The Gig Economy’s False Promise
nytimes.com
nytimes.com
For some reason we celebrate this trend as a society and laud its positives (e.g. being able to determine one's own work schedule), but in a decade or two the problems will become obvious and hard to ignore, as many gig workers find themselves too old to work but with no retirement savings, for example.
This is, of course, something of a Hobson's choice. They can't work their own schedule; they have to work to the schedule of the temporary employer. The choice they have in this is to simply not work at time X, rather than move their work to time X.
If people aren't prepared to give you money for it, it's obviously not creating as much value as you think it is. That's nobody's fault but your own.
How does a wild animal feed his family if he can't catch any food? He gets out-competed by more effective individuals.
Given finite resources and unbounded population growth, population must grow to the point where there are not enough resources to support everybody, and then some people have to start dying.
Which I pay for with money from...where, exactly?
That being said, most people participating in the gig economy need access to the Internet to even participate, so most likely already have both a company and internet access.
The people you should be worrying about are those that have no under-utilized assets to capitalize on such as a car or spare room.
200 bucks a lot for some people, and you have to pass a credit check to get xfinity access.
> That being said, most people participating in the gig economy need access to the Internet to even participate, so most likely already have both a company and internet access.
Cell service != general internet service.
Try bootstrapping yourself into a tech job with only cell phone access. That may work in the third world where the standards are lower, but not in the West.
You don't need to have constant internet access to be able to be productive on a computer. In fact, I'd argue that often not having internet can make you more productive, by not giving you any distractions.
Well, if you know your entire domain well, at least. At work I'm constantly fighting frameworks or APIs or reaching edge cases or error messages I've never seen before that I've had to look up, so I'd be a lot less productive without internet.
But I can program for quite some time in Python, vanilla C#, and to a lesser extent Swift without looking anything up. And back in the day I knew Actionscript so well I never needed the internet to be productive (I miss those days).
Really, you need to be able to not have to context switch a whole lot. All-in-one platforms let you stay in one context; most modern web platforms force you to context switch all the damn time.
I agree with you, if you know your domain, you can probably do it (with headaches). If you don't, it's very hard or functionally impossible.
And even without compilers and interpreters, all you REALLY need is a text editor. Or pen and paper, in order to write code. Granted, it helps to verify the code works with compilers and interpreters, but it's possible to step through it manually yourself to verify its accuracy.
It's not too uncommon for me to write a chunk of code in a simple text editor, and then test and fix it up later.
If you're just getting started, download some technical books (you can find free ones online) or some step-by-step tutorials and work through them.
I actually got started programming in classrooms on my calculator, or in Q-Basic/HTML in the days of modems where I had to get permission to dial in to the internet, and everything went so slow I had to know exactly what I was going to get ahead of time, so I often went a long time before finding help online (which was pretty hard to find back then anyway).
I still managed to learn quite a bit. It's definitely possible. Not necessarily a perfect environment for coding, and definitely not ideal for a company that pressures you to perform at peak efficiency, but definitely possible.
Chief among these is the arbitrary requirement of many employers that a college degree, and particularly a degree specialized in the career field, is mandatory before any employment can occur.
Not only does this incur significant financial cost, but it also incurs a completely untenable time cost for most people aged 25+, who need to provide both physically and emotionally for themselves and their families.
While one could argue such credentials are important for life-or-death fields like engineering and medicine, the fact of the matter is that most college grads come out with a degree in a soft skill that doesn't really hold a strong relevance to the job they go on to fill in the workforce.
In reality, a college education functions as little more than a class filter. If we want improve accessibility for the self-taught and make merit more meaningful, we should stop demanding arbitrary credentials for jobs that don't really need them.
Time, opportunity, survival needs, many things curtail the ability of people to study.
The truth is that most people regardless of education and job don't realize how they utilize the 168 hours per week that we all get to split between sleep, work, eating and leisure. When I used to teach, I had students give me the excuse all the time that they didn't have enough time to complete the assignment. I would ask others in the class how long they spent on average and then ask the students making the excuse to give me a rough breakdown of how they spent their last 168 hours. After account for sleep, other classes, other work, meals and liesure, they would routinely be unable to account for about ~40 hours. Most hours are squandered.
