the media in recent years are the so called gig economy companies, Uber or Lyft, Grubhub, DoorDash, Amazon, Postmates, but that’s just the tip of the iceberg.
Mia Kelly: My understanding from individuals who are doing DoorDash and I’ve asked them why do they continue to stay if they know for a fact that their tips are being supplemented as income, “We still have to pay the rent.”
Speaker 6: Those who work for Instacart say they’re being treated unfairly.
Mia Kelly: When it comes to Instacart, I do not rely on tips at all. You do not know if you’re going to be able to even keep that tip because the customer has the option to delete that tip within three days. Nobody goes to a restaurant and then goes back three days later and say, “Give me back my tip.” But you are able to do that in Instacart.
Speaker 10: [00:27:40]Tips were being used by Instacart to supplement the drivers base pay, instead of being extra money in the driver’s pocket.
Mia Kelly: Whether you take a job from Caviar, Uber Eats, or Instacart, you need to know if you can do that job at all because if you don’t, you’re basically doing this job for free.
Speaker 11: There’s a big difference between a gig worker and an employee. As independent contractors, the gig workers might not understand the differences, but they all experienced the downside of not having employee benefits when they need them.
Mia Kelly: My day job is a tiny, tiny company that does not offer me benefits and I do not get any benefits at all through Instacart either. I had gotten injured, I actually called Labor & Industries or L&I to find out what was I afforded. I pay taxes just like you do, you pay at W2, but I pay a 1099. The thing about it is I’m not afforded the same rights as you are. I don’t have L&I. If we’re both taxpayers, then shouldn’t we both get it?
Speaker 12: [00:28:35]Everyone needs benefits no matter what. Medical, dental, vision, that all costs a lot of money coming out of pocket.
Mia Kelly: If anybody gets injured on the job, you’re going to be out, whether it be one week or two weeks or even up to two or three months. So it’s important to have portable benefits. We’re just trying to do the right thing for our own families. We’re just trying to make ends meet.
Zack Silk: I think this conversation can get really abstract, but the reality is that portable benefits and portable benefits systems have been working in this country for a long time. And actually many, many of them are administered by labor unions. If you think about the trade unions, particularly carpenters, that is some work that is not always predictable. And so they figure out ways to help one another out during times when work is slow to make sure that people continue to have benefits and continue to be supported. And here in Washington State we have an incredibly innovative union, SEIU 775 that has built an entire portable benefits program for their union members and it’s incredibly impressive. So I’m excited. Talk to Abby Solomon. I actually don’t know a lot about the way her program works, so I’m really excited to hear how the system works for her employees.
Abby Solomon: My name is Abby Solomon and I am the Executive Director of SEIU 775 benefits group. So we work together with employers, with caregivers and their union to deliver portable industry-wide benefits to Washington’s in home care workforce.
Zack Silk: And can you tell us why would that need to be?
Abby Solomon: Yeah, great question. So before caregivers unionized and before we formed this organization, caregivers, so folks who are in individual homes caring for seniors and people with disabilities, they had no access to things like health care or paid training for the skills that they needed. Certainly not retirement or job matching services or any of the other benefits that we provide today.
Zack Silk: In a pre unionized world. They were being paid for their work, but they didn’t really have any access to things that we would understand to be just normal benefits of having a job.
Abby Solomon: Exactly. It was a little bit like the wild west. So they went in and had no access to those types of things and as a result, turnover was high and the consumers, so people who are relying on these services had less security that they were going to be able to find someone who could provide this care. And we believe that this led to lower quality services and lower quality care because people are in and out and did not know if or how they would be able to access things like health care, paid training, retirement, other benefits that support them in their job.
At the same time, there are a number of employers, whether that’s a private home care agency or an individual senior or an individual with disabilities participating in the state’s Medicaid program, they didn’t really have the ability to offer and fund and administer these types of benefits on behalf of their workers. And so by creating an organization that brings people together, what we essentially did was enable employers to pool their resources, to pool their risk and to get economies of scale so that we could deliver these benefits consistently across the entire population so that caregivers could have more choices and flexibility, have more security, and to be able to enter this career with confidence that they’re going to be able to take care of themselves and therefore take care of the person that they’re serving.
Zack Silk: Yeah. So somebody might call this a win, win, win. Is that like, so the workers win they’re getting benefits security and things that they otherwise wouldn’t have had. The employers are winning because they get to pool together for economies of scale. And then obviously the people that are being provided care also are winning because they have more stable workforce who’s better at their jobs and more secure and throughout their care. Is that right?
