    [House Hearing, 115 Congress]
    [From the U.S. Government Publishing Office]

                           MILLENNIALS AND THE GIG ECONOMY

    =======================================================================

                                     HEARING

                                   BEFORE THE

                          COMMITTEE ON SMALL BUSINESS
                                 UNITED STATES
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  HEARING HELD
                                  JUNE 6, 2018

                                   __________

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                Small Business Committee Document Number 115-074
                 Available via the GPO Website: www.govinfo.gov

                                   __________

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    30-265                       WASHINGTON : 2018

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                       HOUSE COMMITTEE ON SMALL BUSINESS

                          STEVE CHABOT, Ohio, Chairman
                                STEVE KING, Iowa
                          BLAINE LUETKEMEYER, Missouri
                              DAVE BRAT, Virginia
                 AUMUA AMATA COLEMAN RADEWAGEN, American Samoa
                            STEVE KNIGHT, California
                            TRENT KELLY, Mississippi
                                 ROD BLUM, Iowa
                             JAMES COMER, Kentucky
                     JENNIFFER GONZALEZ-COLON, Puerto Rico
                        BRIAN FITZPATRICK, Pennsylvania
                             ROGER MARSHALL, Kansas
                          RALPH NORMAN, South Carolina
                               JOHN CURTIS, Utah
                   NYDIA VELAZQUEZ, New York, Ranking Member
                           DWIGHT EVANS, Pennsylvania
                           STEPHANIE MURPHY, Florida
                            AL LAWSON, JR., Florida
                             YVETTE CLARK, New York
                              JUDY CHU, California
                           ALMA ADAMS, North Carolina
                          ADRIANO ESPAILLAT, New York
                            BRAD SCHNEIDER, Illinois
                                     VACANT

                   Kevin Fitzpatrick, Majority Staff Director
          Jan Oliver, Majority Deputy Staff Director and Chief Counsel
                         Adam Minehardt, Staff Director

                                C O N T E N T S

                               OPENING STATEMENTS

    Hon. Steve Chabot................................................     1
    Hon. Nydia Velazquez.............................................     2

                                   WITNESSES

    Ms. Betsy Dougert, Director of Communications, SCORE Association,
      Herndon, VA....................................................     4
    Mr. Ryan Morris, Owner, Ruff House Dog Training, Stafford, VA....     5
    Ms. Anne Kirby, Founder, The Sweet Core, Lancaster, PA...........     7
    Mr. Steven Olikara, Founder and President, Millennial Action
      Project, Washington, DC........................................     8

                                    APPENDIX

    Prepared Statements:
        Ms. Betsy Dougert, Director of Communications, SCORE
          Association, Herndon, VA...................................    28
        Mr. Ryan Morris, Owner, Ruff House Dog Training, Stafford, VA    37
        Ms. Anne Kirby, Founder, The Sweet Core, Lancaster, PA.......    39
        Mr. Steven Olikara, Founder and President, Millennial Action
          Project, Washington, DC....................................    50
    Questions for the Record:
        None.
    Answers for the Record:
        None.
    Additional Material for the Record:
        None.

                        MILLENNIALS AND THE GIG ECONOMY

                                  ----------

                            WEDNESDAY, JUNE 6, 2018

                      House of Representatives,
                   Committee on Small Business,
                                                        Washington, DC.
        The Committee met, pursuant to call, at 11:05 a.m., in Room
    2360, Rayburn House Office Building, Hon. Steve Chabot
    [chairman of the Committee] presiding.
        Present: Representatives Chabot, King, Luetkemeyer, Brat,
    Knight, Kelly, Blum, Comer, Gonzalez-Colon, Fitzpatrick,
    Marshall, Norman, Curtis, Velazquez, Evans, Murphy, Lawson,
    Clarke, Chu, Adams, Espaillat, and Schneider.
        Chairman CHABOT. Good morning. The Committee will now come
    to order. And as folks have to exit, they could continue to do
    that, but just do it quietly, if you would.
        Throughout history, technological advances have shaped the
    economic landscape. With each advance, we see an increase in
    efficiency or output within the market. Today, we will discuss
    an example of an economic market that is not only shaped by
    technology but defined by it, the so-called gig economy.
    Today's hearing will allow us to explore the intricacies of a
    gig economy while diving deeper into the questions of who is
    participating in it, what does working in it look like, and how
    is its growth affecting small businesses.
        The concept of the gig economy is not new. It is a
    marketplace of workers whose businesses are a collection of
    individual projects or gigs. A gig can range from a short-term
    contract lasting weeks or months to a single task that takes
    hours to complete. This notion of short-term contractual
    workers dates back centuries but has been re-envisioned with
    the inclusion of technology.
        The gig economy is characterized by the use of technology
    as a means of connecting workers to employers. Digital
    platforms and mobile apps have been created to not only provide
    these connections but also to provide low-cost marketing and
    basic business tools to those working within the gig economy.
    Through the inclusion of technology, the economy that we just
    mentioned has become more efficient and attracted more and more
    market participants.
        While the exact number of workers in the gig economy can be
    difficult to estimate, the Bureau of Labor Statistics estimates
    that the number of Americans earning income outside the
    traditional 9-to-5 job to be more than 53 million individuals,
    approximately one in three workers. On average, those workers
    are currently estimated to be between 47 and 50 years old. By
    2020, however, roughly 42 percent of those workers are expected
    to be between 22 and 37 years old or of the millennial
    generation.
        Why are so many millennials pursuing careers in the gig
    economy? Our witnesses today will offer insight into this
    question and many others. We will hear about the role of
    coworking in the gig economy, the reality of being an
    entrepreneur, and small business impacts of the gig economy.
        I look forward to today's discussion, and I want to thank
    the witnesses for testifying here shortly, and I would now like
    to yield to our Ranking Member, Ms. Velazquez, for her opening
    statement.
        Ms. VELAZQUEZ. Thank you, Mr. Chairman.
        Technology has always been a catalyst for entrepreneurship.
    Most recently, the gig economy has created new channels for
    entrepreneurs to sell goods and services. Millennials are
    establishing new digital platforms and markets to share
    everything from apartment space to transportation to artisan
    goods.
        These rapidly changing dynamics have called into question
    more traditional definitions of a business owner and an
    employee. The majority of gig economy workers tend to be part-
    time and independent contractors, many of whom appreciate the
    flexibility and autonomy of this new sector. These jobs'
    flexibility allow millennials to have different work
    experiences without significant risks or sacrifices, so they
    can gain job experiences and build their professional networks
    quickly.
        Additionally, the gig economy affords many millennials
    greater workplace independence and improves work-life balance.
    Not only can they determine their hours; they often control the
    workday to select business partners and choose their work
    projects.
        Despite these benefits, we should also acknowledge one
    reason for this sector's rapid growth may be rooted in broader
    economic struggles. Many millennials were hit hard by the 2008
    recession, when they were either entering the job market or in
    the early stages of their careers. This disruption caused some
    millennial workers to be more flexible on what they view as
    work and how they earn a living.
        The prolific growth of the gig economy also raises
    important labor policy implications. While many of the workers
    in the gig economy enjoy flexibility, they must be protected
    from unscrupulous business practices. Most firms operating in
    the gig economy classify their workers as independent
    contractors, not employees. Such a categorization saves
    businesses money through reduced benefits and tax withholding.
        Businesses and courts have long struggled to determine
    whether certain workers constitute employees or independent
    contractors. Courts are currently overflowing with lawsuits
    over whether companies have misclassified employees, and many
    of these cases stem from the gig economy. As always, the
    challenge is ensuring businesses and employees are protected
    without discouraging innovation and economic opportunity.
        As this technological revolution advances, government
    policy must keep pace. It is, therefore, important this
    committee deepen its understanding of what is happening in the
    gig economy and has a grasp on how we can minimize risk for
    millennial employees while maximizing growth and productivity
    for small businesses.
        I look forward to the insights of this panel on this topic,
    and I want to take this opportunity to thank everyone that took
    time to be here with us this morning. Thank you.
        I yield back.
        Chairman CHABOT. Thank you very much.
        The gentlelady yields back.
        And I would now like to take just a moment to explain our
    timing, which, in general, is pretty simple. You get 5 minutes
    to testify. The green light will be on for four minutes; the
    yellow light will let you know you have got a minute to wrap
    up; and then the red light will come on and you are supposed to
    stop then. We will give you a little bit of leeway but not too
    much. We would ask you to stay within that time.
        And if Committee members have an opening statement
    prepared, I would ask that they be submitted for the record.
        And our first witness will be Betsy Dougert. Ms. Dougert
    serves as the Director of Communications at the SCORE
    Association, responsible for the Association's communications,
    planning strategy, budget, and metrics. Prior to her time with
    SCORE, Ms. Dougert served as Director of Communications and
    publications at the--could you pronounce that school?
        Ms. DOUGERT. Salesianum School.
        Chairman CHABOT. Salesianum School. Boy, I am glad I didn't
    try to do that. And the Marketing and Communications Manager at
    Sacred Heart Academy at Bryn Mawr. Ms. Dougert earned a
    Bachelor of Arts degree in literary and cultural studies from
    the College of William and Mary--glad to hear that, my alma
    mater--as well as a Master's Degree in communications from
    Villanova University. We thank you for being here.
        And our next witness will be Ryan Morris, who is the owner
    of Ruff House Dog Training in Stafford, Virginia. Ruff House
    Dog Training specializes in personalized dog training to
    address the specific needs of both the animal and the family.
    Previously, Mr. Morris has served as a Junior Analyst at
    Pivotal Practices Consulting LLC and a Management Analyst at
    CGI. Additionally, Mr. Morris previously served his country in
    the U.S. Marine Corps, and we thank you for your service. Mr.
    Morris received a Bachelor's Degree from the American Military
    University. And, again, we thank you for being here as well.
        And then our third witness will be Anne Kirby. Ms. Kirby
    serves as the Founder and Art Director of The Sweet Core, a
    creative studio and coworking space in Lancaster, Pennsylvania.
    In addition to her work at The Sweet Core, Ms. Kirby is the
    owner of Perkup & Company, a social enterprise cafe, and a
    Founding Member of The Candy Factory and Rock Candy, two
    coworking spaces in Lancaster. Prior to her current positions,
    Ms. Kirby worked as an Art Director at Kinectiv, a Creative
    Partner for Not Bad Design LLC, and a Creative Director for
    Hunter Kirby Design. And we thank you for being here as well,
    Ms. Kirby.
        And I would now like to yield to the Ranking Member, Ms.
    Velazquez, to introduce our fourth and final witness.
        Ms. VELAZQUEZ. Thank you, Mr. Chairman.
        It is my pleasure to introduce Mr. Steven Olikara, founder
    and president of the Millennial Action Project, a nonpartisan
    nonprofit engaging millennial policymakers and leaders across
    the country. He also serves as senior adviser to recording
    artist Akon Lighting Africa, an initiative to electrify over 1
    million homes in Africa with solar power. Mr. Olikara was a 2-
    month fellow at the World Bank and is a graduate of the
    University of Wisconsin. Thank you and welcome.
        Chairman CHABOT. Thank you. We thank and welcome all the
    witnesses here this morning.
        And, Ms. Dougert, you are recognized for 5 minutes.