You have to be very clear and ready to tell people that they have to give that up if they want to survive.
Because in the end that's what people want. A normal life.
Not everyone is passionate. Or driven, or interested in those things that can pay well.
Which means that those hours must be stolen from a whole constellation of distractions (which get better at keeping you engaged) and interactions with other people.
So people have to be made aware that they are going to be more unhappy not doing the work, than if they did do it.
Most people aren't going to think like that.
Most people aren't going to think like that.
That people will mix up normalcy for being coddled.
So your kids have to take a STEM course, because that's the only option to earn enough money (ps earning money != contributing to society).
Or you have to learn to code, even though you don't have the ability or aptitude to do it.
do note that this is not at all about coddling, which is a luxury long lost. Making it about coddling is straw manning the argument. There's massive numbers of people who are unviable today, and can't be retrained in any practical amount of time.
Earning money != equal to contributing to society, but prices are society's most effective way to communicate which contributions it considers value.
Using coding and STEM as your sole examples is a strawman. Mike Rowe, for example, has demonstrated on many occasions that we have a skills gap for many jobs which society needs done that you don't need higher education to perform. There are many jobs that society wants done that aren't STEM or software engineering.
https://www.inc.com/christina-desmarais/young-americans-have...
Once many of these and other in-demand jobs are lost to automation, I'll buy the argument that massive numbers of people are unviable, but until then, there are many that still are very much viable that just aren't looking at prices to determine what contributions society finds valuable.
> prices are society's most effective way to communicate which contributions it considers value.
But its not perfect. Its vastly imperfect - for a variety of reasons involving joins/intersections of various systems.
For example - media will always move towards the grosteque or attention grabbing. The feedback loop between
AD -> Money-> Attention competition -> More Attention grabbing ads -> Repeat,
is near guaranteed to spontaneously create the echo chamber effect because of human neurology.
Other examples - the failure of environmental protection, which also involves the direct manipulation of the information by vested interest who spread and maintain FUD.
Not to mention the straight up impact of concentration of wealth, and the ability of a few to then signal value disalgined with the values for the majority.
I've also seen the various examples for other industries, and they too will fail because re-training itself is a torturous and difficult process- even when you have all the time and resources you need.
Tech is a good example because its one of the easier and better covered fields.
84+56 = 140. 168 hours in a week. That's 28 hours left for everything that's not kids, work, and sleep. Fixing stuff around the house, keeping your relationship with your partner healthy-ish, prepping for the next day so you aren't constantly running late to everything, cleaning, entertainment, learning, everything. In practice you'll have an average of 2hrs/day that's actually free, maybe, without neglecting sleep, and they'll be your worst, lowest-energy, lowest-motivation hours (work gets all of the best hours 5 days/week, kids do the other 2 days)
The Uber driver has the choice of taking this job, or not. The Uber driver cannot decide to do the job in three hours time.
Union jobs raised wages for everyone: even though only a third of private-sector jobs were unionized, the threat of unionization pushed most employers to pay well.
In the 1960s, one person could get a blue-collar job and keep a family going in a suburban house, with a car. This was all due to unions.
We have been subjected to thirty years of propaganda about how unions kill jobs, how regulation is bad for jobs, how you should have "freedom to invest your money" (ie a 401-k rather than a company pension). This propaganda is now taken as gospel, and we don't realize it's just a ploy by those with inherited wealth to get a bigger share of the wealth.
BTW, that's how we ended up with Trump. Yes, he's a narcissistic windbag, but people who voted for him had real grievances.
Further, housing for GIs in the 40s and 50s was subsidized, thus changing the entire housing equation, and, further, women had not entered the workforce in large numbers, and, further, we require many more safety features on cars.
These factors all are major portions of the story when comparing against your prototypical factory worker story, and mean that a simple narrative of Unions => Better Life doesn't work. Although unions do need to become much stronger in American life, they won't unspool us back to the prior era.
and, tacking a paragraph on in my edit: probably want to talk to some black people about how great those years were. It's entirely plausible that some of the White American prosperity was due to heavily underpaying the Black Americans and treating them very poorly.
