Tag Archives: minimum wage

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Here’s a Tip For Oregon Businesses: Stop Demanding Tips

The consumer-price index rose 8.5% in March from a year earlier, the fastest annual pace since December 1981, the Wall Street Journal reported on April 20. That’s the figure most consumers think of when they worry about rising prices.  But there’s another number too often ignored – the cost of tips and the insidious spread of tip expectations.

In a recent stop at a local Burgerville, I encountered a Uniden digital payment device with tip options: 15%, 18% 20%, custom and no tip.

The evil digital tip trap

At another burger place, their digital payment device presented me with tip options of 15%, 20% and 25%.

A 20% or 25% tip, where there used to be no tip expectation at all, is equivalent to a 20-25% price increase on top of any inflationary increase in the price of the food itself. 

Tip requests on electronic devices are becoming so pervasive that they are starting to feel like demands, particularly when the transactions are occurring under the watchful eyes of employees. 

As consumers are becoming more price sensitive over a host of goods and services, the reality that tips are increasingly becoming part of the price is raising concerns.

“Seems like anyone doing anything for you these days, even if it is in the scope of their responsibilities/expectations, has their hand out,” a recent commenter on a Tripadvisor Forum complained. “You don’t tip at a fast food restaurant,” another commenter said emphatically.

Consumer concerns are growing, particularly in states like Oregon where workers, such as servers, must be paid the state’s minimum wage ($14 in the Portland Metro Area, one of the highest in the United States according to the National Conference of State Legislatures) even if the worker also receives tips.

Regular minimum wage laws often don’t apply to restaurant workers, such as servers, who earn a lot of their income from tips. Federal law stipulates that employers can pay tipped workers as little as $2.13 an hour (an amount unchanged since 1991), so long as their tips bring them up to at least the federal minimum wage of $7.25. 

Shoppers are generally sympathetic to the plight of low-wage workers, but public resentment seems to be growing when tips are expected in food service and other situations where a worker is also guaranteed earning an elevated minimum wage or in situations where tip expectations are new. We don’t generally tip retail workers in a mall who are also guaranteed a respectable minimum wage in Oregon, for example.

A recent New York Times article about tipping generated a lot of comments, many of which lamented the seeming spread of tipping expectations to multiple businesses and regardless of the amount of actual service by an employee:

“Travelling to the USA each year from Europe I notice this just getting more extreme and expensive with zero additional benefits to the consumer. The next screen flip I get, I would like to flip my own card with discount options for the proprietor that is forcing us to shoulder his staffing costs.”

“I hate the companies that use payment systems like Square, and I particularly hate the companies, like Square, that have brought this new dystopian world upon us. Down with tipping!”

“Collectively, we cringe when the iPad is swiveled into our face at the coffee counter or deli; we know it is extortion rather than appreciation for services rendered.” 

Enough!

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After adjournment, the deluge

stormcoming

I guess it wasn’t enough for Democrats to allow people in the country illegally to get Oregon driver’s licenses, ignoring voters who soundly rejected the practice in 2014. Oregon’s Democrat-controlled 2019 Legislature also voted to bury Oregonians in a deluge of tax increases.

“Only time will tell whether there will be political consequences for Oregon Democrats who enacted this tax hike, Patrick Gleason, Vice President of State Affairs at Americans for Tax Reform, wrote in Forbes. “What is certain is that Oregon lawmakers are making their state a less attractive place to do business, create jobs, invest, and raise a family, and they are doing so at a time when other states are implementing reforms to make their tax and regulatory climates more welcoming.”

 At the top of the 2019 Legislature’s tax list is the gross receipts tax on sales inside the state’s borders that exceed $1 million, whether or not the business makes a profit. The tax, equivalent to a sales tax, is expected to raise $2 billion per biennium. The legislative revenue office says the tax will hit about 40,000 businesses. This less than three years after almost 60% of Oregon voters rejected Measure 97, a ballot measure that would have imposed a state gross receipts tax. 