    STATEMENTS OF BETSY DOUGERT, DIRECTOR OF COMMUNICATIONS, SCORE
     ASSOCIATION, HERNDON, VA; RYAN MORRIS, OWNER, RUFF HOUSE DOG
     TRAINING, STAFFORD, VA; ANNE KIRBY, FOUNDER, THE SWEET CORE,
       LANCASTER, PA; AND STEVEN OLIKARA, FOUNDER AND PRESIDENT,
              MILLENNIAL ACTION PROJECT, WASHINGTON, D.C.

                       STATEMENT OF BETSY DOUGERT

        Ms. DOUGERT. Chairman Chabot, Ranking Member Velazquez, and
    members of the House Small Business Committee, thank you for
    the opportunity to offer testimony on millennials and the gig
    economy. The face of U.S. employment is changing, and recent
    decades have shown a marked increase in participation in the
    gig economy.
        Businesses are increasingly hiring independent workers,
    also called contractors or freelancers, to fill key roles
    within their businesses. At the same time, increasing numbers
    of people are entering the independent workforce. According to
    the U.S. Census, gig workers can be defined as small
    unincorporated businesses which may or may not be the owner's
    principal source of income. Gig workers have a high degree of
    autonomy, typically have a short-term relationship with their
    clients, and receive payment by task, assignment, or sales.
    Research estimates that there are currently between 54 million
    and 68 million independent workers in the U.S., making up an
    estimated 20 to 30 percent of the working age population.
        Not everyone enters the gig economy for the same reason,
    nor are they alike in their earnings. Research from McKinsey
    shows that 72 percent of gig economy workers voluntarily enter
    the gig economy because of the freedom it affords them. Nearly
    a third of this group depends on gig work to provide their
    primary source of income, while 40 percent earn supplemental
    income. A much smaller group, 28 percent, of gig economy
    workers enters the gig economy out of necessity as opposed to
    choice. They are split 50/50, with half of them relying on gig
    work as their primary source of income and the other half
    earning supplemental income.
        How can we explain this upswing in gig work? First, the
    evolution of technology has made it easier and cheaper than
    ever for gig workers to start their own businesses, to find
    clients, and to conduct business from anywhere in the world.
    Next, today's independent workers want to feel passionate about
    their work. They value flexible scheduling and decisionmaking
    power.
        The good news for these independent workers is that small
    businesses, which already employ half of American workers, show
    increasing demand for qualified gig workers. In 2017, SCORE's
    small business owners hired 122,000 independent contractors,
    which is double the 61,000 full-time employees they hired. It
    is also a dramatic increase from the 31,000 independent
    contractors they hired in 2016. Twenty percent of small
    businesses surveyed by SCORE's Megaphone of Main Street data
    report in 2017 replaced employees, both full time and part
    time, with contractors. More than half did so because the job
    demanded specialized knowledge, followed by 41 percent who
    cited temporary or seasonal needs. One surprising finding was
    that nearly half, 47 percent of nonemployer firms, reported
    hiring people to help them run their business, for an average
    of 3.2 workers, including the owner. This dispels common
    assumptions that solopreneurs are running their businesses by
    themselves and shows that employment statistics that only count
    traditional employees may be underestimating the full economic
    impact of nonemployer firms.
        So how do millennials fit into this new gig economy? First,
    millennials represent the biggest share of the U.S. workforce,
    at 35 percent. Next, statistics point to millennials making up
    a bigger share of the gig economy than other generations of
    workers. Forty-seven percent of millennials freelance compared
    to 36 percent of the overall U.S. working population.
        When it comes to millennials owning their own small
    businesses, data from SCORE shows that more than two-thirds of
    millennial entrepreneurs depend on their business as their
    primary source of income. Similar to the general population of
    small business owners, financing remains a significant
    challenge. Just 29 percent of millennial business owners sought
    loans or financing for their small business in 2017, and only a
    third of those who sought financing successfully obtained it.
        Despite these challenges, millennial small business owners
    are an optimistic group. 2017 data from SCORE show that 82
    percent of millennial entrepreneurs reported feeling optimistic
    about their business growth, compared to 69 percent of all
    business owners. Future discussions about U.S. jobs,
    employment, and economic impact will need to take into account
    the many workers who participate in the gig economy.
        As businesses continue to increase their employment of gig
    economy workers, solopreneurs will most likely continue to rise
    at rates that outpace other types of small businesses. SCORE
    looks forward to continuing to serve the growing independent
    workforce, just as we serve all American entrepreneurs who
    dream of starting or growing a business.
        Chairman CHABOT. Thank you very much.
        Mr. Morris, you are recognized for 5 minutes.

                        STATEMENT OF RYAN MORRIS

        Mr. MORRIS. Good morning, Chairman, Ranking Member, and
    members of the Committee. I want to say thank you for allowing
    me to come and speak to you this morning.
        Again, my name is Ryan Morris, and I am the owner and
    founder of Ruff House Dog Training. I am also a 10-year Marine
    vet who recently got out in 2014.
        So my story is I--and during my time in the Marine Corps,
    you know, I have been to some great places and I have been to
    some not so great places. And my job, I had to--I was
    responsible for putting smiles on people's faces. And I did
    that in those less-than-happy places, and it made me feel good.
    And I said: I would like to do that. And so, when I got out,
    you know, I was job hopping. And if you have ever, you know,
    had--done some activity a lot and then you just stop, you know,
    your body has a chance to catch up and say: Oh, this hurts,
    and, oh, that hurts. Right? So I said--I said to my wife, I
    said: Honey, can you give me a massage?
        And she said no, and so I said: Okay. All right. Well, I
    said: How about if you let me get a massage chair? And I am not
    talking about these, you know, the pads that you can put in
    these chairs. See, I am talking about those real deal rocket
    ships that swallow you up and do your back and your neck and
    your toes, all of these things.
        And, of course, she said no again. And feel free to put
    whatever word you want in front of that.
        But so this got me to thinking. You know, how can I make
    some money on the side to not dig into our own combined income
    to get this massage chair? So one day I was scrolling through
    social media, and I saw this ad from a company called
    Thumbtack. It said: Dog trainers wanted. And I said: Oh, this
    is interesting.
        So I clicked that. And that was in October 2015. In January
    2016, I had broken four figures. I said: Man, this is great.
    You know, I am still working my full-time job. And I was like:
    This is wonderful. So, come June 2016, I had enough money to
    get my massage chair. Oh boy, right?
        So, you know, I am at that point, and I am saying: This is
    a lot of money for this chair, you know.
        But I did some thinking and I said: This is the reason that
    I set out to do this business. And I got it. And it serves more
    than a massage chair to me. It is more like a trophy to say
    that no matter what you set out to do, you can accomplish your
    goals, given the right tools and guidance.
        Now, speaking of guidance, as I said, I was in the Marine
    Corps. And every time somebody transitions from the Marine
    Corps or the military, period, they have a transition program
    to help you, whether you want to go to college or, you know,
    start your own business or just work a traditional 9 to 5.
        They also--well, not the military, but there is also a
    program called the ACP, the American Corporate Partners, which
    pairs you with a mentor that has a similar background that you
    do and a similar path that you express interest in, which is
    great. You also have the SCORE program that, you know, helps
    you kind of put a reality check to your business plans. It
    helps people who maybe have direction or don't have direction
    to kind of find themselves, okay.
        So I say all that. And, you know, in my opinion, that
    American Dream is, you know, to be able to do something that
    you really enjoy doing and could do it without getting paid and
    get paid for it, you know. I get to choose who I work for, when
    I work, how long I work. I didn't have to ask anybody to be
    here today. I didn't have to juggle and say: Well, if I come
    here today, I won't have enough leave for my 2-week vacation,
    you know. And that freedom and just almost carefree attitude is
    why I think a lot of people nowadays are seeking this freelance
    kind of structure, if you will.
        And I thank you again for letting me speak, and I look
    forward to your questions.
        Chairman CHABOT. Thank you very much.
        Ms. Kirby, you are recognized for 5 minutes.

