U.S. labor markets are being roiled by a number of unstoppable forces, including globalization, the sudden rise and fall of major corporations and even industries, and demographic changes. In addition, a wave of new Internet platforms such as Airbnb, Lyft, and TaskRabbit have lowered the cost of matching buyers and sellers, and in the process have redefined how workers can thrive in the economy. Yet despite all these changes, U.S. labor law has remained frozen for decades. The result is an increasing mismatch between the market realities facing workers and the legal requirements that govern them.

A recent finding by the California Labor Commission highlights this disconnect. The commission determined that Barbara Berwick, a San Francisco driver, was an employee of Uber rather than an independent contractor. While the decision does not set a precedent, may be reversed by courts and might be made moot by Uber making minor changes to its standard contract, this conflict nonetheless highlights the difficulty of applying antiquated laws to new and rapidly evolving industries. Current labor laws were written at a time when large companies were regarded as permanent fixtures in the economy, workers tended to stay with one employer for many years, employees had one full-time job, and many industries were heavily unionized. Those conditions no longer exist. As a result, our laws are increasingly ineffective in giving guidance to companies and protection to workers.

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