The midterm elections delivered what has become the defining feature of modern governance: legislative gridlock. With Democrats controlling both the Senate and the House while a Republican occupies the Oval Office, Washington is paralyzed.
Across the Mediterranean, Israel faces its own structural impasse, with endless coalition bargaining attempting to govern an exhausted public. In both capitals, candidates won campaigns by promising to ease the cost of living and defend working families. Yet both political systems remain hopelessly blind to how people actually earn a living today.
Walk down any street in Chicago, Phoenix, or Tel Aviv, and the myth of the single, stable 40-hour office job collapses. Millions of people survive skyrocketing rents and stubborn inflation by assembling dynamic careers across multiple platforms. A typical worker spends the morning at an administrative corporate desk, manages a freelance client project from their laptop by afternoon, and logs onto a rideshare or food delivery platform at night. They are not juggling three gigs for amusement; they do it because a single paycheck no longer covers basic living expenses.
Yet our labor laws remain stubbornly trapped in the mid-twentieth century. The legal framework still operates on the obsolete assumption that every citizen clocks into an assembly plant in the morning, collects a predictable pay stub at month’s end, and retires decades later with a guaranteed pension.
In Israel, this manifests as bureaucratic stagnation: the law recognizes only a rigid binary where you are either a traditional employee or an independent contractor. Anyone navigating the middle ground drowns in paperwork, leaving judges and endless lawsuits against gig companies to patch the holes left by an inactive parliament. In Washington, the problem is ideological polarization. The Democratic-led Congress predictably pushes to reclassify independent workers as traditional corporate employees under union-backed frameworks, only to face a presidential veto. The White House counters with executive actions favoring complete deregulation, which courts and congressional committees promptly dismantle.
This paralysis is economically reckless. Leaving the sector unregulated creates a massive fiscal sinkhole. The IRS faces an annual tax gap nearing seven hundred billion dollars, while in Israel, lost revenues from the shadow economy reach tens of billions of shekels, driven by underreported non-wage income from informal and contract work.
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In traditional employment, automated tax withholding at the source ensures full compliance and near-perfect reporting, while in the fragmented, flexible labor market, bureaucratic friction crushes compliance rates and pushes many workers under the radar. Worse, by keeping the independent workforce outside automatic retirement and savings mechanisms, policymakers in Washington and Jerusalem are quietly engineering a social crisis.
When millions of flexible workers reach retirement age without accumulated savings, they will immediately become a burden on Israel’s National Insurance Institute and on federal social welfare and healthcare systems in the United States.
We do not have to choose between market flexibility and basic worker dignity. Protecting workers does not require forcing everyone back into rigid corporate shifts that modern workers themselves increasingly reject. The path forward begins by recognizing a third legal status—the dependent contractor—designed specifically for flexible platform and project work.
Alongside this status, we must deploy universal, portable benefits that attach to the worker rather than to a single employer. If someone logs fifteen hours for one platform and ten for another, each company must contribute a proportional share into a single, worker-owned safety-net account that funds sick leave, healthcare access, and retirement savings.
To make the system functional, governments must replace archaic annual filings with automated, per-task digital clearing. Automatically withholding baseline social contributions and tax liabilities with each completed transaction removes the administrative burden from workers, gives businesses legal certainty, and guarantees a steady revenue flow to the state.
Neither a divided American government nor a newly minted Israeli cabinet can reverse the realities of the modern economy. The era of one worker, one desk, one lifetime pension is gone. Leaders in both nations must stop fighting over twentieth-century dogma and build a safety net that protects the modern workforce.
- The writer is the founder and CEO of Xtras, an on-demand flexible staffing platform.