Adding insult to injury, the Democrats passed SB 116 setting a particularly inconvenient election date if a tax repeal petition now seeking signatures qualifies for the ballot. Rather than having the vote take place during the general election in 2020, when there’s likely to be high interest and participation, the bill provides for a special election on January 21, 2020.

I guess they figured picking Christmas or New Year’s Day for the vote would be too obvious an attempt at manipulation.

Paid Family Leave legislation (HB 2005-B) is going to cost you, too. A 1% payroll tax will fund a paid family leave insurance program (FAMLI) to be administered by the Oregon Employment Department.  The tax will come on top of the business sales tax.

A Revenue Impact statement projected that employers will pay $542.3 million and employees $1,029.6 in 2021-2023. In 2023-2025, employers will pay $ 775.0 million and employees $1,471.5 million.

Then there’s the maneuvering with the kicker.  The collective “kicker” tax rebate Oregonians will likely receive when they file in 2020 is going to be $108 million smaller, thanks to HB 2975, a bill Gov. Kate Brown signed into law in April.

 And don’t forget SB 861, which provides for paying the postage for election ballots. It will cost taxpayers an estimated $1.7 million per election. Gov. Brown pushed for the law, figuring it would increase voter turnout. In a rather bizarre statement, given the widespread availability of stamps, Brown testified that low-income and younger residents don’t always have access to postage stamps.

There’s also HB 2449-B, a 50-cent increase in the emergency communications tax on our phones, which will bring the total to $1.25 per month.

Oregon’s minimum wage law is increasing employer costs, too.

According to the Office of Economic Analysis Department of Administrative Services, the law will result in a slowdown in job growth. “While the impact is small when compared to the size of the Oregon economy, it does result in approximately 40,000 fewer jobs in 2025 than would have been the case absent the legislation,” the office has reported.  “Our office is not predicting outright job losses due to the higher minimum wage; however, we are expecting future growth to be slower as a result.”

And next year, Oregon voters will get a chance to vote on an increase in yet another Oregon tax, this one on tobacco. If approved, the cigarette tax would increase by $2 a pack and E-cigarettes and cigars would be taxed at 65% of their wholesale price.

Whew, what a torrent!

As the humorist Gerald Barzan observed, “Taxation with representation ain’t so hot either.”

 

 

 

 

 

 

 

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Sock it to ’em: Hales and the left long for more taxes

More taxes. That’s the left’s answer for everything. Usually, they try to spread out the tax increases so you won’t notice how the total is escalating. But this year, they’re going whole hog.

Funny Tax Picture 2

On Tuesday, Portland Mayor Charlie Hales proposed an $8.7 million increase in the Business License Fee. Now 2.2 percent of a business’ net profit, the fee would increase to 2.5 percent for 25,200 Portland businesses.

“We need to be responsible leaders by providing enough revenue to deliver basic City services and invest in making lasting progress on our challenges,” Hales said. “A slightly larger fee on business’ profits will have a far-reaching, positive impact on the city as a whole.”

Meanwhile, Our Oregon, a coalition of unions and progressive groups, is promoting Initiative Petition 28 for the November 2016 ballot.

The measure would raise the corporate minimum tax on Oregon sales of more than $25 million a year from the current minimum of $50,000 to $30,001 plus 2.5 percent of the excess over $25 million. The tax would be based solely on sales, not profit.

The Legislative Revenue Office estimates the corporate tax measure would raise $5.3 billion during the 2017-2019 biennium. Corporate taxes during that biennium under the current system are projected to reach about $1.1 billion.

In other words, the measure would increase corporate tax collections per biennium by a whopping 400 percent in one fell swoop.

“If that passes, we’ll have a lot of money to pay for stuff,” said Rep. Mitch Greenlick (D-Portland).

