The current safety net is outdated. It was designed for an economy with one type of job in mind – full-time, 9-to-5 employment – and with high barriers to employment, such as interviews and résumés. But the economy is changing, with new technologies that seamlessly connect willing and able labor to the demand for work. This presents an opportunity to better target our safety net for those who need it most, bringing thousands out of unemployment, preparing our unemployed to be retrained for the skills needed for the vocations of the future, and driving down the soaring costs of our nation’s safety net programs.
A large body of social science research suggests that moving safety-net beneficiaries into work is better for their careers and long-term economic and mental well-being. But our safety net system does a poor job of putting people back to work and may actually discourage them from taking advantage of many kinds of work available to them – such as the jobs available in the gig economy. Moreover, safety net programs are becoming more costly to the government as more people rely on them, and threaten to squeeze our federal budget, sink us further into debt, and crowd out other important government priorities.
A combination of re-implementing and expanding work requirements, reforming the safety net to be compatible with gig work, and actively connecting unemployed workers to the gig economy can promote work and help put the safety net on a more sustainable path. To do so, it will require statutory and/or regulatory changes at both the federal and state level to modernize our entitlement programs. While many of the changes simply relate to classifications of who is able to work, other changes relate to program operations, potentially using public-private partnerships to help theunemployed find nearby gig economy jobs, or providing tools and materials needed to participate in the emerging economy. We call for providing states with maximum flexibility to test new concepts – states, as Justice Louis Brandeis famously referred to as the “laboratories of democracy,” can be more experimental, more quickly iterate to make changes as necessary, and better respond to specific state needs.