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Comment by patrickaljord | Hacker News Reader

On the other hand, while worker protections had their use a century ago, they have increased cost of labour by a lot, making many low skilled workers unemployable (the very people they were supposed to protect). I've talked to many gig workers and they all told me that without these jobs, they would have nothing. Sure, we can start imposing strong "protections" on the gig economy, but these jobs would just disappear and those workers would be out of jobs again. No one plans a career on doing gigs their whole life, but for many it's a better source of revenue than just being unemployed and they feel less stuck in unemployment and more accomplished than they used to, which is better for moral and making them want to improve their skills/get back in the labour force.

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>they all told me that without these jobs, they would have nothing.

There are two things going on here that makes this more complicated that meets the eye. For one, as you have pointed out, lowering the price of labor increases the number of things people would be willing to hire someone to do, thereby increasing the number of jobs. However, it's also true that by removing the protections for one specific form of labor but not all, gig economy companies will have a competitive advantage over classical employment companies and put them out of business. So, the gig economy is reducing the number of "classical" jobs.

These effects point in opposite directions, and without being able to put numbers on them there's no way judge which wins out. Measured in terms of "money paid to low-skill workers," the reduction in everybody's wages might or might not be offset by the increased number of jobs, an increase which has been attenuated by the gig economy replacing some of the old economy.

For ridesharing apps, at least, it seems clear that the gig economy has grown the total market and hence the number of workers needed to serve this market. Before Uber entered New York there were ~500k cab trips per day: now, yellow cabs only serve 250k trips but 700k trips are performed by ridesharers [1]. The negative effect on employment is about 3x smaller than the positive one.

[1] https://toddwschneider.com/dashboards/nyc-taxi-ridehailing-u...

Please do not confuse ridesharing with ridehailing although the companies like Lyft und Uber invest a lot to blur the line.

> Before Uber entered New York there were ~500k cab trips per day

This is not a good argument as Uber & Lyft are not yet making profit and in general you cannot compare both numbers as ridehailing grabs trips from public transit:

https://sf.curbed.com/2018/7/27/17622178/uber-lyft-cause-tra...

https://www.businessinsider.de/uber-lyft-having-devastating-...

Not to talk about the negative effects of their growth: http://www.schallerconsult.com/rideservices/automobility.htm

Those 700k trips are operating at a loss, so the numbers are not representative of the effect of gig economy.

There's another way to see this, worker protections were invented to put low skilled people out of work (historically, people of color).

https://www.forbes.com/sites/carriesheffield/2014/04/29/on-t...

Countries other than the US have minimum wage laws. Or do you want to imply we have to choose between worker protections and diversity?

Read the article, it's not just the US, South Africa too. And I know it was the same in France and many European countries to prevent low skilled immigrants from getting jobs. My point is, worker protections almost by definition prevent low skilled workers from getting jobs because they impose additional costs that low skilled workers are the first to pay by losing job opportunities. In the economy, any additional cost has to be paid by someone eventually, guess who that usually is.

So let the free market sort it out in a race to the bottom?

Should workers be able to unionize to demand better from their employers?

Only 4% of people are paid minimum wage, everyone else is paid above http://poverty.ucdavis.edu/faq/what-are-characteristics-mini... so even if there really was a "race to the bottom" it would only affect those 4% and then most people would refuse to work for a salary that is so ridiculously low that staying at home would be more beneficial.

The free market is the best (or less worse) system at giving people a wage as high as possible compared to socialism. Now, we're talking very low skilled people who can't seem to get a job anywhere, in this case, increasing barrier to entry only makes things worse. Given that most jobs require skills, most jobs are paid above minimum wage thanks to free market competition so no race to the bottom would happen in most case and even then the market would fix a limit (ie no one would accept your offer if it's too low, same reason no one in SV would accept an offer below $100k ;).

> Should workers be able to unionize to demand better from their employers?

Absolutely, there can't be a free market without freedom of association.

Unionization is well beyond freedom of association. It's freedom to enforce a monopoly. Can you be consistent, having no objections if others do that too? For example:

Airlines form their own sort of union. (we might call it a cartel) They decide to agree on prices instead of competing. Prices double.

Fueling stations do likewise. They agree that gasoline should be $12 per gallon.