Abby Solomon: Exactly. Yeah. And I would add that I work with a lot of employers and the employers that we work with are wonderful partners and what they do best is meet their business needs. So they want to focus all of their energy on figuring out how to serve seniors and individuals with disabilities in the community. And taking the burden of having to figure out all of these benefits makes their jobs easier and enables them to focus on the things that they care about.
And for caregivers, it makes everything seamless because they can enter the system, partner with us, get access to a number of benefits and they don’t have to worry about, I’m taking … I’m only working two hours for this client and I’m working 10 hours for this client. They know that behind the scenes, my organization is busy pooling all of that together and making it a seamless experience for them so that they can really also focus on their job, which is providing high quality care for people in their homes.
Zack Silk: Yeah. That’s great. Could you describe both the portability, and it also sounds like this is prorated in some way, they’re not working for a single employer. Is that commonly the case?
Abby Solomon: That is commonly the case. So in the state of Washington, people who qualify for our services can choose two ways in which to get their care. They can hire a caregiver directly. It might be someone that they know, a family friend, a neighbor or otherwise find someone to come into their home or they can choose to go to an agency and have the agency send them a worker. So it’s really about choice and how people want to find the person that they’re going to spend many hours in their home every day. All of our participating employers, which includes the state of Washington on behalf of individuals who hire their own workers, they contribute an amount of money that gets pooled into funds that then we use at the benefits group to establish eligibility criteria across all of our programs.
So from the first hour that a caregiver begins work, they become eligible for certain benefits. So at hour one they have access to paid training. That means that if they just want to become a respite care giver and just work a couple of hours a month filling in for folks, they get paid to take those couple hours of training that they need to become a respite caregiver. If they plan to go on to become a standard home care aid that’s certified by the state that you hold the actual certification, you sit for a state exam, we provide support for you all the way through that, including paying for your training. Then you take that, that becomes a portable benefit in that that certification allows you to work for any employer in the state. And you can take that with you to any number of private home care agencies and you already have that.
If you work 80 hours a month, you can do that by working for one person 80 hours a month. You can split that between a home care agency and a self directed consumer. You can cobble those hours together any way that you like and as long as you meet those criteria, then you’re eligible for our comprehensive health plan, which gets you vision and dental for a very affordable price. Our Co premium is just $25 a month for the caregiver and they have access to that. So from their perspective, they can go in and out at any time, work any hours in any of our participating employers. And all of that gives you access to the same basic benefits. If you work for longer than six months, then you begin receiving contributions into your retirement account. And that’s one retirement and account that all of the employers pay into.
Zack Silk: Oh, great. So you don’t have to have a piecemeal. I have a 401k with this and I have a 401k with that, and somebody is giving me distributions here. It’s all taken care of in a central way.
Abby Solomon: Exactly. All of the benefits are consistent and standard across all the categories of workers that we work with. The difference is really how much you work and what services that you need. So some people may choose to get their healthcare elsewhere. Perhaps they get that through a spouse, but they still want to take advantage of some of our wellness or safety benefits. So for example, we issue safety shoes. These are shoes that caregivers can wear in the home. They prevent slips, trips and falls. They are really focused on injury prevention both for the caregiver and the person that they’re caring for. So even if you don’t enroll in the health benefits, you may choose to access our safety shoe program.
So there are a lot of different benefits that different workers and caregivers take advantage of really depending on their needs. We have peer mentorship services that help coach people on the job and help make sure they get through the training programs if they’re trying to further their education. We have advanced training programs for people who care for folks that have more complex needs. So there’s a variety of services and supports that people may take advantage of depending on their situation, but we also serve family caregivers who may just be, working a few hours a month and are really looking for their benefits through other employment.
Zack Silk: Yeah. I want to return to this question so I can understand why employees want to participate in this. Can you say it again? What is the benefit of the employer? It seems like there’s a lot of benefits to them.
Abby Solomon: Absolutely. So employers really depend on having a robust workforce that is ready to work, that is qualified to work, that is trained, has the skills that they need, has the confidence that they need to do this job. They need workers, caregivers who are healthy and able to meet the growing needs of the population that they’re trying to serve. And having benefits is a big part of recruiting and retaining staff. So none of our employers are really able to offer these types of benefits on their own. So if we have a home care agency that employees a 100 caregivers, it’s unlikely that they are gonna figure out how to partner with a shoe distribution company to find the appropriate non-slip safety shoes to help caregivers prevent injury on the job. But they benefit a lot if their caregivers are not slipping while transferring someone out of the back, injuring the person that they care for an injury in themselves.