All this would be on top of Portland’s much-maligned Arts Tax, which a large swath of the city’s liberal population isn’t paying, and an additional 10 cents a gallon gas tax in Portland, the brainchild of Portland Commissioner Steve Novick, that would generate $64 million over the next four years if voters approve it on May 17.

Yesterday, May 3, an Oregon judge approved ballot language for another tax, a payroll tax that would support Portland State University. Supporters will now begin collecting signatures to get the tax on the ballot in November. The proposed one-tenth of 1 percent payroll tax on wages paid by Portland-area businesses would generate about $40 million annually for PSU.

And if all these new taxes aren’t enough, the increases in the minimum wage that the Democrats in the state Legislature just pushed through will start in July.

Meanwhile, Gov. Brown is meeting in Portland today with lawmakers and business executives to start the process of crafting a multi-billion dollar funding package for state roads. The package would likely involve higher gas taxes and vehicle registration and driver license fees.

Hold on  to your wallets, folks.

 

 

 

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The minimum wage mess: what hath we wrought?

brownminimumwage

Governor Kate Brown signs the bill to raise Oregon’s minimum wage, March 2, 2016

If you listen just to Democrats in the Oregon Legislature, the just-signed law upping the minimum wage is an unalloyed victory for all.

Tell that to Oregon universities that are faced with big pay increases and to the students who aren’t going to get a job because their school can’t afford to pay them.

According to The Oregonian, Oregon’s new minimum is likely to lead to cutbacks in student hiring or in the number of hours they’re allowed to work, and possibly higher tuition to cover added costs.

At the University of Oregon, the annual wage increases will translate into an estimated $2.3 million in additional wages

In the 2017-19 biennium, $3.4 million in the next funding cycle and $6.1 million by the 2021-23 biennium.

With similar impacts expected at Oregon State University, the school could be looking at reducing the number of student jobs by 650 to 700 positions by FY2019 to cut costs, said OSU spokesman, Steve Clark.

Small businesses across the state are agonizing over the minimum wage increases, too. They’re not going to be talking about ‘What do we do to expand? What do we do to hire more people?’,” said Anthony K. Smith, Oregon state director for the National Federation of Independent Business.

“They’re going to be making some very difficult decisions, none of which are going to help them grow. They have to decide whether to reduce hours for employees, raise prices on customers, make a reduction in their workforce, relocate their business, or maybe even close their doors.

Then, of course, Oregon’s minimum wage changes will contribute to the increased hodgepodge of pay rates in the Pacific Northwest.

If you are an employer in the Pacific Northwest, the minimum wage you will have to pay your employees early next year could, depending on the type and specific location of your business, the age of the employee, and other factors, be any one of the following: $8.05, $9.25, $9.47, $10.15, $10.50, $12.00, $12.50, $13.00, $15.24, $10.35, $11.15, $14.50, $15.00, or $15.24.

If you have to pay prevailing wage rates, your minimum wage rate will be even more expansive. In Oregon, for example, if an employer chooses to include the fringe rate with the basic hourly rate, the minimum hourly wage will be $57.26 for a boilermaker, $52.36 for a dredger and $34.31 for a Highway & Parking Striper.

Clearly, the plethora of minimum wages is going to generate maximum confusion for employers and employees alike. What a mess.

Want to know the whole bewildering picture? See below.

FEDERAL

2016 Federal hourly minimum wage: $7.25 an hour

Federal (sub) Contractors hourly minimum wage

Rate: $10.15. Calculated annually based upon cost of living and rounded to the nearest multiple of $0.05

WASHINGTON

2016 Washington hourly minimum wage outside Seattle, SeaTac and Tacoma: $9.47

  • 14- and 15-year-olds may be paid 85% of the minimum wage ($8.05).
  • Businesses may not use tips as credit toward minimum wages owed to a worker.
  • Under Initiative 688, approved by Washington voters in 1998, the state makes a cost-of-living adjustment to its minimum wage each year based on the federal Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) (www.ssa.gov). The state’s minimum wage is recalculated each year in September. Th4 new wage takes effect the following year on January 1.

