New Week, New Headlines: Where Have All The Plumbers Gone & New Gig Worker Rules
Mar 19, 2024Season 1Episode 19
Francesca Ranieri
It's Sunny Friends! Freakin' finally. And, in addition to the vitamin D - here's the news we jammed about this week:
Topic 1: WhereHaveAllThe Plumbers Gone? According to Bloomberg, The US will be short 550,000-plumbers by 2027. The reason why, frankly, blows. We jam about the impacts of this shortage, and the urgent need for a societal shift in perspective towards trades.
Topic 2: NewGigWorkerRules Worker classification. It's what determines if someone is an employee or an independent contractor (gig worker). Lawsuits are flying, with the U.S. Chamber of Commerce at the forefront, challenging new legislation that could reshape the workforce, impacting everything from worker rights to how businesses operate and the future of the gig economy itself. References for all our fellow nerds :
Disclaimer: This podcast is for informational purposes only and should not be considered professional advice. We are not responsible for any losses, damages, or liabilities that may arise from the use of this podcast. The views expressed in this podcast may not be those of the host or the management.
It's Sunny Friends! Freakin' finally. And, in addition to the vitamin D - here's the news we jammed about this week:
Topic 1: WhereHaveAllThe Plumbers Gone? According to Bloomberg, The US will be short 550,000-plumbers by 2027. The reason why, frankly, blows. We jam about the impacts of this shortage, and the urgent need for a societal shift in perspective towards trades.
Topic 2: NewGigWorkerRules Worker classification. It's what determines if someone is an employee or an independent contractor (gig worker). Lawsuits are flying, with the U.S. Chamber of Commerce at the forefront, challenging new legislation that could reshape the workforce, impacting everything from worker rights to how businesses operate and the future of the gig economy itself. References for all our fellow nerds :
Disclaimer: This podcast is for informational purposes only and should not be considered professional advice. We are not responsible for any losses, damages, or liabilities that may arise from the use of this podcast. The views expressed in this podcast may not be those of the host or the management.
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Francesca :
I mean the reality of it is trade schools have been doing it right all the whole time. Listen, I went to a liberal arts college. I graduated with an intaglio printmaking, which is etching on copper plates, and public relations. Okay, Freshman year in college, I will never Believe me. My dad's like. We're basically by their lexative factor. And what the yeah which you know? As you can tell, 18 year olds make very good business decisions. Well, hello friends, hello.
Mel:
How are you, mel? I'm fantastic. It is sunny 61. The birds are chirping, there are buds on trees and it's just making my heart smile. I love it. Yeah, yeah, absolutely.
Francesca :
Same, absolutely the same over here. I don't think I have seasonal effectiveness disorder, but then the sun comes out and I'm like, maybe I do, maybe I do, yeah.
Mel:
I think we all do yeah, yeah, I'm also digging the daylight savings time.
Francesca :
That extra sunlight at night is nice. Yes, I love it.
Mel:
I love being able to sign off and still go outside and go for a walk. Yeah, I love it. Yeah, you know. Fucking healthy man, it's healthy. Yeah, it's so good. I love this time of year, just re-invigorating. Well, this is your work, friends. I'm Mel.
Francesca :
And I'm Branchesca.
Mel:
And we're your two HR friends, with absolutely no filter, just getting you through the workshop.
Francesca :
Yeah.
Mel:
Branchesca, what are you talking about today? New week, new headlines.
Francesca :
Today, I want to talk about where have all the plumbers gone? Oh Listen, the United States desk really needs more plumbers, but young people are snubbing in the profession. And I want to talk about what the story is, what the impact is and where do we go from here. Mel, what are you talking?
Mel:
about. I am talking about businesses escalating their fight against Biden's role on gig worker pay.
Francesca :
Bloomberg came out with an article this week. America's plumber deficit isn't good for the economy, and I want to talk about why. Mel, I give you the word plumber. What do you think about?
