[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
                   
                   
                               __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
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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