As the year kicks off with a Republican-controlled Congress and White House increasingly focused on efficiency, it should be no surprise that the Department of Government Efficiency (DOGE) is being led by business people who sharpened their skills through startups and innovative technology companies now worth billions. As the Trump administration – with the help of Elon Musk and Vivek Ramaswamy – considers how to spur the next stage of great American growth and innovation, a major opportunity can come from redefining the future of work with balanced regulatory guardrails to maintain the safety of America’s workforce.
Innovative American startups like Uber, DoorDash, Instacart and TaskRabbit are shaping that future with the so-called gig economy currently valued at $556.7B worldwide. These developments are welcomed by workers and customers alike while combining labor and entrepreneurship to fuel our country’s economic growth.
Like most new technologies and innovations, the conversation around the gig economy has driven a lot of talk about potential consequences. However, for the United States to maintain its economic dominance, Congress, the Trump Administration, and the private sector must all work together to not only accept, but embrace the new technologies while protecting both workers and profits.
That balanced regulatory approach neither protects embedded interests nor subjects workers to exploitative new regimes. As an example of the former, Labor unions express fears of decentralized labor models because those limit unions’ power, even as the people they claim to represent are celebrating the freedoms that gig work can offer. Campaigns to ban ride-sharing or food deliveries run into angry consumers who refuse to part with the convenience. Competition for new workers is pushing apps to offer better terms while customers are demanding better services at lower costs. This is all healthy pressure for the best companies – for shareholders, customers, and workers – to win out.
However, the redefinition of work is also going global, and not everyone outside our borders is interested in the better angles of innovation. This is especially coming into focus with the emerging trend of tech companies offering human resources (HR) outsourcing services, a new industry using innovative tech solutions to help other companies expand their workforces faster at lower costs and with fewer headaches. One of its biggest recent selling points is for American companies to hire employees abroad without needing to open offices outside the country, leaving all the HR and legal compliance tasks to the “employer of record” (EOR) service provider.
Such arrangements are nothing new in the global employment world, so it should not be surprising that, following the pandemic, several American companies – including Papaya Global, Alcor Solutions and Rippling –identified the EOR industry as an opportunity and have shown tremendous success in helping employers and gig workers scale quickly and enjoy new opportunities. This industry provides an important component particularly for U.S.-based companies of all sizes to grow and remain competitive in the changing global economy.
Like all industries, however, there have been a handful of bad actors who have taken advantage of the industry’s record growth to help provide services “without having to worry about compliance regulations in different countries” – including helping companies evade U.S. sanctions on Russia and other bad actors helping fund Russia’s three-year invasion of Ukraine. Deel, a relative newcomer in the EOR industry, has recently been sued and accused of countless violations, including money laundering and violating labor rights.
As these industries continue to evolve and grow, the United States needs to address the potential for bad actors in new industries and ensure they are shut down or forced to change their ways so the broader economic benefit for good actors in the private sector do not have their hands unnecessarily tied behind their backs.
President-elect Donald Trump’s enthusiastic support of American innovation is a recognition that it is our secret weapon for ensuring U.S. domination in the global economy. In fact, the bigger danger lies in hesitating to give U.S. companies greater leeway in offering better products at lower costs because of bad actors that jeopardize emerging opportunities to advance the economy and workforce.
As Congress, the Trump Administration, and DOGE focus on new opportunities to focus on, now is the time to bet on American innovation and appropriately remove bad actors.