Mel:
I think that one. They're essential, right. Everyone needs water in their home. If you need a gas hookup, that's who you call, so to me that's an essential trade.
Francesca :
Did you ever consider a trade in high school, like before you went to college? You ever think about going into trade. I didn't, did you?
Mel:
I did. But the narrative, at least when I was in school, was college or bust. If you do anything but college, you're going to set yourself up to fail. That felt like that was the tone, although I was the first person in my family to go to college and most of my family are treatment, so I always felt like they were doing fine and that was a reasonable profession. And we had vocational high school in my hometown that trained kids up on the trade so they had a career right out of high school, which I thought was amazing. It seemed better than taking on student look, which I did, but it wasn't pushed.
Francesca :
It wasn't pushed for me either, it wasn't even in my purview to think about going into the trades and there's a reality right now. That kind of thinking about not having that option pushed, not looking at the trades like construction, electrician, plumbing, HVAC is really costing the United States economy and it's going to have some pretty massive impacts for how we push things like the green initiative forward. I'll give you a stat by 2027, the country will be short 550,000 plumbers.
Mel:
Oh God that just don't have anything go wrong in your house, folks. Yeah.
Francesca :
Young people do not want to become plumbers, I think it's around the narrative.
Mel:
It really has to change around the trades in general. When I was in school, they tried to make it seem like it wasn't an ideal profession, and I think that's wrong. Why was it pushed to take on student loans at 18? I don't know.
Francesca :
I don't know. Let's look at the reality of it. Typically in the trades, sometimes you can get an apprenticeship right away. Sometimes you have to go to trade school. Typically, trade school is not any longer than two years. You're typically not going to pay any more than $5,000 total. Right now the median income for a plumber median is $67,000 a year. When you grow up in a trade, just like in any other job, there are multiple levels. So as an individual contributor, your medians are on 67. If you get into managerial, that number goes up. If you get into owning your own business, I saw numbers anywhere from 250 to 400K on average to own your own business.
Mel:
Yeah, I believe it. My uncle co-owned a fence business and he's making six figures. He's done fence for Martha Stewart, tommy Hilfiger. He's been highlighted in fence magazines Like yeah, fence magazine. Well, he's like a Greenwich with a zoo owner property. He sounds like Ray Romano. It's so funny. He used to come up when I was at Yukon. They had contracts with the states, so on my way to class he'd be like what we're up at Yukon today. Stop online. I'd stop at Dunkin Donuts and bring them all copies.
Francesca :
Come on, guys, that's so nice. He always did a ton of shit Most people who work in the trades can point to. I worked on that building, I did that. I did that.
Mel:
I did that. You know like we build our entire society. I don't know. There's money to be made.
Francesca :
There's a lot of money to be made, and especially now. The other thing that I think about is 40% of people. Just in plumbing alone Again, I'm not even talking about construction, I'm not even talking about electricians Just in plumbing alone, 40% of workers are over the age of 45. So when you think about job security, when you think about the runway people have going into it, the trades are a massively lucrative profession to look into For all of us. It's costing right, because just in 2022 alone, the shortage of plumbers costs America $33 billion.
Francesca :
Oh, wow, yeah, here's why that is. When you're doing construction and when you're doing builds, you frame up and then you pull in with plumbing. You have to do plumbing before you do all this other shit. If you don't have enough plumbers, your timelines get longer, the amount of money it costs to get plumbers in there gets higher, and that all costs. The other future forward cost that I want people to think about, too, is when you think about all these green initiatives, like when you think about going green, what's the first thing that comes to your mind, mel?
Mel:
Immediately. It's like anything energy efficient for your house, like energy efficient washer and dryer, energy efficient hot water heater, solar panels, whatever that it's reducing your carbon footprint.
Francesca :
We automatically go to solar, we go to the grid right. A lot of that is water when you think about water shortage, what's headed for water wars? Water, clean water, efficiently getting water, desalination that's all plumbing. That's all plumbing. There is an adage that the plumber protects the health of the nation. When we think about water that's brought to you by plumbers, we need a pretty big rebrand of the trades, because they're critically important and you can make a really good life with them.
