Gig Economy Rules and Impact of Technology on Employment

Whereas, the Texas Workforce Commission, in 2019, approved a new “marketplace contractor” rule that clears a pathway for “digitally-based” companies to designate their workers as independent contractors for purposes of unemployment insurance and other benefits; and,

Whereas, the Texas Legislature, in 2017, gave ride-sharing companies, such as Uber and Lyft, the authority to classify their employees as independent contractors, thereby stripping them of basic labor rights and protections and allowing the companies to evade payroll taxes; and,

Whereas, while workers have enjoyed rising wages tied to productivity gains resulting from technological innovation throughout most of American history, wages stopped rising along with productivity gains since the 1970’s; and,

 Whereas, recent technological innovations such as automation, robotics and artificial intelligence do not just strip workers of their benefits, they can eliminate entire employment positions; and, 

 Whereas, a study released by Oxford Economics in June 2019, predicts that robots could replace humans in 20 million positions worldwide in the next decade; and,

 Whereas, the same study concluded that the trend in automation would boost productivity and economic growth, but could result in greater income inequality; and,

 Whereas, a McKinsey Global Institute (MGI) report found that a third of the U.S. workforce (166 million people) will be displaced over the next 12 years; and, 

 Whereas, American workers have adjusted to job displacement caused by technological change in the past in a short amount of time, the worst-case scenario now indicates that economic disruption due to technological advancements could leave millions of human workers without work and income for many decades; and,

 Whereas, new technologies may very well prove to improve the lives of Texas workers, government policy at all levels is not prepared for the worst-case scenario of joblessness and financial inequality that could result from very disruptive shifts in our economic order;

THEREFORE, BE IT RESOLVED, that the Texas legislature determine whether the independent contractor and “marketplace contractor” status has benefited workers who work in ridesharing, digitally-based, or other gig economy employment; and,

 BE IT FURTHER RESOLVED, that local, state and federal government launch studies and hearings, and prepare policy proposals to address the potential impact of automation, robotics, artificial intelligence and other new technologies on Texas workers and their families.