U.S. Senator Mark Warner (D-VA) was in Fredericksburg September 11, 2015, to hear from some 20 local entrepreneurs and business leaders about the new gig economy.
Meeting at The Foundry, FredXchange’s recently opened co-working space, Warner said that by economic necessity or by choice, as many as one-third of U.S. workers are piecing together work opportunities to make a living. Some have started their own companies, some are working as 1099 independent contractors, and some are part-time workers. Many are combining two or three.
The healthcare exchange helped launch this growing economy by providing access to health insurance apart from traditional employment, Warner said. “Obamacare is not as good or as bad as anyone is saying,” he said. We need to keep what’s good and fix what’s wrong.”
“Could we create a market place for other benefits?” he suggested.
Local entrepreneur Chris Muldrow, owner of Rambletype, LLC, said the healthcare exchange is what made it possible for him to launch his company. But the ability to grow his company is hampered by his current inability to provide benefits to full-time staff, he said. He was interested in Warner’s idea of a kind of benefit exchange in which those making a living in the gig economy could contribute into and draw from. “I’d buy into it,” he said.
Christina Dill works for Muldrow as a 1099 independent contractor. She’s an example of the gig-workforce, also working other freelance jobs and part-time at a local grocery store that limits hours. As with others in the room, she said she likes the quality of life provided by working locally, setting her own schedule and pursuing work she loves. But she worries, too.
Warner believes there needs to be a new classification for this growing segment of the American workforce, to help provide the kind of safety net more traditional employees receive. He also called for new ways of thinking to help entrepreneurs succeed.
Warner has held similar meetings this summer in Roanoke, Richmond and Hampton Roads. He suggested sharing of resources and information could help across the state. This would include funding resources.
Susan Ball, senior consultant with the University of Mary Washington Small Business Development Center, helps businesses find funding to get started and grow. She easily finds loans for people with good credit and capital of their own, but said there is a gap for those without capital or seeking smaller loans. “There is not money for those with a great idea who need only $5,000 to $10,000,” she said.
Christine Goodwin, founder of FredXchange, said the area needs more education on angel funding. An angel funder or seed investor provides capital for a start-up, usually in exchange for convertible debt or ownership equity. She also suggested connecting local entrepreneurs with the many defense contractors in the region.
“Local, state and federal governments do a crummy, crummy job on collaborating on resources,” Warner said. “The takeaways from our meeting today are the need for local help with a funding network, improved information sharing, and collaboration between local Department of Defense companies and local entrepreneurs,” he said.
Though he supports the new economy, Warner believes a third classification is vital.
“There are a lot of these folks who are not being recorded appropriately,” he said. “I want to promote as much innovation and flexibility as possible. It’s great to see these new Airbnbs, Ubers and TaskRabbits, but I also do feel there needs to be something in between doing well and being on government assistance programs. For years we had this safety net where both the employer and the employee contributed a little bit.”
He decried what he called “scamming” — employers manipulating the system to prevent providing benefits. For example, limiting hours to save on the cost of providing benefits or promoting workers to managerial positions simply to avoid paying overtime.
It’s this kind of American capitalism that’s destroying American capitalism, Warner said. “The focus on short-term quarterly profits over long-term value creation I think is inherently destructive,” he said. “Capitalism is at its best when it creates long-term value, and that means investing in a community, investing in equipment and investing in people.”
More
FredXchange Names Co-Working Space
Local Company Wins National Startup Showcase
FredXchange: Building a Startup Community in the Fredericksburg Region
Fredericksburg’s Entrepreneurs of 2014
Entrepreneurship, Broadband, Collaboration Key to Regional Economic Growth
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