                        STATEMENT OF ANNE KIRBY

        Ms. KIRBY. Chairman Chabot, Ranking Member Velazquez, and
    members of the full Committee, thank you for inviting me today
    and for giving me the opportunity to testify on coworking and
    its role in what is known as the gig or freelance economy.
        My name is Anne Kirby, and I am the founder of The Candy
    Factory, a coworking space in Lancaster, Pennsylvania.
    Coworking spaces are about building community. Per the
    coworking wiki, the coworking concept is simple. Independent
    professionals and those with workplace flexibility work better
    together than they do alone. According to the 2017 Global
    Coworking Survey by industry magazine Deskmag, an estimated 1.7
    million people will be working in approximately 19,000
    coworking spaces globally by the end of 2018. Twenty-nine
    percent of all spaces have opened just this past year, and
    nationally this growth is in step with the rise of the gig
    economy.
        Coworking is appealing for many reasons. Mostly located in
    urban centers where commercial rates are high, flexible
    memberships mean less risk, allowing members to use the space
    as needed, avoiding the high cost of long-term leases. Space
    operators manage all aspects of the facility, saving members
    valuable time and money.
        The gig economy has also helped drive the tech startup
    culture. With the emergence of open source, skill sharing,
    online collaboration tools, and social networks, we are
    connecting in ways we could never have imagined. We are not
    just working, but we are building relationships.
        Freelancing in America 2017, commissioned by Upwork and the
    Freelancer Union, estimates that 57.3 million Americans, or 36
    percent of the U.S. workforce, are freelancing. This report,
    considered one of the most extensive studies on the topic, has
    predicted that the majority of the U.S. workforce will be
    freelancing by 2027, millennials holding first place, with 47
    percent freelancing.
        These numbers speak volumes. We are facing new challenges.
    How and where we work is changing, as are the skills needed to
    be successful. Coworking spaces play a critical role in this
    ever-evolving ecosystem, providing not only an escape from
    isolation but also access to resources.
        I have been an active member of the freelancer economy for
    over 18 years and spent the last 11 years as a community
    builder. During that time, I have learned that success in the
    gig economy involves thinking collaboratively while seeking out
    low-cost or no-cost resources.
        After working from home for many years, I realized I was
    craving social interaction with my peers. I immersed myself in
    the emerging coworking movement and founded The Candy Factory
    in 2010. Over the past 8 years, The Candy Factory has grown,
    spanning across two locations and housing a community of close
    to 150 members, with room to grow. Being the first coworking
    space in central Pennsylvania, our diverse membership is made
    up of freelancers, remote workers, small business owners,
    startups, nonprofits, and students. Thanks to coworking, small
    businesses are thriving. Take, for example, Candy Factory
    member Doug Kauffman, a young certified accountant who formed
    Kauffman CPA after leaving his corporate job in 2014. Since
    then, he has been incubating his business in our space and has
    become a go-to resource for many of us, including myself.
        Partnerships with SCORE, SBA, Ben Franklin Technology and
    others help our members stay competitive, and the coworking
    space has become a natural client pipeline for resource
    providers. SCORE has recognized this benefit and is partnering
    with spaces throughout the country. And personally, SCORE and
    my mentor, Jerry Glenn, have played an essential role in my
    business development, offering third-party perspective, HR
    expertise, and referrals.
        Along with access to affordable real estate, other
    challenges for our members range from healthcare to education.
    We are helping to address rising healthcare costs through a
    membership-based primary care service called Rock Medical. This
    service does not replace health insurance, but instead gives
    members access to healthcare for a low monthly fee. Education
    is also critical to maintaining a prosperous gig economy. For
    example, the Pittsburgh-based co-op Work Hard started Academy
    Pittsburgh, a 12-week code boot camp that gives their students
    real work experience in popular coding languages. We understand
    that it is essential to work with our lawmakers on policy, from
    simplifying the tax process for solo entrepreneurs and 1099
    laws to infrastructure. Addressing these issues will allow us
    to remain competitive in the global market.
        Coworking spaces are here to help empower, connect,
    educate, and support the needs of the evolving workforce, and
    we look forward to partnering with our government to help enact
    change and support policy that will have a positive economic
    impact on the gig economy and those associated with it.
        Thank you again for your support and for allowing me to
    testify.
        Chairman CHABOT. Thank you very much.
        Mr. Olikara, you are recognized for 5 minutes.

