Using Gig-Economy Companies as Public Sector Comparators

In recent months, gig-economy companies have issued a string of multibillion-dollar initial public offerings (IPOs) that have drawn increased public and political scrutiny of these companies’ roles in driving inequality in certain metropolitan areas. No region has been more affected than the San Francisco Bay Area, where IPOs have provided thousands of stock-holding employees with additional wealth.

Meanwhile, wages in other sectors are not keeping pace with the increased cost of living. Public employees in particular are struggling to stay afloat in sectors where public employers fail to adequately adjust wages in response to skyrocketing costs.

The issue of tech-driven income inequality is playing a growing role at public-sector collective bargaining tables. Workers are also responding by taking direct action: In recent months, amid the IPOs of Lyft ($24.3 billion) and Uber ($82.4 billion), Bay Area public-sector employees and labor groups have taken to the streets to expose the government’s failure to address the growing inequality crisis. An April 2019 protest in front of San Francisco’s City Hall and Uber’s nearby headquarters resulted in the arrests of 24 public-sector employees.

One way labor unions can slow or neutralize the impact of income inequality is to expand the use of “comparators” at the bargaining table to private-sector employers. Public-sector unions typically use municipal employers in the same geographical area as “comparator” employers when negotiating for wage increases. However, given the current economic trends and housing crises in many metropolitan areas, it makes sense to expand these comparators to the private sector. When even the highest-paying municipal comparators are themselves underpaying their workers, their wages cease to be relevant for purposes of assessing whether a wage proposal is fair.

The issue of the ever-expanding impacts of the tech boom on housing and other costs of living—and the willingness of employers to confront these challenges—has become central to bargaining over a new contract. In addition to other tools in your toolbox, consider using private employers, particularly in the gig economy and the tech industry, as comparators in your contract negotiations.

For further information, contact your labor law counsel.

By Ben Fuchs | July 10, 2019

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