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Technology has always been a catalyst for entrepreneurship. Most recently, the gig economy has created new channels for entrepreneurs to sell goods and services.  Millennials are establishing new digital platforms and markets to share everything from apartment space to transportation to artisan goods.   

These rapidly changing dynamics have called into question more traditional definitions of a business owner and an employee. 

The majority of gig economy workers tend to be part-time workers and independent contractors, many of whom appreciate flexibility and autonomy of this new sector. 

These jobs’ flexibility allow millennials to have different work experiences without significant risks or sacrifices, so they can gain job experiences and build their professional networks quickly.  

Additionally, the gig economy affords many millennials greater workplace independence and improved work-life balance.  Not only can they determine their hours, they often control the work they do, select business partners, and choose their work projects.  

Despite these benefits, we should also acknowledge one reason for this sector’s rapid growth may be rooted in broader economic struggles.  

Many millennials were hit hard by the 2008 recession when they were either entering the job market or in the early stages of their careers. This disruption caused some millennial workers to be more flexible on what they view as work -- and how they earn a living.  

The prolific growth of the gig economy also raises important labor policy implications.  

While many of the workers in the gig economy enjoy flexibility, they must be protected from unscrupulous business practices.  Most firms operating in the gig economy classify their workers as “independent contractors” – not employees. Such a categorization saves businesses money through reduced benefits and tax withholdings. 

Businesses and courts have long struggled to determine whether certain workers constitute employees or independent contractors. Courts are currently overflowing with lawsuits over whether companies have misclassified employees, and many of these cases stem from the gig economy. 

As always, the challenge is ensuring businesses and employees are protected, without discouraging innovation and economic opportunity.   

As this technological revolution advances, government policy must keep pace.  It is therefore important this Committee deepen its understanding of what’s happening in the gig economy -- and has a grasp on how we can minimize risk for millennial employees, while maximizing growth and productivity for small businesses.  

I look forward to the insights this panel will provide on these topics.