                      STATEMENT OF STEVEN OLIKARA

        Mr. OLIKARA. Good morning. Thank you, Chairman Chabot,
    Ranking Member Velazquez, and members of the Committee. It is
    an honor to join you today.
        My name is Steven Olikara. I am the founder and president
    of the Millennial Action Project, or MAP for short. We are the
    largest nonpartisan organization of millennial policymakers in
    the United States. In 2013, we organized the first ever
    bipartisan caucus for millennials here in Congress, called the
    Future Caucus, and since then, we have expanded that model into
    26 States. Today, we engage over 600 millennial policymakers
    and thousands of millennial leaders across the United States.
        I would like to recognize Congresswoman Stephanie Murphy,
    who serves as the vice chair of our Future Caucus, and
    Congresswoman Velazquez, who is a member as well and probably
    has the highest concentration of millennials in her district. I
    have been there; it is a lot of fun.
        MAP and its Future Caucus network are on the front lines of
    creating and adapting policies to support this new economy.
    When we founded MAP in 2013, we noticed that millennial
    entrepreneurs were creating this new wave of gig work. Most
    notably, ride-sharing services at the time. This new sharing
    economy was not only disrupting old and incumbent industries,
    but it was also disrupting old and outdated government
    regulations. Not surprisingly, our millennial lawmakers,
    Democrats, Republicans, and Independents, were early adopters.
    They were rejecting the false choice between innovation and
    safety. They brought both parties together to create the first
    State laws authorizing these services, while also putting in
    place crucial consumer protections. Through MAP, we helped
    bring these best practices together from around the country.
        And, interestingly, the divide that emerged was not so much
    between the left versus the right, it was really the future
    versus the past. Now, since then, entrepreneurs have expanded
    these on-demand services to many other industries, from meal
    delivery to hospitality, which really highlights millennials
    peer-to-peer network-driven approach to solving problems. Other
    millennials, as we have already discussed here, are simply
    choosing to be their own bosses and pursuing their passions,
    perhaps as a creative freelancer or a consultant on socially
    responsible business.
        We know from studies that this generation of workers will
    not likely spend their entire career at one company.
    Increasingly, we will see workers moving from gig to gig. At
    their best, these opportunities will unleash creativity, create
    a more dynamic U.S. economy, and provide more flexibility to
    engage in work that best fits the worker. However, this
    emerging gig workforce also raises a number of issues, from
    access to health benefits to retirement security to disability
    and unemployment insurance. In short, the social contract we
    created in the 20th century needs to be updated for the 21st
    century.
        For context on why these opportunities are important, the
    unemployment rate among millennials today remains above the
    national average, around 8.5 percent. And that doesn't include
    the roughly 50 percent of millennials who report feeling
    underemployed. So, while we are the largest workforce in the
    United States today, the labor force participation rate in this
    age range has actually declined over the past decade, the
    lowest growth rate among all generations. At the same time, we
    are seeing gig work growing. Actually, the growth rate for gig
    work is outpacing the overall employment growth in our country.
    And millennials are disproportionately taking on this work. Not
    only that, studies have found that millennials are more
    willingly choosing this type of work, preferring the added
    flexibility. At the same time, millennials are undergoing this
    work with high debt levels, because of student debt and limited
    access to benefits. So, while the proportion of household
    income millennials receive from gig work is increasing, most
    millennial gig workers make less than their traditional full-
    time employed counterparts.
        So, with these trends, we need to consider the disruption
    between the traditional employee and employer relationship,
    particularly around those benefits that are difficult or
    impossible to obtain in this independent workforce. And if you
    take retirement as an issue, for example, if you look at the
    long-term trends, millennials are likely to have lower income
    replacement from Social Security, less likely to have
    traditional pensions, and more likely to have higher life
    expectancies. So our country cannot afford to have a gig
    economy that depresses retirement savings. We need to create an
    economy that does the opposite.
        We also need to look at the portability of benefits from
    gig to gig, such as healthcare, retirement savings, workers'
    comp and others. States, as the laboratories of innovation, are
    already drafting their own legislative plans that allow
    employees to move from gig to gig more seamlessly. And at the
    Federal level, there is already bipartisan legislation by
    Future Caucus Member Senator Todd Young, along with Senator
    Mark Warner, that would further support this type of
    experimentation at the State and local level.
        As the gig workforce grows, we need to be proactive in
    creating this 21st century social contract because studies show
    this workforce is only going to grow, and about 42 percent of
    these workers by 2020 will be millennials. I often hear from my
    millennial friends that they feel penalized for moving between
    job to job as they are pursuing their passions. We need to take
    steps to support this backbone of the U.S. economy so it is
    properly supported to promote innovation, provide security for
    workers, and maximize this new generation's potential for
    economic growth.
        Again, I want to thank Chairman Chabot and Ranking Member
    Velazquez and all of those on the Committee for inviting me to
    speak on this panel today. Thank you.
        Chairman CHABOT. Thank you very much.
        And now the members will have 5 minutes to ask questions,
    and I will begin by recognizing myself for 5 minutes.
        Ms. Dougert, I will begin with you. Just how cool is it to
    be a graduate of the College of William and Mary? No, no.
        Ms. DOUGERT. Chairman Chabot, it is fantastic. Pride, pride
    for life.
        Chairman CHABOT. Enough said. I yield back my time. No.
        Ms. DOUGERT. I am glad that is settled.
        Chairman CHABOT. Now my real question. We didn't prearrange
    this, right?
        My real question. You mentioned that only a third of
    millennials successfully received the financing that they
    sought. In general, I know it varies every time, but what do
    the other two-thirds then do? Do they not ever get off the
    ground? Do they not expand? Do they, you know--do they find
    some other way, or what do you hear out there?
        Ms. DOUGERT. Yeah. That is a great question. And just to
    recap, the exact statistics are that a third of millennials are
    seeking financing for their small businesses and a third of
    that third are successfully obtaining it. So it is actually
    even a gloomier picture than what you might think initially.
    And that is actually true for the greater population of small
    business owners as well. We know that only about a quarter of
    them are successfully obtaining financing in the traditional
    sense, loans and grants.
        So what our small business owner clients at SCORE are
    telling us that they do instead is a lot of self-funding. So
    the average small business is started on about $10,000 or less.
    And people are turning to methods, such as credit cards,
    crowdfunding, family loans and personal loans to finance their
    small businesses.
        Chairman CHABOT. Very good. Thank you very much.
        Mr. Morris, I will go to you next. Again, thank you for
    your service to our country.
        How do the skills that you picked up in the Marine Corps
    translate to your success in the private sector? And you have
    obviously done very well. How would you respond to that?
        Mr. MORRIS. Thank you, sir. Well, the Marine Corps, as you
    know, is the best service out there, right? And they set you up
    for success. They give you that mindset that you do things
    right the first time so you don't have to, you know, do it over
    and over and over again.
        And, again, being what I did in the Marine Corps, it gives
    you the different challenges of dealing with people who are,
    you know, from this place who have never done this job,
    whatever that may be. And you have to adapt. And one thing that
    the Marine Corps does is teach you how to adapt. It will make
    you an adult even if you are not ready. So I think that is how,
    you know, the military has helped me succeed, just knowing
    that, you know, you got one shot, and sometimes that is all you
    get.
        Chairman CHABOT. Thank you very much.
        Mr. MORRIS. Yes, sir.
        Chairman CHABOT. Ms. Kirby, I will go to you next. Could
    you discuss--you mentioned SCORE had been important. Would you
    tell us how SCORE did impact your business, either early on or
    how it is still continuing to affect you?
        Ms. KIRBY. SCORE has been an amazing asset, not just for my
    business but for a majority of our members. Our other SCORE
    clients actually participate in SCORE workshops or roundtables
    and activities. But for me personally, with my mentor, he
    really helped me step outside of my day to day and helped me
    kind of take a third-party perspective and hard look at my
    company.
        I was running multiple projects, and I really needed
    someone to kind of step in and just--and help me assess the
    numbers, take a look at HR issues that I was having. So I came
    to SCORE a little later in my career. A lot of individuals will
    go to SCORE initially, like I have this idea, help me get this
    rolling. But I really feel that SCORE is beneficial for
    companies no matter what phase of development that they are in.
    And I came to them later in my career, because of the growth
    that we were seeing and I needed help navigating that.
        The other thing is they really become a family. The mentors
    really come to the table, I have found, bringing their
    expertise and then also their referrals and their networks,
    which is just such an important asset to a small business who
    is looking to grow.
        Chairman CHABOT. Very good. Thank you very much.
        And, Mr. Olikara, I know it is hard to predict the future,
    but how do you see the gig economy changing as millennials age,
    and do you see any further out what is coming beyond that with
    the future generations? How do you see all that?
        Mr. OLIKARA. Yes, absolutely. I think we are going to see a
    rapid expansion of the gig economy, and it is going to--again,
    we are just seeing the beginning of the types of industries
    that it can enter into. Because of the increasing need for on-
    demand services and demand for that, you are going to see
    millennial entrepreneurs create all sorts of businesses to make
    our lives easier.
        But then, on the flip side, as you project out over the
    next 10 to 20 years, as this workforce is aging and they are
    thinking about starting families and buying cars and buying
    houses, then we have to make sure that they have some basic
    security that undergirds that type of work. So you are going to
    have some dynamic entrepreneurs creating the services, and then
    you are going to have a number of gig-style workers who will be
    not employed but working as 1099 employees primarily in those
    services. And I think if we provide some basic level of
    security for those workers, that can serve as a platform for
    more and more innovation. And I think the entrepreneurs
    starting those businesses want to see their workers properly