That said:
one factor is that computers started really becoming available to businesses, so you really had an automation boom.
one factor is the cold war ended, which changed... a lot of things, including capital flows. That capital shuffling may have helped prosperity.
one factor is the boomers hit their financially most productive years.
Vast land was easy to steal when 9/10 natives died from disease. The others lacked equivalent technology and weaponry.
Slavery ensured the newly established federal government made good on its debts. A good credit score means a SHITTON for the success of any state.
Abundant (stolen) land with loads of natural resources settled at the time industrialization ramped up. Lucky.
Literal boatloads of immigrants from all over the world prop up the population, increase production, and suppress wages. Great for industrial growth (like china recently).
And that's all before the 20th century.
Progress is determined by your viewpoint.
This is not to say there hasn't been wonderful progress in social justice. But from an economic justice perspective the modern economy is a disaster.
http://www.pewsocialtrends.org/2011/07/26/wealth-gaps-rise-t...
Even if this person happened to be female or non-white?
> it's just a ploy by those with inherited wealth to get a bigger share of the wealth.
By blocking access to good jobs to lowest tier - people without union connections, without union seniority, without ability to complete complicated licensing requirements, etc. - you are doing exactly this. You are making harder to gain footing on the job market for people that do not have a base to complete complicated licensing requirements, that can not deliver enough productivity to be hired at the above-market rates set by unions, who may not fit the job descriptions and requirements set by unions, etc. You benefit a narrow sliver of the population (1/3 at the highest times, much less now) at the expense of everybody else.
Simple economics is right. In _real_ economics, things are a lot more complex and unions don't "kill jobs".
Software salaries are higher in SF and lower in Jackson, Mississippi. Do you believe there are more programmers per capita in Mississippi?
So, if a unionized company in SF with higher salaries would be consistently hiring more people than essentially similar company with no unions and lower salaries, in the same environment - that might be a counter-example or at least a beginning of one (one still needs to consider the confounders - maybe CEO of the former one is a genius and of the second one is an idiot and had run the company into the ground, and that explains hiring differences).
Of course in SF and Jackson salaries are different - those are different markets. That has nothing to do with my argument.
> things are a lot more complex and unions don't "kill jobs".
Making a claim is not proving it. I've provided an argument why I think they do. If you want to argue against it, the least you could do is providing your own counter-argument. And no, "it's complicated" does not count as one. You have to point out which part of the complication, in your opinion at least, makes the conclusion wrong.
> Since workers for most gig economy companies are considered independent contractors, not employees, they do not qualify for basic protections like overtime pay and minimum wages. This helped Uber, which started in 2009, quickly grow to 700,000 active drivers in the United States, nearly three times the number of taxi drivers and chauffeurs in the country in 2014.
In other words, Uber could overtake taxi & chauffeur industry and provide jobs to 700K people because they weren't saddled with onerous regulations and union rules. That's not my words, that's NYT's words.
the US economy is currently spiraling away from that stability, as evidenced by our worsening gini coefficient over the past several decades.
Their growth may have been aided by current levels of unemployment and underemployment, but to say they wouldn't exist is an extraordinary claim that requires extraordinary evidence.
Even then I could see them growing as fast if there were a robust middle class with disposable income to spend on these services.
The only thing that would change is the supply and demand curves. There would be more demand and less supply, making the only thing that would change would be the equilibrium price point where those two intersect.
Thus, I do agree with you that that the only thing that would change is the supply and demand curves, but many of these business models seem to depend on the very idea of there being a large enough supply to enable prices to be lower than alternatives.
Perhaps the Lyft statement (Lyft left too) says it the clearest:
"The rules passed by City Council don't allow true ridesharing to operate. Instead, they make it harder for part-time drivers, the heart of Lyft's peer-to-peer model, to get on the road and harder for passengers to get a ride."
If you read more than just one article on the issue, you can see that it's much more nuanced than how you represented it. They left because they both have background checks in place and that adding fingerprinting adds an additional bureaucratic burden that has poor predictive power, places an undue burden on drivers who want to engage part-time and disproportionally prevents minority communities from participating. Background checks add nothing of value and if either company were to validate Austin's approach by acquiescing, they would pave the way for other cities to follow that model.
