I am convinced that it is time for a new framework that supports independent contractors. My belief is firmly validated by the nearly 18 million (and growing) who have chosen independent work.
It is time for an infrastructure that helps these independents pay their taxes, and provides them access to benefits. We need better systems and processes to educate, calculate and ensure that the fully burdened costs of self-employment are integrated into independent work arrangements.
Further, consumers of independent contractor services must pay for the fully burdened costs. This will allow solo business owners to operate responsibly. The risks of misclassification, class actions, and tax penalties can also be greatly reduced if not avoided.
With this framework in place, we will then have a free market but without the danger of disintermediation of the costs for the basic needs that our society believes all working Americans need (and without the over-reaching, confusing and costly regulation imposed by various labor and tax laws).
At MBO Partners, we have created such a platform and we call it "portable employment" that is part of an entire "Business Operating System" for Independent Contractors. Working for many clients at once, rather than a single employer is a strategy many Americans are using to safeguard against the vagaries of the economy. This is a good way to diversify your income stream but we need the systems and funding mechanisms to keep the costs and benefits where they need to be. We need a process that precludes the disintermediation of taxes and worker- required benefits.
While the way we work has expanded, our society still depends on taxes and worker benefits. Private industry must step up with innovative solutions how the new economy can fund costs inherent to work, rather than think it can be avoided, disrupted or hope that government will fix it.
Finally, we need to be careful of government's solution to this problem. Even if the market can wait for it, the government can only develop a broken, one-size-fits-all solution. The right solutions need to be tailored to particular industries and occupations and fit the needs of each group. The future of work is here and it opens up a whole new world of opportunity for us all.
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