    supported.
        Chairman CHABOT. Thank you very much. My time is expired.
        The Ranking Member, the gentlelady from New York, is
    recognized for 5 minutes.
        Ms. VELAZQUEZ. Thank you. And, really, it has been quite an
    interesting panel. Thank you so much for being here.
        Mr. Olikara, I have 200,000 millennials in my district.
        Mr. OLIKARA. Do you like all of them?
        Ms. VELAZQUEZ. A lot of energy. It is a lot of energy, I
    can tell you that. We did an event in my district where we had
    a panel such as this one to listen to them.
        So, Mr. Olikara, our nation's student loan debt is nearing
    $1.5 trillion, and small business startups are lagging.
        Mr. OLIKARA. Right.
        Ms. VELAZQUEZ. What can we do to help millennial
    entrepreneurs deal with their student loan debt while trying to
    start a business?
        Mr. OLIKARA. Thank you, Congresswoman. This is a huge, huge
    issue for millennials. The student loan debt crisis is weighing
    down millennial entrepreneurship right now. Currently, if you
    total student loan debt, it exceeds credit card debt in this
    country, and roughly, each millennial has about $26,500 of
    student loan debt.
        And what is interesting is that picture is contrasting this
    other picture that is emerging of millennials who want to start
    businesses. The Kauffman Foundation found over half of
    millennials have either started businesses or would like to
    start one. And the first thing you need when you start a
    business is financing. And if you are not personally wealthy
    yourself, you have to go out and find other forms of financing.
        So I think there are a couple things that we need to look
    at. One is that we can help incentivize employers to provide
    student loan repayment programs. So the jobs that millennials
    have prior to starting their businesses could help start to pay
    down their student loan debt.
        And then, for other millennials who are deciding to perhaps
    go into public service, we need to have stronger public service
    loan deferment or forgiveness for those millennials. But I
    think the big picture here is it is not important just for
    millennials; it is important for the entire economy because
    studies have found, since 1980, virtually all net new job
    creation has come from these types of startups. So, if we want
    to see economic growth for the entire country, we need to do a
    lot more to reduce the burden of student loan debt on
    millennials.
        Ms. VELAZQUEZ. I invite you to look into my legislation,
    H.R. 201, to reward young entrepreneurs by offering loan
    forgiveness when they start a business.
        Ms. Dougert, the gig economy has changed the way employees
    and business owners are defined. What is the primary difference
    between a solopreneur and an employee, and why would a worker
    want to be a solopreneur instead of an employee?
        Ms. DOUGERT. Thank you for the question. So, when we are
    talking about solopreneurs and nonemployer firms, we are
    referring to small businesses that technically have zero
    employees but, as the statistics are showing, are employing an
    average of 2.2 people beyond themselves to run their business
    operations. So, while there are no employees helping out, there
    are gig workers helping to run these solopreneur nonemployer
    firms and operations.
        Ms. VELAZQUEZ. Anything else?
        Ms. DOUGERT. Does that answer your question?
        Ms. VELAZQUEZ. Yes, yes.
        Ms. Kirby--thank you--as an entrepreneur who is also a
    mother, can you talk about the opportunities and challenges
    that mothers working in the gig economy face?
        Ms. KIRBY. Well, there is a lot. Speaking to debt, which I
    think--and access to financing is definitely always an issue
    across the board. As for mothers, childcare, we are finding a
    lot of women who would like the opportunity to be able to
    explore their passions but feel that the cost of childcare is
    cost-prohibitive, and they are choosing not to explore those
    businesses.
        We are looking at solutions of coworking and childcare, so
    childcare being provided within our coworking spaces. That is
    definitely something that is on the rise that we are seeing
    more and more of. As a female entrepreneur, I also run a
    networking group called Kick-Ass Female Entrepreneurs, with
    1,200 women throughout Central PA. And childcare is probably
    one of the number one issues that we face.
        Ms. VELAZQUEZ. Well, the Democratic Women's Caucus has four
    pillars, and one of them is childcare, to help women.
        Mr. Olikara, over 20 million people gained health insurance
    through the ACA, but the continuing effort to undermine the law
    has undone much of this accomplishment. Can you talk about the
    importance of the ACA and the access to adequate healthcare for
    millennial entrepreneurs?
        Mr. OLIKARA. Sure. Thank you, Congresswoman. Well, it has
    been extremely helpful not only for this emerging workforce but
    for me personally. I used to be in the gig economy, and one of
    the most important things during that time period was being
    able to stay on my parents' health insurance plan, because I
    was under the age of 26 at that time. And I remember thinking
    as I was taking advantage of those benefits that I wish we
    could just take the partisanship out of that issue because if
    you think about it, that provision in the healthcare law has
    helped bolster the entrepreneurial prospects of a generation of
    young people who otherwise wouldn't have that type of health
    security.
        So I think that is extremely powerful and relates to the
    earlier point I was making in terms of creating this platform
    for young entrepreneurs to succeed. That includes healthcare
    benefits but also many of the other benefits that we have been
    talking about. It is not so much a debate, in my opinion,
    between, you know, big and small government. It is how
    government can be a jumping-off point for entrepreneurs to
    succeed and create growth in the economy.
        Ms. VELAZQUEZ. Thank you.
        Chairman CHABOT. Thank you. The Ranking Member's time has
    expired.
        The gentleman from Iowa, Mr. King, is recognized for 5
    minutes.
        Mr. KING. Thank you, Mr. Chairman.
        I want to thank all the witnesses for your testimony.
        I am sitting here thinking how things might have changed. I
    was a young entrepreneur in 1975, when I looked around, and I
    came home, and I told my wife: Today I am a man.
        And she looked at me with that bored ``what else is new?''
    Well, it actually was new because I had decided to take
    responsibility for our lives together. And a couple of months
    later, I managed to convince a banker to loan me 100 percent to
    buy an old beaten-up bulldozer. And the rest is I guess a long
    saga of ups and downs that today is a second-generation company
    that is I think very successful, at least by my standards.
        And a week ago Monday, the banker that loaned me that money
    and took a bit of risk to do so passed away, and we celebrated
    his life, how many lives he changed with that financing. And
    just through the things that that enabled me to do, from a
    company that is spreading out and taking care of the third
    generation of my family, the politics that flowed from it, the
    career that flowed from it. My message to them was there is a
    lot of us that had a wonderful life because of the one
    wonderful thing that he did.
        So, when I listen to the difficulty in reaching financing,
    Ms. Dougert, and one-third of one-third is one out of nine. So
    I want to ask you first, what are some of the reasons for
    turning down the finances on that? What are some of the
    barriers that are there? Are they different now than they were
    then?
        Ms. DOUGERT. Sorry, can you clarify turning down? You mean
    why----
        Mr. KING. When they are denied financing. I mean, I am
    going to say here are some things I know. Like, you don't have
    a cashflow plan that works. You don't have any capital. We
    don't really measure that you have the character to come
    through, the judgment of those kind of things.
        Is that generally still the same reasons that were there 43
    years ago, when I began a business? Because I had a few that
    said no to me. I had to find a way to sell them. And I think
    this marine knows how to solve some of these problems too. But
    you can't let up. So what I am trying to get to is, yes, we
    have a gig economy going on, and that is a result of a number
    of things and you have described some of that, but the barriers
    seem to be the same to me. You have to find--you have to have
    the instinct and the intuition to find a way to penetrate in,
    get your start.
        Maybe I will swing over here to Ms. Kirby. You have done
    this. You have got this operation going on with about 16,000
    square feet and lots of people churning around in there.
        Can you tell us a little more about day-to-day? I didn't
    get that out of your testimony. How did this get built? What
    does it look like when you walk in there and you see this buzz
    of activity? Tell me how that all came together in your mind
    and how it looks today.
        Ms. KIRBY. Well, I was working from home, and I was really
    isolated, so I was looking for opportunities to network. And I
    started a group called the Creative House of Lancaster back in
    2007. And that was just a meetup basically of freelancers and
    creatives, and we started just getting together once a month.
    And we identified a need fairly quickly that we were all kind
    of working from home and isolated and needed that support.
        So what I did was I grew a community for 3 years before I
    opened up the coworking space. And that is something that we
    actually advocate for a lot of coworking spaces to do. It is
    not a ``if you build it, they will come'' kind of philosophy.
    If you can grow that community first, then you have the support
    that you need. We opened our doors in 2010 with 15 members, and
    we were completely sustainable because we asked those members
    to come to the table and actually help get this space open.
        That was when we first started in our first location, which
    was about 5,000 square feet, and we have grown to two locations
    and 16,000 square feet. Again, we just go back to our
    community. We say, hey, together, we can actually, you know,
    share space, share resources. But----
        Mr. KING. Did you have trouble with financing?
        Ms. KIRBY. So it was really funded by the membership. And
    because I run my design and marketing company out of The Candy
    Factory, I actually don't pull any salary from The Candy
    Factory, so it is all reinvested into the growth of it.
        Mr. KING. I get it. You are a natural entrepreneur. You saw
    the need, you built your company. You saw the need, you built
    the community. And then the demand is what set this up then.
        Ms. KIRBY. Right.
        Mr. KING. And I would say that to anybody out there is that
    don't grow to anticipated demand, but grow to that demand that
    exists so that you are satisfying your customers.
        Just as my clock ticks down, I just want to say that my
    observations are that there are some barriers that are greater
    than there used to be, and I believe one of them is the ACA
    because we have unaffordable healthcare. And the other one is
    Dodd-Frank and achieving finances. I talk to bankers
    consistently, and they say: I can't give those kinds of loans
    anymore because I am too tied down by too much heavy
    regulation.
        So I think some of these solutions are open the door up so
    that a little more risk can be taken by the lenders, and they
    can take the risk with the borrowers.
        And another thing that, if the Chairman will indulge me and
    just a concluding statement here, is that I think that your
    generation, the youngest among you anyway, has lost something
    that used to be. And that is that young people--when I was a