2016 Seattle hourly minimum wage

A wage includes salary, hourly pay, commissions, piece-rate, and non-discretionary bonuses. Wages do not include tips or payments towards medical benefits. However, payment toward medical benefits can reduce employers’ minimum wage requirements temporarily until 2018.

Small Employers – 500 or fewer employees

 To calculate employer size, count the employer’s total number of individual employees worldwide. For franchises, count all employees in the franchise network.

All small employers are required to pay minimum compensation. Small employers can meet this requirement in two ways:

  • Pay hourly minimum compensation rate; or
  • Pay hourly minimum wage and make up the balance with employee tips reported to the IRS and/or payments toward an employee’s medical benefits plan. For an employee’s medical benefits to qualify toward the minimum wage, the plan must be the equivalent of a “silver” level or higher as defined in the federal Affordable Care Act. An employer cannot pay a reduced minimum wage if the employee declines medical benefits or is not eligible for medical benefits.
  1. Hourly Rate

Small employers pay hourly minimum compensation rate based on the following schedule:

  Minimum Compensation
2016 (January 1) $12.00/hour
2017 (January 1) $13.00/hour
2018 (January 1) $14.00/hour
2019 (January 1) $15.00/hour
  1. Tips and/or Medical Benefits

Small employers pay an hourly minimum wage and reach the minimum compensation rate through employee tips reported to the IRS and/or payments toward an employee’s medical benefits plan. If the tips and/or payments toward medical benefits do not add-up to the minimum compensation rate, the small employer makes up the difference.

  Minimum Compensation Minimum Wage
2016 (January 1) $12.00/hour $10.50/hour
2017 (January 1) $13.00/hour $11.00/hour
2018 (January 1) $14.00/hour $11.50/hour
2019 (January 1) $15.00/hour $12.00/hour
2020 (January 1) $15.75 $13.50/hour
2021 (January 1) $16.49 $15.00/hour

In 2025, small employers will pay the same minimum wage rate as large employers and will no longer count employee tips and/or payments toward an employee’s medical benefit plan toward minimum compensation. The City of Seattle will calculate percentage changes to the minimum wage based on the Consumer Price Index (CPI).

Large Employers: 501 or more employees

To calculate employer size, count the employer’s total number of individual employees worldwide. For franchises, count all employees in the franchise network.

Large employers can meet Seattle’s minimum wage requirements in two ways:

  • Pay hourly minimum wage; or
  • Pay reduced hourly minimum wage if the employer makes payments toward an employee’s silver level medical benefits plan. For an employee’s medical benefits to qualify toward the minimum wage, the plan must be the equivalent of a “silver” level or higher as defined in the federal Affordable Care Act. An employer cannot pay a reduced minimum wage if the employee declines medical benefits or is not eligible for medical benefits.
  1. Hourly Rate

Large employers who do not pay towards an employee’s medical benefits plan pay hourly minimum wage based on the following schedule:

  Minimum Wage
2016 (January 1) $13.00/hour
2017 (January 1) $15.00/hour
  1. Medical Benefits

Large employers who do make payments toward an employee’s medical benefits plan pay a reduced minimum wage based on the following schedule:

  Minimum Wage
2016 (January 1) $12.50/hour
2017 (January 1) $13.50/hour
2018 (January 1) $15.00/hour

Once Seattle’s minimum wage reaches $15.00/hour, payments toward medical benefits no longer impact employees’ minimum wage. In subsequent years, the City of Seattle will calculate percentage changes to the minimum wage based on the Consumer Price Index (CPI).

SeaTac Minimum Wage 

Rate: $15.24 for workers in and near Seattle-Tacoma International Airport.