So that is a big win for our employers, not having to find and negotiate a health plan is a big win for employers. At the same time, all of this invests in having people that are available and ready to work. There’s a pool of workers by having the same training standards across the entire industry. They know that anyone who’s been … If they hire someone from another agency, they don’t have to retrain them. That person has already been through the same training program. They really get economies of scale. A number of our agencies will just have a handful of hires on any given month, and so to put together a full training cohort, their workers get to sit side by side with other workers and have the full learning experience as they move through our training programs. So there are a lot of benefits for the employer.
Zack Silk: And this allows them to, I assume this allows the employer and they’re focused really on the thing that they care most about, which is providing a service and being paid for that service. They don’t have to worry about becoming into HR shop or nonslip shoe negotiating firm, and they can really focus on really providing care. I mean, that’s the real value proposition that they’re hunting anyway.
Abby Solomon: Yeah, absolutely.
Zack Silk: Yeah. Out of curiosity, so show how many people are covered by this? How many employees are there that are covered in this program?
Abby Solomon: We touch the lives of about 50,000 caregivers annually. We are the second largest training institution in the state of Washington behind university of Washington. This program is very unique. There are other states where caregivers have unionized and have been able to advocate for improved working conditions, higher pay and benefits. There are other training funds. There are other places that have elements of this, but I’d say we’re really at an example of a unique partnership where our employers have really come to the table. The state of Washington has really come to the table, and of course, caregivers in the unions have come to the table to really invest in this workforce and in recognizing the need to meet the needs of this population.
So one of the things that makes Washington State unique is that lawmakers here, advocates here, stakeholders, employers, caregivers, their union have all recognized the need to invest in these services for our communities. And that is really different than what I’ve seen around the country. Many other states, employer, individual employers, unions have made progress around the edges and certainly have won things like wage increases or individual benefits. But this is the only place that I’ve seen where all of this have been put together to really prioritize the needs of our communities.
Zack Silk: Now, that’s great. When you were building this, were you looking at other industries or other examples? Are there other places where this is being done? Other sectors, other industries?
Abby Solomon: Yeah, there are. It’s funny that you asked this. I’ve been hearing a lot about this new concept of portable benefits and can we do portable benefits, and is it feasible, and how would that work? Yeah. But in reality, unions and employers have been coming together for decades to do this. So we’ve seen models that look like this in construction trades. And building trades, and healthcare, really anywhere the employers and workers and their labor representative want to come together. They have the ability to do this. So we looked at a lot of those models, but we also looked at our unique population because the needs of our population are a little bit different in terms of people working in non traditional jobs, working non traditional hours. We looked at some of the models that were out there and we took what we could to replicate and then we added our own experience working with this specific population.
Zack Silk: Yeah. So do you feel like what you’re doing is replicable in other industries or other places?
Abby Solomon: I do. Really what I see as the secret sauce that’s making our programs work. It’s just partnership and it’s really about the willingness for people to come together and figure out how to solve things that we can’t solve on our own. And this was just a really clear example of that the employers couldn’t solve this and workers couldn’t solve this on their own and the union couldn’t solve this on their own. And so coming together, the solution may look different for each industry, but we’ve found ways, every time something comes our way, we think, “Okay, well, that’s an interesting problem. Let’s test a few solutions, let’s pilot some things, let’s find out what works and then let’s scale it. And I think that’s something that’s replicable in any industry as long as people are willing to work together.
Zack Silk: Yeah. And I think one of the great things about what you’re describing here is that so often these things are put in this adversarial, what’s good for workers must be bad for business, but that’s just bullshit. But often what’s really good for workers is actually really good for employers too. And this is one of the ways that we can get at that where everybody wins. I mean, they don’t have to worry about running complicated HR programs or training programs and the employee gets stability and gets access to benefits and that allows them to do their job well. And when they’re doing their job well, the employer has a better experience with their client. So the whole thing works as a great ecosystem.