    young man looking at these, we would say--we would look around,
    and we would come up with an idea, and we would say: Well,
    there is no law against it. It meets our moral standards; let's
    go do it.
        Now I hear: Nobody is doing this. There must be a rule
    against it. I guess we have to get permission.
        If you think in terms of you have to get permission, it is
    a lot harder to be a successful and robust entrepreneur.
        So I appreciate the testimony here today.
        And thank you, Mr. Chairman. I yield back the balance of my
    time.
        Chairman CHABOT. I thank the gentleman. The gentleman's
    time has expired.
        The gentleman from Pennsylvania, Mr. Evans, who is the
    Ranking Member of the Subcommittee on Economic Growth, Tax and
    Capital Access, is recognized for 5 minutes.
        Mr. EVANS. Thank you, Mr. Chairman.
        I would like to ask this question to the panel as we talk
    about this gig economy. The current subcontracting process is
    vast and sometimes complex while the contracting economy is
    ever merging with the gig economy. So I am interested in asking
    you that question across the board because you describe this
    gig economy, and then we have the subcontracting process.
        Obviously, the Federal Government is huge as opportunity.
    Is there some way that you view, in terms of bringing that
    together, that contracting economy merging with the gig economy
    and your thoughts? Start down the line. Anybody have a
    reaction? I feel like you have a reaction----
        Mr. OLIKARA. I always have a reaction. Well, I think, if I
    understand your question correctly, you have the contract
    economy and the gig economy, and those create slightly
    different types of work.
        Mr. EVANS. Correct.
        Mr. OLIKARA. And then creates potentially some confusion as
    here thinking about benefits and just doing your taxes and
    things of that nature. That is an interesting point that I
    honestly hadn't thought of previously, but I do think if there
    was some level of merging between all of the paperwork that is
    required for the separate economies, then I do think it would
    make it to be a more seamless and easy process for the workers
    who are going through this.
        I will say, you know, in the early days of being an
    entrepreneur, I was self-employed, and I remember thinking just
    the difficulty of dealing with all the paperwork and all the
    things that you actually take for granted when you have a
    traditional employer. So I think the things that we can do to
    make that easier for these young entrepreneurs, especially in
    those early days when they are just starting out, would be very
    helpful.
        Ms. KIRBY. One thing that we try to do, kind of
    piggybacking off of that, is we really try to get small
    businesses or if you have an idea to the resources that they
    need as soon as possible. And that is why I think coworking is
    so essential is because we become these pipelines.
        And I really think that helping identify what you are, how
    you incorporate and your business plan and figuring out taxes,
    which is incredibly difficult, kind of helps define contract
    versus freelancer, that kind of thing. But I think it is really
    access to resource and support and information. And I think
    that that is something that we need to keep continuing to grow.
        Mr. EVANS. Any thoughts, Mr. Morris?
        Mr. MORRIS. No, sir.
        Mr. EVANS. Any thoughts?
        Ms. DOUGERT. I think another important step to take going
    forward is to make sure that we are properly counting these
    types of workers because, right now, you hear a lot of
    different terminology from the workers themselves being
    independent contractors, freelancers, gig economy workers, and
    then, on the small business side, nonemployer firms,
    solopreneur firms. And we know that some of these gig workers
    may, in fact, be running small businesses and not even realize
    it and just think of themselves as a babysitter, a part-time
    dog walker. So I think until we know who exactly we are talking
    about and how many of them there are, we will possibly be
    underestimating the economic impact. And I think that that is a
    good first step.
        Mr. EVANS. Ms. Kirby, the prediction that the majority of
    the U.S. workforce will be freelance by 2027, does this mean
    the end of traditional companies as we know it, and what is the
    most prevalent gig business in Lancaster? Since I am from the
    great State of Pennsylvania.
        Ms. KIRBY. Yes. Well, what we are seeing is more and more
    companies are seeing the value in hiring freelancers. They are
    saving time, money, on-boarding, all of that. So that is one
    thing that we are seeing as why this is growing so rapidly, and
    the benefit it can actually have for small businesses as a
    whole is being able to bring these contractors in who are
    experts and then their companies can scale. That is something
    that we do with The Sweet Core is that we are a small team of
    six, but as a company comes to us and has specific needs, we
    can bring in experts from inhouse, from The Candy Factory, and
    scale as we need it. So I think that that is a huge benefit.
        I think for the largest gig company you were saying in----
        Mr. EVANS. Yes.
        Ms. KIRBY. Oh, well, that is a good one. I am not 100
    percent. I can actually get that information and send that to
    you in writing, if that is okay.
        Mr. EVANS. Mr. Morris, again, thank you for your service.
    Obviously, as a former member of the military, you probably
    were the ideal person to start your business, requiring
    discipline and motivation and ability. You know, who are your
    role models, as you were pushing to think about entering this
    aspect of dealing with the economy?
        Mr. MORRIS. That is a great question. And surprisingly
    enough, some of my inspiration, so to speak, would be some of
    the people that were my officers, who looked at me and said, in
    so many words: I don't see anything in you, you know.
        And a lot of times, it is those who kind of push you down
    that help you. You know, you say--and this is what was in my
    mind when I started this: One day you are going to work for me.
        So that was my motivation. I don't care how old you are;
    you are going to work for me one day. So that was my
    motivation.
        Mr. EVANS. Thank you, Mr. Chairman.
        Chairman CHABOT. Excellent answer.
        The gentleman's time has expired.
        The gentleman from Iowa, Mr. Blum, who is the Chairman of
    the Subcommittee on Agriculture, Energy, and Trade, is
    recognized for 5 minutes.
        Mr. BLUM. Thank you, Chairman Chabot.
        And thank you to our panelists for being here today.
        Mr. Morris, thank you for your service to our country, and
    I love your attitude.
        Mr. MORRIS. Thank you, sir.
        Mr. BLUM. As I am thinking of the gig economy and whatever
    we call this, I am 63. So, back in my day, we used to think of
    your retirement as a three-legged stool, of which the person
    contributed to their retirement; the corporation, back in those
    days that they worked for for 20, 30, 40 years, contributed to
    their retirement; and then, lastly, the government contributed
    to it.
        And when I hear about the gig, the entrepreneurial type of
    economy, what immediately comes to my mind is so that corporate
    piece, most, not all, most corporations offer 401(k). They
    offer health insurance. They offer disability. They offer some
    type of retirement plans. If you're home in your garage--and I
    was one of those folks--working for yourself, you don't have
    those benefits.
        I somewhat see this trend putting pressure on our rapidly
    depleting government social program resources. The Trustees
    Report just came out yesterday. And Social Security they say
    will be out of money in 2034; and Medicare will be out of money
    in 8 years, 2026. So, not having a corporation there to help
    you with some of these things, tell me about what are your
    thoughts about that?
        A lot of people stay at companies because they have a
    retirement, which takes some of the pressure off the
    government; because they have benefits, takes pressure off the
    government. When you are doing your own thing, which I did,
    which I think is great, you don't have those things. So, all of
    a sudden, when you are in need, it is falling pretty much
    solely on the government. Thoughts on that?
        Ms. DOUGERT. Yeah. It is a great question. And those
    statistics are certainly sobering. I think that millennial gig
    economy workers are incredibly self-motivated as a group. That
    is part of their success is that they are excited about getting
    out of bed every morning and pursuing successful work that they
    believe in. And they value freedom and flexibility. But with
    great freedom comes responsibility.
        So we would hope and some statistics are pointing to
    millennial gig economy workers making enough money that they
    can potentially be putting it aside for their own retirement
    and healthcare and long-term planning. So this is an incredibly
    motivated and smart group of individuals, and I would certainly
    hope that they are planning to continue taking care of
    themselves as much as they can.
        Mr. BLUM. Mr. Morris.
        Mr. MORRIS. Me personally, I think that the millennials now
    are so concerned about right now. You know, we got the
    Instagram or the Facebook and all of these things that give
    information right now. I think the job market, at least as far
    as the freelancing is concerned, is in that same kind of path.
    I want something right now. And, like I said, I started my
    business because I wanted a massage chair. There was no, you
    know, future, ``Oh, I want a big house, you know, in 30
    years.'' I just wanted a massage chair. And it has turned into
    this--I will call it an empire, but it has turned into this
    empire that, you know, has been wonderful for me.
        So I don't honestly know if we are thinking of retirement
    or Medicaid, Medicare, whatever, because, you know, we are
    young, we are healthy and, you know, we are not worried about
    those things right now. That is my thoughts.
        Mr. BLUM. And that is a concern for the government. That
    would be of concern. Our savings rate I think is not very high
    in this country, maybe a percent. So I am just concerned that,
    because we are thinking of the here and now, that there is not
    being moneys set aside. I am not advocating working for big
    corporations; don't get me wrong. I am just concerned about the
    rapidly depleting government resources, that the money is not
    set aside.
        Ms. Kirby.
        Ms. KIRBY. I am optimistic. I mean, I see some amazing
    creative innovative young individuals working out of our space
    who are actually coming up with ways to be able to save money.
    We have a 19-year-old software developer who is investing. It
    comes down to education. He had education to learn how to
    properly invest, to properly save. I think a lot of people have
    kind of missed that. So I think coming--resources and education
    are really key. But I am seeing our members kind of rally
    behind each other as well and collectively try to support each
    other. But I think that those are all topics that are top of
    mind for this generation as well as the rest of us who are
    self-employed.
        And so trying to come up with creative solutions to help as
    much as possible, like the medical membership program, that
    kind of thing. How do we reduce some of the cost so that we can
    save more and we can give back more as well? And maybe that
    happens collectively.
        Mr. BLUM. If the chair would indulge me, could our last
    witness answer the question? Thank you very much.
        Mr. OLIKARA. Thank you, Congressman.
        Just to add one piece to that, I think if--you are right
    about I think the long-term concerns. If we want to focus on
    just a few years of where having some security would be very