Opposing measure on principle because it adds costs and friction without adding value is not equivalent to the statement you made. Every business is right to oppose regulations that increase costs, especially those regulations of highly dubious value. Opposing such measures is not evidence of a business model not being valid.
You assume that Say's law applies to labor markets, but this idea has been overturned by empirical evidence
https://en.wikipedia.org/wiki/Involuntary_unemployment
Involuntary unemployment cannot be represented with a basic supply and demand model at a competitive equilibrium
The larger trend is where it looks worrisome, and that's basically what we're considering as some time has passed.
have to implies there's a wealth of "white-collar work or stable and well-paying blue-collar work" out there but people are forced or coerced to act against their best interests.
What's the alternative? Let's say the government decides to step in and make a structural change by changing the rules on W-2 employee vs 1099 contractor treatment. Will this lead to a resurrection of the American Middle Class?
They do already offer the ACA exchanges as well as subsidies for low-income wage earners under ACA. ACA also mandates a maximum annual out-of-pocket cost of $6,600 per individual (and $13,200 for entire family). While still a substantial amount, it's a far cry from millions of dollars of medical bills that people were saddled with pre-ACA.
Anecdotally, I've met a number of Uber/Lyft drivers that told me driving allowed them to quit their past shitty job and choose a flexible schedule that worked well with raising their kids.
Also, drivers that quit their jobs to pour energy into their family business with some extra cash from driving when needed.
The social problems of the low-income job lifer is not new.
My personal experience haven't been so - most "gig" services I've got were from people for which is was complementary income and which never intended to hold a full-time blue-collar job. Some of them could have 15-20 years of past blue collar experience only if they joined the ranks of workers straight out of kindergarten.
But my perspective is necessarily narrow and accidental - so I wonder, are there any data on it?
> perform low-level jobs, many of which require little or no specialized skills.
These jobs need to be performed. So who should be performing them?
> many gig workers find themselves too old to work but with no retirement savings, for example.
You are assuming these people would always hold these jobs until they retire. Why? Most people that drive for Uber or do gigs on taskrabbit or fiverr do not see it as a lifetime career, as far as I know. Just as a teenager getting min wage in McDonalds does not plan to do the same until she's 65. So asking "how can you retire on McDonalds salary?" doesn't make a lot of sense.
JIC you missed it: http://www.pewinternet.org/2016/11/17/gig-work-online-sellin...
http://www.pewinternet.org/2016/11/17/gig-work-online-sellin... shows that 18-29 year olds are most likely to be a part of the gig economy, as a percentage of an age range, and VERY few over 50 year olds participate (4%), so I'm not sure the data supports that specific view at all.
On the data, IMHO (and it is just an opinion) where there is data, it is going to be incomplete because as a new phenomenon, there is nothing to compare it to historically, and the current situation will not be indicative of future performance. As an example, the demographics of internet usage have changed dramatically from 1995 to today, as now the vast majority of people on the web are not white, but instead live in Asia (the top 10 here http://www.internetlivestats.com/internet-users-by-country/ includes only the US, UK and Germany, which are dwarfed by China and India).
BTW: that NY Times article is a great example of using data really selectively, if not downright misleadingly. Examples:
* "In New York City, an Uber drivers group affiliated with the machinists union said that more than one-fifth of its members earn less than $30,000 before expenses." OK, but is that BECAUSE of Uber, or the reason they drive for Uber? i.e. without Uber would they have more or less income? How many hours do they drive for Uber? Are they full or part time? And really, how is employing poor people anything but a positive thing? The mind boggles!
* I absolutely LOVE how having a large number of minorities was presented as a negative. "Company employs 47% blacks and minorities" would seem to mean it is a really progressive company, however the NYTimes article takes this as evidence of how bad a company it is. I can only assume that is because them there my-norities are too stupid to see how they are being ripped off by these evil corporations, unlike the oh so clevery smart Whitey White-White-McWhite-Whites. I could have the tone wrong there, but man, it comes off to me as really patronising to these minorities.
Last point and I'm done, from the Pew Data I love how it is a shock that people earning < $30K are more likely to take part in the gig economy than those making $75K. It is almost like people rationally choose to engage only when the marginal return from their time is best spent on the gig economy vs some other task ...
