Economics Discussion
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Anthony Kelley posted May 14, 2020 6:05 PM
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Social Security, Medicare, and Unemployment Insurance programs are all government programs that assist citizens of the U.S by providing vital financial support to better the lives of U.S citizens. Since each of these programs are supported by taxes, It is much better for the government to continue to levy taxes through the reduction of self-employment and “gig” or short term assignment ideals. Independent contractors like IT professionals, General Contractors, etc., receive a 1099 form when they perform services for a company without actually being on the direct payroll. Therefore, payroll taxes are not deducted, and neither the independent contractor or the company they are doing the “Gig” for are governed by the same rules and regulations that apply to traditional employees on the company’s payroll. In a gig economy, work is only temporary and can be difficult to find at times, when they do perform a job; taxes are not deducted from their wages therefore hindering the U.S government from collecting the taxes that are needed to fund the government programs. This in turn allows for less and less assistance these programs can offer those in need.
In my personal opinion, I see the growth of the Gig economy as a negative trend in the economy. While it allows for many individuals to be essentially entrepreneurs, it does take away from the essential programs the U.S government can offer due to a lack of funding by which they collect in Payroll taxes. I am a 37 year old man and have worked every day of my life since I was 15, I have paid into Social Security and Medicare for 21 years and have many more years of work ahead of me before I even begin to think of retiring. If we continue to grow the Gig economy and less and less payroll taxes are paid, funding for Medicare and Social Security will diminish and by the time I am of the age where I have a real NEED for these programs, there will be no funding left. I understand people wanting to make more money now and live their best life now, but not many people are thinking about when we are old, how will we be cared for with government money when there is none?
“What Is a Gig Economy?” Informationstation.org, 2019, https://informationstation.org/kitchen_table_econ/what-is-the-gig-economy/
Levine, Ephrat “The Gig Economy is Quietly Undermining a Century of Worker Protections.” 2019 https://qz.com/1556194/the-gig-economy-is-quietly-undermining-a-century-of-worker-protections/
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Arnaldo Molina posted May 14, 2020 11:34 PM
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Why might the U.S. government, which funds Social Security, Medicare, and unemployment insurance programs by taxing wages, desire to find a way to reduce self-employment and inhibit the growth of the gig economy?
I think the U.S Government desire to reduce self-employment due to the low taxes that they pay due to businesses shaving off about 20% of their taxable. By working less hours and making less income from the normal employments, they would automatically pay less to the government. Which the government use those funds that they are losing from the self-employments for other things until they would have to pay it back to you.
Do you see the growth of the gig economy as a positive or negative trend in the economy?
I think that the growth of the gig economy is a positive, due to people having several options to be employed. Yes, the pay less in taxes but the government should better themselves on how to spend the taxed money they collect from the both employed and self-employed.