 Tacoma, WA hourly minimum wage

11/04/15 – Tacoma, WA voters approved a $12 city minimum wage phased in over two years. The new minimum wage will apply to most employees who work 80+ hours per year within Tacoma city limits and begins with an increase to $10.35 an hour on February 1, 2016, Jan.1, 2017: $11.15; Jan. 1, 2018: $12.

 

 

OREGON

Current:  $9.25

 Tier 1 (the Portland urban growth boundary)

July 1, 2016: $9.75

July 1, 2017: $11.25

July 1, 2018: $12

July 1, 2019: $12.50

July 1, 2020: $13.25

July 1, 2021: $14

July 1, 2022: $14.75

 

Tier 2 (Benton, Clackamas, Clatsop, Columbia, Deschutes, Hood River, Jackson, Josephine, Lane, Lincoln, Linn, Marion, Multnomah, Polk, Tillamook, Wasco, Washington and Yamhill counties)

 

July 1, 2016: $9.75

July 1, 2017: $10.25

July 1, 2018: $10.75.

July 1, 2019: $11.25

July 1, 2020: $12

July 1, 2021: $12.75

July 1, 2022: $13.50

 

Tier 3 (Malheur, Lake, Harney, Wheeler, Sherman, Gilliam, Wallowa, Grant, Jefferson, Baker, Union, Crook, Klamath, Douglas, Coos, Curry, Umatilla and Morrow counties)

 

July 1, 2016: $9.50

July 1, 2017: $10

July 1, 2018: $10.50

July 1, 2019: $11

July 1, 2020: $11.50

July 1, 2021: $12

July 1, 2022: $12.50

 

Milwaukie hourly Minimum Wage for city employees

10/22/15 – The Milwaukie City Council adopted a $15 minimum wage for all city employees. The resolution passed unanimously, putting in place a $15 minimum wage for not only full-time employees of the city of Milwaukie, but also part-time and seasonal workers, as well as interns.

Prevailing Wage Rates

In January and July of each year, Oregon’s Bureau of Labor and Industries publishes the prevailing wage rates that are required to be paid to workers on non-residential public works projects in the state of Oregon. Quarterly updates are published in April and October.

REGION #2

Clackamas, Multnomah and Washington Counties

Under the Davis-Bacon Act, employers can either choose to pay the fringe benefits as additional cash wages (which would result in an effective hourly wage of $38) or provide a “bona fide” benefit plan. Benefits that might be included in such a plan are retirement accounts (401(k) or pensions), medical insurance, vision insurance, dental insurance and life insurance.

 

Basic hourly rate             Fringe rate

Boilermaker               $33.92                           $23.34

Dredger                       $39.08                           $13.28

Fence constructor

(non-metal)               $24.10                         $10.12

(Metal)                          $20.50                         $ 5.09

Highway & Parking

Striper                            $26.11                          $ 8.20

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An abuse of power: Oregon Democrats and the short session

When Governor Brown signed the new minimum wage law on March 2 she hailed it as an example of Oregon’s collaborative spirit. Far from it.

The Democrats have been using this year’s short session to run the Legislature like an authoritarian one-party state. That’s what happens when one party is in control for so long.

2013-congress

In one case, the Democrats steamrolled Republicans and rammed a minimum wage bill, SB 1532, through the Legislature in just one month.

The Senate passed the bill 16-12, with the vote going strictly along party lines. The House vote was 32-26, with every Republican again voting no.

Under this major law that will impact workers and employers across the state, the base state minimum wage will rise to $9.75 on July 1. Wages will then rise at different rates in in three geographic areas, with the Portland area reaching $14.75 in 2022.

Then there’s what The Oregonian has called “one of the most far-reaching pieces of energy legislation the state has ever seen.”

On March 1, the Democrats rammed through the House on almost a strict party-line vote, the latest version of a controversial bill that would end the use of coal to provide power to Oregonians within two decades and expand the use of renewables to 50% of the power supply by 2040. Republicans then repeatedly failed to derail the legislation, after which all but one Democrat voted to pass the bill, overwhelming the no votes of 12 Republicans (one didn’t vote).