NYT loves doing stuff like this. It's the same paper that reported 39% of colleges having less overseas applicants, 35% - more and the rest roughly the same number as "Amid ‘Trump Effect’ Fear, 40% of Colleges See Dip in Foreign Applicants".[1] Looks like they just can't help themselves.
[1] http://marginalrevolution.com/marginalrevolution/2017/03/one...
It concerns me how eager we are to be to roll back the hard won protections that our forefathers fought for. Time and again we see that the vast majority of businesses only look towards maximizing the short term, and exploit any loopholes that allow them to.
It's more than just overtime and minimum wage.
Post 2008, the pendulum has been swinging the other way, but regulations were often argued as negative value. Of course people weren't assanine about it, and argued as best as they could on both sides.
http://www.goodreads.com/book/show/165415.Free_Agent_Nation
All the current crop of companies did is reduce the transaction costs low enough to democratize working for yourself just about anything can participate. Once anyone can participate, it's a natural outcome that earnings in these markets will deflate and stabilize around the price that the least skilled/educated are willing to work for.
The biggest irony is that without these companies, a lot of the people doing this kind of would probably be unemployed or underemployed. There was a LOT of latent demand that went unsatisfied.
Transportation network companies haven't just taken away some of the demand from existing options like taxies and livery companies, but have increased the size of the market by at least one other of magnitude in terms of rides and miles driven. AirBnB enabled people to capitalize on under-utilized real estate assets that they own or rent with a little administrative overhead as the only labor input.
The real failure isn't the gig economy, but government economic policy that drives some aspects of living costs higher while real income drops. The biggest culprit here are housing costs. Deflation in real income isn't a problem if there is a corresponding deflation in cost of living expenses as well.
I'm sure their parents weren't great forward thinkers either, it just so happened that the (blue collar job) dream they were sold worked for them until recently.
It's like saying if we see that CEO earns much more than janitors, then calling janitors "CEO" would make them millionaires. Pure magical thinking.
~~~~~~~~~~~~~
you praise airBnB for unlocking economic value yet demonize housing costs. the discordance here is that airBnB encourages rent-seeking behavior which will worsen housing costs, as that rental value gets priced into the cost of the home over time.
for economic stability's sake, we should favor labor over asset ownership in our economic policy.
Maybe "addictive" is more apt than you realize. Just spitballing, but maybe driving for Uber has the same reward mechanism that makes gambling addictive. Each big win, no matter how infrequently it might occur, keeps the gambler chasing the next one through loss after loss. Perhaps an Uber driver gets such a rush when he makes $60 for a short trip during peak demand that he can't help but endure long slow hours behind the wheel waiting for the next big score.
I really just can't understand the mentality of "These people are too stupid to realize they're being taken advantage of, let's write opinion pieces to enlighten these poor simple minded masses to the errors of their ways."
It just feels so condescending and elitist to me to take this viewpoint.
If it really is a bum deal, people will figure it out and quit. Uber will either go out of business or work harder to retain drivers. Or if customers get too upset at always having a new driver they'll seek other options.
There is another paradox here, that poor people use Uber+Lyft too. Most municipalities within the US do not have a functional, cheap public transportation systems.
Partially brought about by the oil companies buying up electric trolley systems and dismantling them. Partially brought on by the subsidized post-war housing boom, which fostered suburban expansion, making the last mile a difficult problem for public transit to conquer. And partially brought on by the rise of the automobile itself. The exuberance of the post-war US allowed a lot of people to be blinded to what was happening.
The good news is that you don't have to understand that mentality, because no-one has it. At no point does the article suggest that Uber drivers are stupid. It suggests that they have fewer options than other Americans, and are driven into these jobs by a lack of alternative. The article even mentions an effort by these drivers to unionize - hardly the actions of a bunch of stupid idiots. They know what they are doing, but their unionization effort was blocked by a federal judge.
> It just feels so condescending and elitist to me to take this viewpoint.
Frankly, to me, the condescending and elitist viewpoint is the one that assumes no-one really needs employee protections (while you enjoy them) and assumes that jobs are so plentiful that anyone doing a job they don't like is surely a fool who can't take control of their own life. Or that "the market" will fix all of this, when we now have decades of evidence showing "the market" failing to do so.