    helpful, it is just in those early days of starting your
    company. As I am sure you recall from your own story, those are
    often the most difficult. And for the successful millennial
    entrepreneurs, then they can start to create more traditional
    HR platforms and create payroll and things like that. So they
    might be able to get onto a more normal field of, you know,
    human resources and benefits after they get their startup going
    for a little bit. So, in terms of our, you know, policy, if we
    can figure out a way just to be supportive in those early days,
    in the first, you know, year or 2 years, 3 years, then I think
    that can have a huge, huge impact.
        Mr. BLUM. Thank you for your indulgence. I yield back.
        Chairman CHABOT. The gentleman's time has expired.
        And, Mr. Morris, I think I am speaking for a lot of us
    here, but we have got to see this massage chair.
        Mr. MORRIS. It is, indeed, a rocket ship.
        Chairman CHABOT. It sounds like it.
        I would now like to yield to the gentlelady from New York,
    Ms. Clarke, for 5 minutes. Thank you.
        Ms. CLARKE. Thank you, Mr. Chairman.
        I thank our Ranking Member. I thank our expert witness for
    your testimony today.
        I just have a quick question as a followup to my
    colleagues. Are all of you paying into social security and
    Medicare?
        Mr. MORRIS. I am not.
        Ms. CLARKE. You are not?
        Mr. MORRIS. No.
        Ms. CLARKE. Interesting, okay. I thought that that was
    something that was mandatory, but I guess not.
        Let me just ask a couple of questions for this panel.
    Piggybacking off of a question that Ranking Member Velazquez
    spoke of initially, some workers in the gig economy classify
    themselves as small businesses, but they gain neither loyal
    employees nor control over the product or business that they
    want to grow.
        So is it fair for them to be considered small businesses?
    If not, doesn't that strengthen the argument that they are more
    like employees? And I want all of you to give some thought to
    that.
        Mr. MORRIS. I am sorry; I missed part of the question.
        Ms. CLARKE. Sure. Some workers in the gig economy classify
    themselves as small businesses, but they gain neither loyal
    employees nor control over the product or business that they
    want to grow, so they don't have a controlling interest.
        So is it fair for them to be considered small businesses?
    And if not, doesn't that strengthen the argument that they are
    more like employees?
        Ms. DOUGERT. May I start?
        Ms. CLARKE. Sure. That was actually for the whole panel.
        Ms. DOUGERT. Okay. I will kick it off. So, at SCORE, we
    follow the U.S. Small Businesses Administration's definition of
    what counts as a small business, which can vary in terms of the
    number of employees and the amount of revenue that qualifies.
    It is widely still accepted that fewer than 500 employees
    counts as a small business, which a lot of people would argue
    is quite a broad definition.
        But we believe that any entrepreneur, whether they are
    officially a solopreneur or a gig economy worker, could be
    considered as working for or owning a small business because of
    the business activities that they engage in. So, regardless of
    their official classification as a sole proprietor or a C corp
    or what have you, they are most likely serving multiple
    clients. They are possibly engaging contractors to support them
    in their business operations, and they have the ability to keep
    growing or to fail.
        So, actually, 43 percent of SCORE clients are considered
    prestart business owners, meaning they are still in the idea
    phase. They are planning. They are learning how to structure
    their business activities to help them achieve success. And we
    are very proud to support them in their dream of growing or
    even starting their small business.
        Ms. CLARKE. Did anyone else want to try at that particular
    question? I see heads nodding.
        Ms. KIRBY. Just to add to that, I mean, I think a lot of
    our solopreneurs are doing just what you had said, where they
    are working with multiple clients. They are able to then go
    into these companies and offer the expertise that they have to
    help those companies continue to grow. So classifying them I
    think as small businesses does make sense because they are a
    small business offering a service and then scaling potential
    other businesses as well.
        And we see a lot of our solopreneurs actually grow into a
    more kind of official company with hiring additional either
    contract employees or hiring employees. So they are using that
    as a place to kind of spearhead to a larger company.
        Ms. CLARKE. Let me ask you, Mr. Olikara, how do we assure
    that the gig economy workers get paid and sick leave?
        Mr. OLIKARA. Thank you, Congresswoman.
        I think it is a very good question. We are seeing a few
    models at the State level that we should look at closely,
    bipartisan models that, again, in the early days of being an
    entrepreneur. In the State of Washington, for example, they
    have a bill right now that would require, you know, gig economy
    services to pay into basically a portable benefits entity that
    would provide those benefits like childcare, sick leave, et
    cetera. And then, as a result, when they are moving from gig to
    gig, those benefits would stay with them.
        Ms. CLARKE. It is portable.
        Mr. OLIKARA. Yes, it is portable. Exactly, exactly. And I
    think that is good for not only, you know, a particular State,
    but it is good for our whole country because that really helps
    that entrepreneur have the security to be able to really get
    their business going. So I think that is one option.
        Ms. CLARKE. This is a law that they are developing in
    Washington State?
        Mr. OLIKARA. It hasn't become law yet. It is a bill that
    has been drafted and introduced. And there are a few examples
    of that around the country as well.
        Ms. CLARKE. Very well.
        Mr. Chairman, I yield back.
        I thank all of you once again for your expert witness here
    today.
        Chairman CHABOT. Thank you very much. The gentlelady's time
    has expired.
        The gentleman from Utah, Mr. Curtis, is recognized for 5
    minutes.
        Mr. CURTIS. Thank you very much, Mr. Chairman.
        And, Ranking Member, I don't want to contest your claim
    about the most amount of millennials, but I will say this, that
    my district has the youngest age of all districts in Congress
    at 27 and a half years of age, and certainly, we have a lot of
    millennials in that group. Utah was actually ranked in the top
    10 for the best places for millennials, and we are in the top
    five for unemployment for millennials.
        Now, I know you are looking at me and you are seeing my
    hairline and my pending AARP age, but I consider myself a
    millennial.
        Mr. OLIKARA. We accept you, Congressman.
        Mr. CURTIS. Thank you. I think if you could see my socks.
    Like you, I struggle what to watch on Netflix. I mean, I am
    right there with all of you. I actually believe being a
    millennial is far more a state of mind than an age.
        Mr. OLIKARA. Absolutely.
        Mr. CURTIS. And to demonstrate that, and I will apologize
    to my fellow colleagues here who may not be up on their GIFs
    and their memes, I actually think that me and Steve Buscemi
    have a lot in common. How do you do, fellow kids, right?
        Now, with that in mind and my feeling like I have a
    connection with millennials, I have observed a couple of
    problems that I would like to brainstorm with you. And one of
    them is the seemingly lack of desire or unwillingness to engage
    in government. And a lot of the things that you are asking for
    need engagement. They need advocates.
        Can you give me, from your perspective, anything that you
    have seen that successfully engages them in government and gets
    them to care about their Congressman or their voting or local
    officials?
        Mr. OLIKARA. I can take a stab at that. Thank you,
    Congressman. It is the issue that keeps me up because it has
    truly been the calling of my life so far to be able to engage
    millennials in the political process. And the great dichotomy
    we have in our country today is that you have a highly
    idealistic generation that has the highest service
    participation rates in the country and yet at the same time
    have the least trust and confidence in government. There is a
    study from Harvard that showed a majority of millennials don't
    believe that government and politics will solve the problems
    that we face.
        So it is my opinion that the way we start to change that
    narrative is demonstrate real impact through politics on the
    issues that matter. And I think this is the perfect example of
    it. If, you know, this Committee and this Congress can come
    together in a nonpartisan fashion to support millennial gig
    workers, that is an example of impact, and that creates a
    feeling of motivation for more millennials to engage in
    government.
        It is a bit of a chicken and egg problem, as you are
    referring to, Congressman, because you actually need more
    engagement ideally to get the right policies done. And I just
    think it really falls on us, you know, it falls on the
    Millennial Action Project, it falls on Members of Congress to
    be actively engaging millennials in that process.
        Mr. CURTIS. I agree with you in several areas. One, this is
    a demographic that is very giving. They will jump into a cause
    really very quickly. But to try to get them to jump into a
    civic government cause is more difficult.
        And one of my worries is that, as we try to get them to do
    that or as we pass legislation that would accomplish some of
    the things, it is going to actually suck the life out of some
    of the innovation, right, and some of the beauty of what you
    have got. And we are trying to structure you, right? And part
    of your success is not being structured.
        And so, to myself and my colleagues, you know, just a
    warning that, as we try to help you accomplish these goals, we
    have got to kind of come at it with your mindset rather than
    our traditional mindset of we are going to structurize this,
    and it worked for us, and it is going to work for you.
        I don't know if you have any other comments on, how do we
    get them engaged? Another question I would have, I know, at
    least in my district, we don't have near the representation
    from women in our entrepreneurial demographics, and I am
    wondering if you have any suggestions on that as well.
        Ms. KIRBY. I can speak to that a little bit. We have found
    that there are a lot of, you know, female entrepreneurs who are
    under the radar that we don't even really know are there. And
    so what we have actively tried to do is create opportunities
    for them to gather and to connect. And so that is what the
    meetup that we have every month is. So it is like drawing them
    out and showing them that there are resources here available,
    but there is also a network here to support each other, or if
    you are an aspiring entrepreneur, you don't even have to be a
    small business owner to participate. It is really about saying,
    how do we cultivate that? And a lot of times it is having some
    leaders within the community help stand up and help rally
    women.
        Mr. CURTIS. I regret that we are out of time because I
    would love to continue this discussion and invite all of you to
    come out to my district in Utah to further this discussion and
    see if we can help you. Thank you.
        Chairman CHABOT. Thank you very much. The gentleman's time
    has expired.
        The gentlelady from North Carolina, Ms. Adams, who is the
    Ranking Member of the Subcommittee on Investigations,
    Oversight, and Regulations, is recognized for 5 minutes.
        Ms. ADAMS. Thank you, Mr. Chairman.
