The Secretary of Labor sits in a tiny conference room on a far edge of Pinterest’s headquarters in San Francisco’s South of Market district. Tom Perez is here to talk with me about two things that obsess Silicon Valley: work and money. Or, as an aide describes it, "Silicon Valley as a microcosm of what’s happening nationwide—a small number of people amassing stratospheric wealth, side-by-side with people who are struggling to keep their heads above water and support families.”
I jumped at the chance, of course—how often do you get to chat with a top White House official? But even the way the interview is set up and conducted is a metaphor of the tensions between the tech industry and government: red tape and crossed wires, coupled with good intentions.
There's a flurry of emails I exchange with Perez’s press secretary two days before we're to meet. First, the plan is to sit in on a San Jose roundtable—or maybe a nighttime event at Palo Alto’s SurveyMonkey. We finally agree to connect in San Francisco at Pinterest, where Perez is to have a discussion with the heads of several on-demand startups. When I pull up that afternoon, a herd of black SUVs blocks the building’s entrance as men in sunglasses, guns holstered at their sides stand watch. “Whoa, something must be going on here!” my fellow UberPOOL passenger says, curiously looking on as I hurriedly get down from the car and thank my driver.
Perez is running late, so I sit alone in an airy conference room with floor-to-ceiling glass walls, the typical environs of a well-heeled Bay Area startup. Beyond the glass, tech workers dressed in jeans and hoodies grab their gourmet lunches from a cafeteria-style lineup. I watch them idly for a few moments, but soon, I'm hastily ushered into the smaller, windowless meeting room crammed off to the side for "security reasons.” More guards hover outside the door—an unusual presence in a city where CEOs worth billions seem to travel with no visible security.
When I finally meet him, the Secretary of Labor looks tired. He's in a suit, unlike everyone else who works here. In the end, I get about fifteen minutes, during which he skillfully skirts my questions about the legality of on-demand companies' business models and what the government’s specific plans are to regulate it. But he’s happy to talk about an issue that's likely on the minds of plenty of on-demand drivers and personal shoppers, laundry-doers and lunch deliverers.
“If you’re one car accident away from poverty, you’re on a high wire without a safety net,” he says. “And that’s a challenging proposition.”
This is not Perez's first visit to Silicon Valley. But this one is meant to be much more high-profile and symbolic, an Obama administration farewell tour. Perez calls the Labor Department's concept of ideal work “inclusive innovation,” and explains it with this talking point: “How do we make sure that rising tides lift all boats, and not just the yachts?” I Google the quote after, and it appears in a previous speech. But it’s a nice line, to be sure. It’s a powerful image.
Perez, 54, tells me he’s been a lawyer and civil rights advocate his entire career. He used to be the head of the civil rights division in the Department of Justice and before that, the Labor Secretary in Maryland. He became Labor Secretary in July 2013.
Now, Perez says, is a pivotal time for the federal government to be thinking through labor issues as new on-demand worker models epitomized by companies like Uber and Lyft gain traction every day, in the US and around the world. “We’ve made a lot of progress climbing out of the worst recession of our lifetime,” Perez says. “[Now], what we want to do is address the unfinished business of this recovery.”
Perez talks about what he describes as the social compact that emerged after the Industrial Revolution: the minimum wage, the Fair Labor Standards Act, the National Labor Relations Act, Social Security, workplace safety. And though he doesn't quite come out and say it, he seems to allude to the idea that we may need a policy of similar magnitude to account for the new arrangements under which so much work gets done.
“The on-demand economy presents incredible opportunities for ordinary Americans to monetize assets and potentially build a viable source of living,” he says. “[But] those jobs may not be tethered to retirement, healthcare, workers compensation, and other key aspects of the social safety net. So, how do we build that social safety net? How do we work together to make sure that technological advances are inclusive and don’t leave people behind?”
He says he's in Silicon Valley to work toward figuring out answers. But when I press him on specifics for how we get to that ideal, Perez defers to the long view, a view that's anathema to Silicon Valley's disruptive timeline: “That took 40 years last time. This is democracy in action—a big part of democracy is effective listening by governments.”
Not that the government isn’t doing anything. Earlier this week, the Department of Labor said that for the first time in over a decade it would collect data on the full range of ways people are working today. It would work with the Bureau of Labor Statistics, which tracks the unemployment rate, to count everyone from independent contractors to temporary employees to workers with multiple jobs—information that we’ve only been able to estimate at present.
The Obama administration also announced a number of proposals to make it easier for workers to save for their retirements, including a $100 million proposed grant to explore ways to provide so-called “portable benefits” for self-employed workers, part-timers, and workers with multiple employers. Another proposal would require that employers who don’t offer retirement benefits automatically enroll their workers in individual retirement accounts. And yet another pilot program would help states develop their own schemes working toward the same goal.
What the government ends up finalizing as the law may take some time. But Perez thinks that the polices can be beneficial for everybody. “I reject the false choice that suggests only the investors or workers or customers can prosper,” he tells me. “I think you can build models that create shared prosperity because they take a stakeholder approach to governance.”
Before long, our interview is over—the secretary has to get to his next appointment, and with the Super Bowl coming up, traffic in San Francisco is getting crazy. His entourage disappears, leaving me to look over my notes. I have to let myself out of Pinterest, and I hop into another UberPOOL car. My driver is a former SuperShuttle franchise owner operator, he tells me, but Uber has lured away most of his drivers and the business wasn't sustainable. It’s only his second week driving for Uber so far, and he's not sure whether he'll get the hang of the job.