So Uber lost ~$3 billion in 2016, yet in 2017 they're supposed to start paying drivers more or providing more benefits? You know what happens to businesses that are losing money when they're required to start spending more money? They lose even more money. And the rate of loss has only been increasing for them, not decreasing.
If you want to impose more cost on them, it might help some drivers in the short run but in the long run it will kill jobs and likely kill the company, assuming the company doesn't already implode on its own.
We all need to remember no one is forcing anyone to be an uber driver. If we impose restrictions on a company that is already hemorrhaging money, it is absolutely going to kill jobs. If these people had a better alternative to uber they'd be doing it already, so when the uber jobs are gone they'll be forced to take even worse jobs.
If these folks really are being underpaid, another company can come in, pay them better, have better drive retention and satisfaction, and beat uber at their own game. Assuming that isn't happening, then drivers are in fact being paid the correct price, and any action to alter that price will lead to job options being reduced.
I think that is the ultimate elitist mindset, that these jobs are simply too wretched for anyone to do voluntarily. And for those poor souls that are being "forced" to do them, we should protect them from their terrible decisions by imposing extra costs. This makes people feel good by claiming to look out for those less fortunate, while ignoring the economic reality that it will reduce options and opportunities.
Right now, Uber customers have a very affordable ride. And Uber's drivers suffer from their "gig economy relationship" that does not offer the same benefits as a full time job. If Uber were forced to employ them properly, the price customers pay will go up. If the product is good enough, people will continue to pay, and Uber will be fine. If it becomes unaffordable for customers, then maybe it wasn't actually affordable at all in the first place, it was just that the unaffordability cost was placed on the drivers, not the customers.
We can also agree that these aren't exactly great jobs, and that they provide no benefits.
I don't think your first scenario is likely, where the added costs from driver benefits are passed onto consumers and the business remains successful, given it already isn't successful. I think we can also agree that if uber were to do this they would indeed lose even more money.
So then we're left with your second scenario being most likely, that we add the benefits but that it turns out this simply isn't affordable at all, at which point the company goes under and all these jobs are lost.
At this point, do the drivers somehow find better jobs that they had been passing up this whole time, now that they are relieved of the burden of being forced to work for uber?
I'd contend that the drivers are better off having the option, and that destroying these jobs won't magically create other better jobs that the drivers can then flock to.
What's "free market" and what isn't is subjective, but I don't think labor unions nec are. It's basically a cartel, but from the worker's side. If I had to describe a true free market for the gig economy, it'd be: every driver has full information about their wage, and can take it or leave it. Uber can set the wage at whatever they want, with the full understanding they won't have enough drivers if it's too low.
When you add in union or government mandated benefits I'd argue it's NOT a free market because there very well could be drivers willing to drive at some wage or rate who wouldn't be allowed to per the union or gov rules.
Union bargaining is collective bargaining. It is the antithesis of what you describe. It gets everyone on-board with the same deal, rather then everyone making individual deals.
> What's "free market" and what isn't is subjective, but I don't think labor unions nec are. It's basically a cartel, but from the worker's side.
I guess in my mind, cartels are free market. The government is interfering with the free market when they break up monopolies or cartels. Unions are the government's way of saying "we don't normally allow cartels or monopolies, but this is okay because it results in a net positive on society."
> When you add in union or government mandated benefits I'd argue it's NOT a free market because there very well could be drivers willing to drive at some wage or rate who wouldn't be allowed to per the union or gov rules.
What the union negotiates is just like whatever you negotiate with your boss. Maybe someone would do your job for less, but thats not how it worked out. Thats how markets work sometimes.
(
The beauty of capitalism is that no one is forced to do anything, but no one is entitled to anything either. Uber isn't conscripting it's drivers, they're free to seek out higher pay, better benefits, and the best deal they can somewhere else, or, if they can't, invest in their own human capital/move etc so that they can.
The real culprit here are conditions both systemic and on the individual level that led these individuals to have fewer options. Blaming the companies that are at least providing an option is misplaced and misguided.
I acknowledge most people will say this is callous and uncaring, and these people need our protections, but I think that argument ignores the economic reality that by imposing these laws they remove options for people.
It mostly boils down to the idea that we shouldn't ban voluntary actions in general. And doing so violates individuals basic rights to make decisions for themselves.