In this case, it wasn’t only the Republicans that were shut out of the process; so was the Oregon Public Utility Commission. The Oregonian reported that state utility regulators say they were shut out when it came time to craft the legislation and when members of the Commission tried to voice their concerns publicly, the governor’s office muzzled them.

To top it off, Democrats have abused the short Legislative session itself.

When voters approved Measure 71, providing for annual legislative sessions, in 2010, there was a general expectation that the short sessions would deal with emergencies and lower-impact bills, leaving the longer sessions for comprehensive and high-impact bills where deliberation and public input would be required.

Democrats have cast that approach aside this short session and run amok with major partisan legislation.

Apparently its true, to slightly rephrase Mark Twain’s observation, that “No man’s life, liberty, or property are safe while the Oregon Legislature is in session.”

 

 

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The fatuous fight for $15

mcdonalds

Hold the burgers, hold the fries! MAKE OUR WAGES SUPER SIZE!!! ‪#fightfor15

 

New York’s Gov. Andrew Cuomo announced earlier this month that he would set a $15 minimum wage for all state workers on his own and without legislative action.

Cuomo’s move will give raises to about 10,000 state workers, adding $20.3 million annually to state spending by the time the increase is fully phased in.

What the heck. No skin off his nose. The state doesn’t have to make a profit. Take it out of taxpayers’ pockets.

That seems to be the attitude of a lot of folks these days. Wages have been stagnant for years for most people and inequality is the topic de jour. Let’s give a whole bunch of people a raise.

But whatever people say to pollsters about their support for higher minimum wages, that doesn’t necessarily translate into a willingness to pay the higher prices for goods and services that often result.

Furthermore, a sweeping across-the-board $15 an hour mandate that might be bearable for a business in Portland also might be devastating for a small business in Astoria, Echo or Pendleton.

The Economic Policy Institute, a left-leaning policy organization with ties to the organized labor movement, says, “All workers deserve a wage sufficient to support themselves and their family.”

The problem is that the minimum wage was never intended to be enough to support a family and that even a $15 minimum wage would still be a long way from achieving that goal.

In Oregon, for example, a family of four needs to earn about $64,000 for a reasonably comfortable living. A $15 an hour wage in a full-time 40-hr week would translate into an annual income of just $31,200.

It’s not even clear that raising the minimum hourly wage to $15 would be a clear victory for all the poor. It would certainly raise the wages of many workers, but it would also likely lead to the elimination of many jobs traditionally open to unskilled minimum-wage earners. In addition, most of the benefits of an increase to $15 an hour would not go to people actually living in poverty.

In fact, about 50 percent of current minimum-wage workers are under 25, and about 25 percent are teenagers. The unemployment rates of both groups are already higher than the 5 percent national unemployment rate.

People without a job are much more likely to be living in poverty than those who are employed. Furthermore, many of those earning less than $15 an hour today are not the primary breadwinners in families. That being the case, a better way to address poverty would be to work harder to position the unemployed for the workforce and to target income supplements on low-income families through such programs as the Earned Income Tax Credit.

When I see a plaintive story about Suzie, a fast food worker who protests that she’s been working at the counter for 4 years and hasn’t seen any substantial raises, my first thought isn’t, “Well, double Suzie’s pay, youInstead, I think, “How can you justify a big jump in pay to someone who has been performing the same low-skill job for 4 years, with no increase in her expertise and no increase in her productivity that enhances the company’s bottom line?” That may sound brutal, but it’s how things work at every single successful company. It can’t be otherwise.

Supporters of the $15 an hour minimum wage also err when they say it won’t cost much. A $15 an hour minimum wage would not happen in isolation. There would be a cascading effect on other workers, thus a greater cost impact on the employer.

If you raise the hourly pay of the McDonald’s crew from $9.25 to $15 an hour, a 62 percent increase, can you leave the shift manager’s pay at $10.20 an hour, and so on up the ladder?