        And let me thank all of the folks who are testifying today.
    I don't necessarily consider myself in that group. I have
    children and grandchildren who are, though.
        I was really fascinated by the story about the chair and
    the work that you are doing with dogs, and I thought you were
    going to get to where your dogs also participated in the chair
    and----
        Mr. MORRIS. Absolutely not. The chair is too much money.
        Ms. ADAMS. Just for you. Okay, all right. Now we have
    cleared that up.
        Let me ask Ms. Dougert, I want to basically continue with
    the discussion about women. Mentoring has been mentioned as a
    helpful tool, and some studies suggest that women benefit even
    more from mentoring than men. So how do we better facilitate
    successful mentorships for millennial women?
        Ms. DOUGERT. Thank you, Congresswoman Adams.
        I would like to draw your attention to the latest Megaphone
    of Main Street data report from SCORE, which was on the topic
    of women's entrepreneurship. I would be happy to send that your
    way for more detailed statistics.
        But basically, what that research shows is that women are
    starting businesses at a much faster rate than men, about five
    times the national average, and yes, that mentoring matters and
    mentoring works for women entrepreneurs, just as it does for
    all entrepreneurs.
        One very interesting finding was that women entrepreneurs
    did not necessarily have more success with women mentors. That
    was something that we had expected to see and did not see in
    the research data. More important than the gender of the mentor
    was the effectiveness of the mentor. Five characteristics were
    pulled out as particularly important, things like their
    helpfulness, their listening skills, how respectful they were,
    how accurately they were able to assess an entrepreneur's
    particular situation with all of its unique challenges and
    advantages, and last and possibly most important, the ability
    to provide useful, specialized advice.
        So that is great news for SCORE because we have always
    known that mentoring matters because it works. Small businesses
    are more successful when they have the help of an experienced
    mentor, like the 10,000 that we have at SCORE. And more than
    half of our clients are women, but we want to make sure that we
    are continuing to bring in all sorts of different clients and
    help them however they need to be helped.
        Ms. ADAMS. Thank you. I was just really excited about
    SCORE, and I actually sponsored the bill for that, and I think
    it is doing a lot of good.
        So let me ask Ms. Kirby, a mentor relationship adds
    enormous benefits to any entrepreneur, including building
    confidence, providing advice, facilitating a larger network,
    and helping to develop skills.
        So what are some of the challenges that women face in
    assessing high-level mentors, in your opinion?
        Ms. KIRBY. I think that one thing that we have noticed with
    dealing with female entrepreneurs is the fact that they do like
    to see other women in leadership roles helping guide them,
    whether or not the efficiency is there. But just seeing, you
    know, individuals who are going through similar struggles who
    can--you know, as women, we have unique challenges. And so we
    have found that if we can find women within our community who
    are leaders within the community to kind of help rally the
    women who are considering becoming solo--you know,
    entrepreneurs and/or trying to grow a business, if we can try
    to help pair them up with the resources that we have available.
    I think, again, it just comes down to access to low-cost/no-
    cost resources to help women especially connect to what is
    available there and really kind of encouraging leaders within
    our community to help kind of step up and actually give back as
    well.
        Ms. ADAMS. Thank you. You can be what you see.
        Mr. Olikara, how do we ensure that the gig economy workers
    get paid and sick leave?
        Mr. OLIKARA. I think that is a very good question. Thank
    you, Congresswoman. I think on this topic of portable benefits,
    we are seeing some great innovations and experimentations at
    the State and local level. And I think under business as usual,
    those benefits are not going to be provided. So I do think
    there is something we need to do to provide paid and sick leave
    to gig economy workers.
        Ms. ADAMS. Thank you.
        Mr. Chair, I yield back.
        Chairman CHABOT. Thank you. The gentlelady yields back.
        The gentleman from Florida, Mr. Lawson, who is Ranking
    Member of the Subcommittee on Health and Technology, is
    recognized for 5 minutes.
        Mr. LAWSON. Thank you, Mr. Chairman.
        And welcome to the Committee. I want to let you all know
    that I am from the government, and I am here to help you. And
    so my question, can all of you discuss the future of the gig
    economy and what role Federal regulations play in promoting,
    stiffen the growth of the gig economy?
        Mr. MORRIS. I can't speak to the Federal portion, but as
    far as the future of the gig economy, I think platforms like
    what I am using, Thumbtack, which make it a lot easier to be
    put out in front of, you know, the bigger businesses that have
    the $20,000 and $30,000 for advertising. I think with those
    kind of tools and things, you know, people will start to say:
    Oh, man, I am great at underwater basket weaving, you know.
    Somebody wants that.
        And they can use a platform like Thumbtack to put their
    name out there without spending, you know, the $10,000 and
    $20,000 and get recognized.
        So I think the more that people start to see that their
    talent, whatever that may be, can be marketed and it doesn't
    cost an arm and a leg to begin or start, I think that is going
    to grow the gig or the freelance work exponentially.
        Mr. LAWSON. I would like each one of you to comment on that
    question. How the Federal Government--I mean, I shouldn't say
    the Federal Government, but Federal regulations.
        Ms. DOUGERT. So our clients tell us that they are not
    making the decision to start or grow their business, based on
    regulations, changes to the Tax Code, things like that. We know
    that it does affect them in their operations, and certainly any
    policies that are lessening the financial burden for
    entrepreneurs are a good thing. But when we have asked them,
    you know, whether some of the bigger changes in the past couple
    of years are affecting their decision to start or to expand,
    they tell us that it is really not affecting them on that
    level.
        As to the technology portion of your question, I think that
    is a huge part of why the gig economy is continuing to grow and
    will continue to grow. The research shows that solopreneur
    firms are outpacing employer firms in their growth and that
    independent workers are also on a strong upward trajectory.
        And I think technology is a huge part of that because
    different tools like videoconferencing, even things like online
    banking and virtual assisting, are making it more possible than
    ever to efficiently conduct business from anywhere in the
    world, wherever you want to be working. And all of these tools
    are only getting better and better as we move forward.
        Mr. LAWSON. Ms. Kirby, did you want to respond?
        Ms. KIRBY. I really can't speak to the Federal regulation
    piece. But I think for growth, why we think coworking is such
    an important essential role to the growth of the gig economy is
    the networking that happens and the collaboration that happens
    within our spaces. We also have a coworking visa program, which
    allows our members to have access to coworking spaces all over
    the world when they travel because you do find a lot of workers
    within the gig economy are a little more transient. They do
    travel a good bit as well. And so we want to make sure that
    they are tapping networks and resources that are available
    throughout the country and also globally.
        Mr. OLIKARA. Thank you, Congressman. I will just add a
    couple quick comments here. Building on what Ms. Kirby
    mentioned, the most important thing that I think helps, you
    know, gig economy entrepreneurs is the power of networks, being
    able to easily get in contact with potential partners,
    potential buyers, potential vendors, et cetera. We actually
    work in a coworking space as well. I often talk about the
    office space dividend when you are surrounded around other
    entrepreneurs and other startups.
        The hardest thing for entrepreneurs is often the
    administrative side of things, which I think does intersect
    with your question about Federal regulations. And I think all
    of you can probably speak to this. As a young entrepreneur, you
    get into that. You take the big leap of faith because you care
    about the mission of what you are trying to do. The whole
    administrative and compliance aspects of that are not what got
    you into it in the first place but are extremely important to
    be running as a legitimate business. And so I think thinking
    about those areas where we can streamline Federal regulations I
    think will have a very strong upward effect for these
    entrepreneurs.
        Mr. LAWSON. Okay. Mr. Chairman, if I can get one answer
    from Ms.--and I know my time is running out. May I?
        Chairman CHABOT. Yes.
        Mr. LAWSON. Recently, we passed a major tax package, which
    everyone said that it bails out big businesses, and they are
    going to reinvest in the economy and stuff. How has the tax
    package that we passed really caused any problem for the gig
    economy, or have you even thought about it?
        Ms. DOUGERT. Me?
        Mr. LAWSON. Yes.
        Ms. DOUGERT. So that question was asked in a different form
    at a hearing that the entrepreneurial development partners
    attended with the Subcommittee on Infrastructure that
    Congresswoman Adams runs. And the I think surprising answer was
    that it had not--I think there hadn't been enough time for it
    to affect the business owners' bottom lines, budgets,
    paychecks. So that the impact hadn't really sunk in yet because
    the consensus from them, which is consistent with what our
    SCORE clients have told us, is that it wasn't having a huge
    effect on them at the time.
        Now, we know that, of course, it will have an effect on how
    they conduct business, possibly who they can hire, but I think
    it might be a little bit too soon to tell.
        Chairman CHABOT. The gentleman's time has expired.
        Mr. LAWSON. I yield back, Mr. Chairman.
        Chairman CHABOT. Thank you very much. We have had lots of
    questions from both sides. I think it has been an excellent
    hearing this afternoon, and that is thanks to the really great
    panel that we have had here this morning and now into this
    afternoon.
        The gig economy in some form or called perhaps by some
    other name has been with us for a long time, but with the
    growing importance of millennials in the American economy, it
    is even more important and growing all the time. So it is
    important for us to understand its role and to be able, through
    the policies that we impact here in this Committee and with the
    committees that we interact in, whether it is tax policy or
    regulations or access to capital, to understand it, and you
    have really helped us to do that.
        So I want to thank each and every one of our panelists here
    for really great testimony here this morning, especially the
    one from William and Mary. But, you know, you guys were all
    great, all great. Go Tribe.
        I would ask unanimous consent that members may have 5
    legislative days to submit statements and supporting materials
    for the record.
        Without objection, so ordered.
        And if there is no further business to come before the
    Committee, we are adjourned.
        [Whereupon, at 11:05 a.m., the Committee was adjourned.]

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