To be clear we should still have liability laws where an employer should be liable if their negligence causes injury etc.
Why are there expectations for a taxi dispatching service to be the savior of the middle class?
The gig economy may make "false promises" about how happy their workers are to get more, but I would consider that marketing.
People need to check their assumptions and expectations.
To me, we've been sold (though many of us don't believe) this notion that the economy is some kind of natural system that we simply have to accept. I'm not advocating communism necessarily but yes, the economy as designed and implemented may not create a stable middle class world for us to live in naturally, but does that have to mean there cannot be one? I think those who are accumulating the vast majority of the wealth would be happy to see it as natural selection but I think the system is much more artificial than that.
The economy has been tweaked and tuned to favor the wealthy even if it also naturally would do the same thing. Tweaking the system to maintain or increase the standard of living for the society is much easier than convincing said society that it should be done for some reason I have yet to figure out.
The flexibility has huge value that is difficult to quantify, especially for folks that are augmenting an existing job, a school commitment, retirement, family obligations, or some other constrained situation.
Consider the same at work in two different arrangements: one with a very rigid schedule that pays X dollars per hour, and the other with a completely flexible schedule that pays Y dollars per hour. What's the ratio of X to Y?
http://www.nber.org/papers/w23296
and found twice the supplier surplus compared to more inflexible working arrangements. They estimate that if drivers had to work at the same rates, but for inflexible hours, they'd reduce their hours worked by 2/3s.
Anecdotal evidence, but still. Not many job opportunities are available at weird hours and the ones that are (e.g. bartending, retail) usually require more rigid and unpredictable schedule than driving for a ride-sharing network.
https://www.amazon.com/Free-Agent-Nation-Working-Yourself/dp...
This all promotes a race to the bottom for least pay and lack of benefits IMO. Given that medical costs are a cynical for-profit business in the USA it's odd there is such enthusiasm in some quarters for these ideas.
I do know several people who fly around the word making money hand over fist speaking about the joys of this brave new era...presumably lots of people are showing up to hear the dream...
Hard to say if the others have fixed their economics (eg, Instacart) or are simply better at fundraising.
Here's a list from 2015 [1] showing some of these companies that are trying to switch to W-2.
Munchery Stiffs Early Backers and Cuts Staff in a Bid for Survival [2]
Luxe Valet shuts the door on two more markets [3]
[1] http://www.web-strategist.com/blog/2015/07/30/collaborative-...
[2] https://www.bloomberg.com/news/articles/2017-03-29/munchery-...
Or the write-off, when Uber decides that their vehicle no longer qualifies to be on the platfrom?
It's incredibly important to get law to properly regulate this space in a sane way that levels the playing field and guarantees worker protections.
Even today, I provide my own laptop, desktop, and work environment (I work remote). If you are particular and a specialist in the tools that you use then it makes sense to bring them with onto the job.
( http://articles.latimes.com/2000/dec/13/business/fi-64817 )
I bring my own laptop and my employer has a "work anywhere anytime" policy (as long as you get your job done). Does that mean I am no longer an employee??
As it's become easier to break unions, you'll find that these arrangements are usually only required for government projects and specific localities. When people tell stories about guys with no necks deploying rubber rats, that's usually in NYC or a similar place.
The upside to this model is you get generally well trained people with good benefits. The downside is that you get some additional baggage, which can be absurd in some situations.
I'm super ok with unionizing gig workers. I really hate the exploitation that's going on.
They are very clearly gearing up to push forward policies that benefit full-time drivers at the expense of part-time drivers. Proposed rules exclude new drivers from voting and exclude drivers from voting if they haven't completed enough trips in any three month period in the last 12 months. Rules like these will only advantage the full-time drivers at the expense of part-time drivers.
http://media.wix.com/ugd/af6c5f_9b35175f4fe741cabc9a17ad0161...
It's also the case that the proposed rules will limit any underhanded vote packing by certain companies.
"Most [drivers] said the money they earned from online platforms was essential or important to their families."
What do you think would happen to the average driver if the government or labor organizers came in and mandated that these workers receive overtime pay, minimum wage or other benefits? Would ride costs be the same? Would Uber be able to hire the same number of drivers? The space is competitive, it's not like Uber has a monopoly. They make 19 cents a ride on average and lost a bunch of money last year.
