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Report: Regulators Threaten Worker Opportunities, Aspirations

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Regulators are taking action against the work preferences and aspirations of people in 21st Century America, according to a new Competitive Enterprise Institute (CEI) report released today, Punching the Clock on a Smartphone App? The Changing Nature of Work in America and Regulatory Barriers to Success.

“Instead of a 9-to-5 job and punching the clock, people have a new American dream of work that offers greater flexibility, autonomy, and opportunity than ever before,” said Iain Murray, CEI vice president for strategy. “But government labor regulators are imposing rules that make modern forms of work and business - like contracting, franchising, and freelancing - more difficult.

“Regulators and labor unions want to see a return to large, corporate business institutions, making it easier to regulate and impose wage and benefit mandates,” Murray explained. “But regulators should not be permitted to shove aside the work opportunities Americans want and strive for.”

The report explains how a spate of new regulations based on 1930s laws are aimed at discouraging flexible work arrangements and business ownership. Those regulations include: the National Labor Relations Board’s (NLRB) ruling that expands joint employer liability over work conditions and terms, the NLRB ambush election rule that makes unionizing a workplace easier, and the U.S. Department of Labor rule expanding the federal overtime pay mandate.

The report describes how business innovations from the 1950s onward, from the creation of franchises to the latest smartphone app, have vastly expanded diversity in new business and work opportunities. Tellingly, Internal Revenue Service (IRS) data show a 22 percent increase in 1099 tax forms, most often used by contractors and other self-employed people, since the year 2000. Meanwhile, W-2 tax forms, which signify traditional wage employment, have stagnated.

CEI’s report urges Congress to intervene with a set of reforms to get government off the backs of contractors, stop interfering with business innovation, empower startups in the sharing economy, and scale back the judicial role of the overly-politicized National Labor Relations Board.