Abby Solomon: When you think about it like that and take it one step further into the fabric of our economy, I read a lot about employer benefits and employee benefits. And regularly in the employee benefits magazines there’s a lot of talk about employers who are grappling with employees who have senior care or childcare issues. So sandwich generation and what does that mean? And those folks, their ability to come to work and focus at work is impacted by all these things that are surrounding them. And so, when we invest more in services and supports, it helps everybody, even an employer who is not providing a benefit to a caregiver, if that caregiver is receiving benefits that is providing relief for their employee who is coming into work. That’s right. So all of these things touch each other.
Zack Silk: Yeah. The economy at the end of the day, of course it’s an ecosystem. And so each little part of it has an impact on the other. And I think one of the things that gets ignored here often, and we have this and all these things when whenever we have fights about labor standards is the employee or the employer and the business community think about it in this very narrow, how does it affect my narrow bottom line? But what they can’t possibly tabulate is the complex ecosystem they’re operating in. And when people are not exhausted or when they have more money in their pocket or when they’re able to not worry about the care they’re having to do in the morning and in the night, they are better and more productive employees on site.
And there is an interrelationship between healthy robust economies and places that have high labor standards. The places that have the highest labor standards turn out to be the places that have some of the ruminants robust economies in the world. And the reason is because exactly what you’re alluding to here. And unfortunately, employers and the business community have taken on this deeply adversarial approach to these things as opposed to figuring out how we can all win together. I do have really one last question, which is why do you do this work?
Abby Solomon: That is a great question. I do this work because I love being part of the solution. There is so much happening in our world today to be negative about, we all wake up every day, we all read the paper, we see what’s going on in our communities and in the world. And for me, I’m just one person, just one individual. But I love that I get to go into work every day and work together in partnership and collaboration, finding creative solutions to support people in our communities. So it’s just one small part, but I really feel grateful that I get to do this job and that it makes a difference in people’s lives.
Zack Silk: That’s awesome. Hey Abby, thanks for coming.
Abby Solomon: Thank you.
Zack Silk: So we have learned, uh, in our discussions with both Abby Solomon and Senator Mark Warner, that portable benefits are something we are in desperate need of-
Abby Solomon: That’s right.
Zack Silk: … In this country. But that’s a thing that I suspect many listeners understand intuitively as well, a huge proportion of our listeners have to be in some way touched by gig work, or contracting or misclassification in general. And it just, we are never going to build the stable, secure middle-class that the country needs order to thrive unless we have a labor construct that captures all of that, that doesn’t permit companies to make a third of American workers or … It’s going up every year, who knows? Maybe eventually it will be 100% contractors without access to benefits. And so we better get on it.
Nick Hanauer: Yeah.
Zack Silk: You know what? I’d really recommend is that people get educated about this. One of the best places they could go is read the piece that you and David wrote for Shared Security, Shared growth in the democracy journal. It’s a really well written piece. It’s really clever. It helps lay these things out. It’s a few years old, but interestingly, the politics have really caught up to where it was.
Nick Hanauer: Yeah, it was. It’s really remarkable.
Zack Silk: Three years ago or four years ago. Then the other thing of course is that we’re in the middle of a very exciting election cycle leading up to 2020. And people should start communicating about this, talking about it with candidates, talking about it with people that are running for office both locally and federally. One of the things that Abby pointed out of course, is that this is happening in States too. You don’t have to rely on the president of the United States and get this done.
Nick Hanauer: Right. Yes. Our own Jessyn Farrel from Civic Ventures was the prime sponsor of a bill in Washington State and at the state level to begin experimenting around with the portable benefits. And so, yeah.
Zack Silk: Yeah. The future of this. Yeah. Don’t wait. Get on it. The future of this is, excuse me, is really bright.
Nick Hanauer: And in the next episode of Pitchfork Economics, we’re going to talk about UBI, otherwise known as Universal Basic Income.
Speaker 5: Pitchfork economics is produced by Civic Ventures. The magic happens in Seattle in partnership with Larj Media. That’s L-A-R-J Media and the Young Turks Network. Find us on Twitter and Facebook at Civic Action. Follow our writing on Medium at Civic Skunk Works and peak behind the podcast scenes on Instagram at Pitchfork Economics.
And one more, you should definitely follow Nick on Twitter at Nick Hanauer. As always, a big thank you to our guests and thanks to you for listening from our team at Civic Ventures, Nick Hanauer, Zach Silk, Jasmine Weaver, Jessyn Farrel, Stephanie Ervin, David Goldstein, Paul Constant, Stephen Paolini and Annie Fadely. See you next week.