If anything, Uber should be celebrated for the fact it allows low skilled people without many other alternatives to be productive. Or would it be better if these people without many alternatives had... one less alternative?
Performing a job that meets some basic needs is strictly better than no basic needs being met because there is no job. We have welfare and other options to aid with unmet needs. Without these options, individuals who need welfare end up being a 100% burden on the system instead of a partial burden. Furthermore, those that remain unemployed for an extended period of time are increasingly likely to remain unemployed indefinitely. Having a job, even if it doesn't meet all needs, can at least serve as a more likely stepping stone to one that does.
With that said, these jobs are meeting basic needs.
They may not provide enough income to support a family, but they certainly do provide enough income to support an individual. And before anyone claims otherwise, realize that the economy has always had jobs that have only ever provided enough income to support individuals, not families. Such low-paying entry-level jobs are not a new phenomenon. We've always had them. We just have a lot more of them now. The problem isn't the existence of these jobs and the companies that offer them, it's the lack of other jobs that pay better.
There are hundreds of thousands of people doing this kind of work, and many have been doing this kind of work for several years. That's a clear sign that these jobs are meeting needs. There is a big difference between "Are you happy working for company X?" and "Would you be better off if company X did not exist?". Even people with jobs considered good jobs by most may be unhappy working that job. Even if they don't like the job, it doesn't mean that the arrangement isn't mutually beneficial.
These companies are not at fault for the current job market. Most people here are simply using them as a convenient scapegoat for other other problems.
And again, Uber has come up with a business model that allows people without many good alternatives (whether that's because they need flexibility, don't have as many skills, don't have connections etc) to be productive and make money. And that's a good thing.
The gig economy is feedback-based, meaning those who get a lot of good feedback can possibly generate a decent self-sustaining business from it, but the wages often still don't pay well relative to the amount of work involved, especially for Americans on Fiver who have to compete with workers from developing countries, and feedback means gig employees are 100% accountable for whether they succeeds or not.
This is good for the economy and the consumer because it means more efficiency, lower prices, and better service, but harder for the gig workers. For non-gig jobs, the entire company bears the costs of sub-100% productive employees, but gig workers bear full responsibility, thus any sloth directly impacts gig workers instead of being redistributed among an entire company (like Dilbert, where all the employees but Dilbert and Wally are kinda incompetent).
Competition amongst people though rapidly reduces the sinecure to no longer be sinecures. Taxi cabs may have had a monopoly, and people were willig to work for less to driver ubers (eg poor college students) but they did not have a sinecure. Many were struggling to make ends meet.
And they had been struggling for years. And so did not have the energy to pursue, say, learning Haskell.
Just as there are laws to prevent olympic atheletes from taking a super drug, breaking all records, and then dropping dead, what governs society should have rules to prevent people working themselves to death.
Unions were once the answer, but their major drawback is reducing competitiveness. In attempting to keep sinecures sinecures, you become less competitive. Meanwhile, the peasant rice farmer is saving every penny to buy his kids a better education and even beating them when they get too low of a math score.
An american who is used to runnning water, electricity, and all night raves who is struggling to pass his college algebra class has nothing on the poor farmers son who grew up in a mud hut and was forced into learning calculus in high school at belts end.
Who deserves the cushy job? The college student example may outwardly express a desire to have a fairer world, but also may resent the poorer peasant racing them to the bottom and the more educated peasants rapidly surpassing them in salary, (eg they get a tech job).
At different points in your social and economic development, different modules of the scam program are working to deceive you and emphasize unimportant details rather than big picture perspectives.
Instead of less desirable work options, they likely would have few if any work options.
(delivered by grubhub)
Actually many said it -- Uber for one.
Shocking! It almost leads one to the conclusion that the only route to a successful happy life is hard work and persistence, regardless of whether you do gigs or a 9-5.
Rather it leads to the conclusion that "forget 9-5, the new "gig" reality will be closer to indentured servitude, and forget "successful happy life" while you're at it too, it will just be a living, if you're lucky. Oh and those other 9-5/non-gig jobs? They're on the wane...".