Mel:
Yeah, I could go down a rabbit hole around the push for college to 18 year olds and why that's not okay.
Francesca :
To your point when you think about the difference between price of entry in the trades versus a college education $5,000 trades on average, $280,000 college. You're 22 years old. You're coming out with $280,000 in debt, crippling debt. I know people well in their 40s that are still paying off their college loans. Yeah, I mean until college becomes cheaper. I don't know if college is worth it for a lot of people. I loved my college education, but I don't know.
Mel:
When I was exploring colleges, I was looking at Northeastern in Boston because they had this apprenticeship program. You went to class and then you apprenticed in the fields that you wanted to work. I was always confused why all universities weren't like that. Trades are like that, where you apprentice and you get them on the ground experience. But they were unique in the sense that they offer that kind of program. It's just, we were told, this is the only path. Take on all the student loan debt. I don't know if you experienced this, but it was like oh, we got our bachelor's, but now you need a master's to get to the next level. It just felt like this vein you had to constantly play. That was now the barrier to entry. You don't have your master's, so now you can't move up because you don't have your master's. Then you got your master's and now you're being told well, we don't care about college degrees anyway, it's just about skills.
Francesca :
Yeah, I mean. The reality of it is trade schools have been doing it right all the time. Listen. I went to a liberal arts college. I graduated with an intaglio printmaking which is etching on copper plates and public relations. Okay, freshman year in college, I will never Well, believe me my dad's like, we're basically by the lexical path here. And what's the yeah, which you know as you can tell 18 year olds make very good business decisions.
Mel:
The other thing it's like at 18, honestly, your brain literally is not wired to make good decisions until you're 25. Why not Everybody get trained in a trade? My nana used to say having a trade, you always have something that you can fall back on and do outside of knowledge. Work Like a trade is important. I just think this is incredibly important to rebrand, especially for young people today, that this is a viable option, it's a meaningful option and it's one where you can see success and have real impact. So something to consider. Or if you're going through a career pivot and you're trying to get out of corporate, explore the traits.
Francesca :
MUSIC Mel. What's going on with gig workers?
Mel:
Yeah, so this was a recent article by Tony Rahm in the Washington Post on the employee or independent contractor classification change under the Fair Labor Standards Act recently went into effect on March 11. Have you heard about this?
Francesca :
yet Tell me more, okay.
Mel:
This is a revision of the Department of Labor's guidance on how to analyze who's an employee and who's an independent contractor under the Fair Labor Standards Act, and this replaces the role that was published in 2021 under Trump's administration, which made it easier for employers to classify workers as independent contractors by cutting down the historic six-factor economic reality test to two factors.
Francesca :
Ah, the six-factor reality test. I typically do that with a lot of coworkers. Anyway, this is the six-factor economic reality test.
Mel:
It's based on years of judicial precedent, according to the Department of Labor, and what Trump did was he tried to simplify it no-transcript, although it made it a lot easier for employers to misclassify workers and there are a lot of costs to this, which I'll get to in a second. What this new legislation is aiming to do is ensure that eligible workers receive minimum wage and overtime pay by restoring it back to the six factors to determine if someone is an employee or independent contractor. So what's included in these six factors? This is the test. Do they have an opportunity for profit or loss depending on managerial skill? Are investments made by the worker and the employer? Is there a permanence of their work relationship? The nature and degree of control within their work, whether the work performed as integral to the employer's business, and skill and initiative.
Mel:
These are the six factors. There is room to get a bit more clear, so we're going to get to that in a second. It's one of the main arguments of folks who are against this, but it's there for good reason. It's there to protect employees and those who are getting misclassified, which is massive. Obviously, there's a number of impacts here. I think when people think about the impacts. They think about app-based businesses who rely heavily on gig workers.