At some point a franchise owner will say, “enough!” McDonalds has tested automated self-service kiosks that have been shown to reduce customer wait times and generate higher sales than ordering from workers at the counter asking, “Do you want fries with that?” That may be the future if we go down the $15 road?

 

 

 

 

 

 

 

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The emerging 1099 economy: the new sweatshop

If your total income in 2013 put you in the top 40 percent of Americans, you’ve likely gotten richer over the past 20 years, according to the Federal Reserve. If you are anybody else, your income, after adjusting for inflation, has probably gone down.

This trend will likely continue if the independent contractor business model enabled by technology multiplies. The winners will be the educated, specialized elite with full-time jobs and benefits who file W-2 tax forms; the losers will be independent contractors who file 1099-MISC tax forms.

On-demand worker company TaskRabbit CEO Leah Busque told TechCrunch, a technology news website, that the company’s goal is to “revolutionize the world’s labor force.” It and similar companies relying on independent contractors are accomplishing that if you consider the revolution to be back to the future of sweatshops.

Automatons

Consider that under current law, independent contractors aren’t entitled to:

  • A minimum wage
  • Health benefits
  • Unemployment insurance
  • Retirement plans.
  • Workers’ compensation
  • Job protections

Uber and Lyft, both of which use independent contractors, are two of the best known 1099 companies, but others are sprouting like weeds. They include Homejoy (house cleaners), Handy (home cleaners and handymen), Postmates (couriers deliver goods locally), Spoonrocket (restaurant food delivery), Washio (laundry and dry-cleaning), DogVacay (pet sitting), Zirtual (personal assistants for entrepreneurs and professionals), Kitchensurfing (personal chefs) and TaskRabbit (personal tasks).

Washio allows customers to place laundry and dry-cleaning orders online and sends “ninjas” to pick up and deliver items. Washio doesn’t actually do any cleaning; it sends clothes to third party facilities. Independent contractors use their own vehicles, and cover their own costs, to go hither and yon picking up and dropping off clothes.

Online job source TaskRabbit asks people, “What can we take off your plate?” It offers “fully vetted Taskers to get the job done”, allowing the customer to “kick back and relax” and pay the bill online when the job is done. TaskRabbit makes its money by taking a 20% service fee off the payment.

TaskRabbit makes it clear that Taskers are independent contractors and that Taskrabbit is no more than “ a communications platform which enables the connection between Clients and Taskers.”

The company reinforces that message by saying it “…has no liability regarding the Service” and “…is not responsible for the performance of Users, nor does it have control over the quality, timing, legality, failure to provide, or any other aspect whatsoever of Tasks Clients, nor of the integrity, responsibility or any of the actions or omissions whatsoever of any Users.”

SherpaVentures, a venture capital firm, predicts that so-called “freelance marketplace” or “managed-service” labor models used by these companies are poised to transform industries like law, health care, and investment banking, and that fewer people will have traditional full-time or part-time jobs as a result.

According to Sherpa, “perpetual, hourly employment is often deeply inefficient for all parties involved, with the employer having to employ long-term workers for short-term needs and the worker missing the independence and productivity that come with freelancing and make workers happier.”

Futurist Thomas Frey, predicting 1099 nirvana, asserts that on-demand work will mean freedom. “…those who master the fine art of controlling their own destiny will rise to the inspiring new lifestyle category of “rogue commanders of the known universe,” he says.

A shift to independent contracting is more likely, however, to create a permanent underclass with meager, unreliable income, no benefits and few protections.

TaskRabbit CEO Busque says future work will be more flexible and “much more in the hands of what I like to call micro-entrepreneurs—people setting their own schedules, setting their own rates, saying what skills they have and what they’re good at.”

Valleywag, a Gawker Media tech blog, puts it a little differently: “If TaskRabbit Is the Future of Employment, the Employed Are Fucked”