Francesca :
Uber left.
Mel:
Yeah, instacar, all of those good folks. Why this matters. So ultimately, this is to reduce the risk that employees are misclassified as independent contractors or, worse off, the books altogether. Classic, I get paid under the table kind of situation we know how that works. Today that misclassification of employees as independent contractors denies workers of things like minimum wage, overtime pay and other protections like workers comp, which really puts them at risk for exploitation. This most commonly happens in a couple of different industries. Do you want to take a guess?
Francesca :
Under the table? I always think construction or restaurants. Yeah, Nice.
Mel:
Construction is number one. There's healthcare, retail, security and janitorial services. Those are the highest offenders, according to the insurance journal, and many folks think of gig workers, like I said, uber, lyft, instacar but there's an academic named Mark Earlith and he recently posted an article calling construction the original gig economy. The article was the misclassification of construction the original gig economy in the industrial and labor relations review. If you want to read it, we'll link to it. If you want to nerd out and read his article. The National Employment Law Project, which is a workers advocacy group, found that in a 2020 analysis that between 10 and 30% of employers misclassified their employees as independent contractors to save money.
Francesca :
All employers like just everybody, not just the construction. Yeah, just to enroll.
Mel:
There's this percentage and there's a lot of economic cost to this misclassification. Sure, sure, yeah. Like I mentioned earlier, this misclassifying employees takes away payments towards things like benefits, social security, unemployment insurance, workers comp. That's costing US taxpayers between five to 10 billion dollars per year, according to the Century Foundation, which is an independent think tank. They conduct research to drive policy change to make people's lives better. So good organization over there, and a report from 2023 noted that up to 2.1 million US construction workers are illegally misclassified or paid off the books, which is massive.
Francesca :
We have a housing shortage in this country. We just talked about the need for folks in trades, people that are skilled in building houses, fixing houses, fixing plumbing and electricity. Office building. Infrastructure alone, right, keeps this country running, and yet we're not valuing them by paying them all of the aspects of pay that they deserve.
Mel:
Correct and it's hurting them over time. So AP News gave an example of a misclassified construction worker and they noted that a misclassified construction worker can lose anywhere between $10,177 per year to $16,729 per year, and workers off the books completely just lose their legal rights. They lose general compensation. If they're off the books and they did the work, what are their grounds if they don't get paid?
Mel:
Yeah, none, absolutely none, there's never an agreement, never an agreement right. No Benefits like overtime pay, required minimum wage, safety protections, paid leave, insurance benefits, insurance comp if laid off, healthcare, etc. They're losing. They're losing all of that. There's a lot of improvement that needs to happen in multiple industries, so there's some controversy happening right now that wasn't the controversy.
Francesca :
It wasn't the controversy. Oh shit, all right. Oh, there's worse.
Mel:
Yeah, wait, there's more there is more controversy, but now it's getting litigious. There are several industries and businesses joining forces to file suit against this new legislation. That includes the US Chamber of Commerce. The US Chamber of Commerce's VP of Workplace Policy, mark Friedman, argued that the new regulation is quote biased towards declaring most independent contractors employees, a move that will decrease flexibility and opportunity and result in lost earning opportunities for millions of Americans. I wasn't quite sure where I was going with that.
Mel:
Employers against it feel that returning to this multi-factor test is going to make it more challenging for them to classify correctly, and lawsuits have been submitted by freelance writers, trade groups and a trucking company.
Mel:
Businesses in on the fight are arguing that the federal rules are costly, improper and could decimate the gig economy and, according to this Washington Post article, many of these businesses are arguing that the new rules will put pressure on them to treat more workers as employees, which could carry steep costs.
Mel:
They can't afford forcing them to slash the labor force. That I thought was very interesting, because it's like you're being forced to appropriately classify employees and pay them appropriately. In the suit they also say that the Labor Department threatens to quote irreparably harm not just companies employing independent contractors nationwide, but workers themselves, and at the forefront of this case is the Coalition for Workforce Innovation. They're a lobbying organization whose members include retail technology transportation giants like Uber and Lyft, the US Chamber of Commerce, the National Retail Federation, the National Federation of Independent Businesses and the American Trucking Association. They all signed on to this fight, and I wanted to know that in this article it was that Uber and Lyft have come out publicly to say they don't believe this new rule will affect them, but they're still lobbying against the new rule.
Francesca :
The thing that I keep thinking about is in general, in life, the truth is always somewhere in the middle right, there's room for getting better everywhere. Yeah, we know it can be very expensive to carry employees to run business. Absolutely, it can be. I also know that without things like regulation, workers get taken advantage of. We can roll out thousands of examples that when there is not a government intervention with regulating this, people get taken advantage of Period, full stop. So the truth to me is somewhere in the middle.
Mel:
Yeah, the news. Recently there have been a lot of hot headlines. We covered child labor law being scaled back recently, the attack on labor unions with Jeff Bezos and Elon Musk, recently a fight for increasing minimum wage, and now this. And look, I think all of these things exist for a reason it's to just make business better and protect employees while we make businesses better and, at the end of the day, it's to make sure that you have some basic human rights. I don't know that it's true. Yeah, you have some basic human rights Workers advocates. Their response to these lawsuits have been that this is to ensure companies do not mischaracterize workers as dependent contractors simply to save money while denying them better pay and rights. There's got to be a compromise here.
Francesca :
There's also and I don't mean this to be political, I mean this to be economic, hear me out. There's a little bit of an elephant in the room here, because if the business problem in front of us is we need to make the cost of business doable and we need to pay our people a livable wage, that's the business problem. How can we do this? I would argue that the best way to do this is think about where are costs for the business that we can pull out? Where are costs for employees that we can pull out? One of the biggest places is freaking healthcare.
Francesca :
When you think about universal healthcare, this is not a political issue. This is a business issue. This is a worker issue. Healthcare and healthcare insurance premiums have increased by 20% in the last five years and just in 2024 alone jumped another 8.5%. Healthcare costs organizations a shit ton of money. They are passing a lot of those costs on to employees. That's another reason why we're seeing this undercurrent of employers giving employees stipends for their benefits instead of paying for their benefits, because healthcare is just going to get more and more expensive. I think about this argument right here. This argument is just going to go on fire unless we take care of one of the biggest elephants in the room, as opposed to saying you know what? I think the solution to this is we're not going to freaking. Pay you Right, agreed. Can we raise some of these business issues and be like what's the biggest elephant? Let's take that out and let's do what we need to do to make businesses work Things that comes at taking out some of those costs and making them universal.
Mel:
Absolutely. I couldn't agree more. We'll see what happens here. This just went into effect last week. They're back at it. There's obviously these lawsuits in place. I'm sure we're going to hear more news about it as we get it. We will update our listeners on what's happening in this space. If you have thoughts and you want to share your thoughts and feelings about this too, let us know, share your point of view with us. You can email us at friend, at your work, friends, and let us know what you think If anyone wants to start a side business in plumbing.
Francesca :
Also franchesca at your workfriendscom.
Mel:
Let's do it, friends. Good discussion, as always. As always, we are happy to share this episode with you all, and if you missed our latest episode, you'll want to go back and take a listen. We met with Kate Dixon, author of Pay Up and Name your Price. She covered the four-part recipe of salary negotiations, so you'll want to check that out and get caught up. We have a couple of other guest speakers joining us over the next few weeks. Stay tuned for that. As always, you can follow us on LinkedIn at your work friends podcast and on Instagram at your work friends podcast For Jessica. Anything else you'd like to add, we're trying out YouTube.
Mel:
Oh yeah, that's always a little weird.
Francesca :
If you want to see us, there you go.
Mel:
There are faces out over there If you have a chance. Thanks for listening friends. Thanks for listening friends.