Cell phone providers decide that you should pay $1 per megabyte. They all agree, being in their union, that they won't work for less.

Good?

There are only a few companies in each of the industries you mentioned while there are millions of workers. There is already huge asymmetry in power and organization. You completely gloss over that fact.

In your argument to reduce worker protections you seem to ignore the contradictory stance of increased unionization with lower worker protections.

Unions by definition will increase the number of protections for workers and increase the costs of labor.

Personally I take an opposite stance: the problem with the free market is that it has to optimize for infinite growth. It doesn't matter if you make profit, you have to make the most profit or you're a failure. Which means removing insurance for workers, minimizing wages, maximizing unpaid overtime etc. The free market is fundamentally at odds with workers and that's why companies employ lobbying and union busting behavior.

> the problem with the free market is that it has to optimize for infinite growth. It doesn't matter if you make profit, you have to make the most profit or you're a failure. Which means removing insurance for workers, minimizing wages, maximizing unpaid overtime etc. The free market is fundamentally at odds with workers and that's why companies employ lobbying and union busting behavior.

Have you ever ran a company? Most people running a business care about all these things you're enumerating and no one believe in infinite growth.

Unregulated capitalism will externalize all of its costs onto society. Too much regulation will strangle the system. Like with most things, there needs to be a balance. Similarly, capital will exploit labor without regulations or unions to prevent it from doing so.

Now yes, of course capital is going to seek the locality with the cheapest costs of production, so there is a tension between competitiveness and ensuring a minimum standard of living. Cities, states, countries, ultimately have to work together to balance these demands.

If your solution to all of this is a laissez faire system that relies on the fact that "most people care"... it is I that has to question your naïveté.

> Unions by definition will increase the number of protections for workers and increase the costs of labor.

This is only true insofar as the market is inefficient.

Suppose you have a free market for car services (i.e. no taxi regulations or similar) and the drivers all get together and unionize. They demand higher wages and get them. The only way the company can pay higher wages is to raise prices, so they do, demand for car service is reduced, and some of those people lose their jobs.

Since they're no longer employed, the people laid off quit the union. Car Service Number Two shows up, has no contract with the first car service's union, pays the original lower wage to the people put out of work, and attracts customers by charging lower prices. That causes Car Service Number One to lose business and have to lay off more drivers who then go to work for Car Service Number Two, and so on until everyone is working for Car Service Number Two. If they then unionize again, Car Service Number Three appears to hire the workers laid off due to the higher wage ad infinitum.

Which is why unions don't work in competitive markets.

> the problem with the free market is that it has to optimize for infinite growth.

There is nothing that requires this. What it needs to optimize for is efficiency. If you're paying $50 then you have to charge >$50 and you lose business to the competitor who pays <$50 and then charges <$50. But at scale this isn't a problem -- when everything you buy costs less, it isn't a problem that you get paid less.

The problem now is regulatory costs and cost disease preventing the lower prices from actually happening in many cases. But you can't fix high regulatory compliance costs by increasing regulatory compliance costs.

"This is only true insofar as the market is inefficient."

I think you are right. Unions are by definition all about a (a kind of external) negotiating power. Such things have no place in ideal and fully efficient free markets where the prices are dictated solely by the demand and the supply.

Either such a market would be robust enough (as in your example) and the union would not be in a longer term viable, or the union would be viable (e.g. some kind of monopoly) thus turning the market into a non-ideal, non-efficient and non-free.

However I am yet to see (or realize that I see) a labor market that would be in any meaningful way close to being efficient and free. The labor markets I see have low liquidity (it is difficult to search and change the work, it takes time to adjust your skills), huge information asymmetry and low transparency, and the most actors are not very "free" (debt, no alternative options...).

No offense, but this is an incredibly reductive take on unionization and ignores the history of unions in competitive markets in the US.

People who are laid off don't just quit the union; unions often offer additional support for members who are laid off including aid for job seekers. A great example of how unions exist in a competitive market is SAG-AFTRA which by your own argument simply shouldn't exist. If you're going to make an argument against unionization, you shouldn't take one that can be empirically disproven.

> People who are laid off don't just quit the union; unions often offer additional support for members who are laid off including aid for job seekers.

What kind of job seeking assistance are you imagining in a car service union? The services themselves already tell you when work is available automatically and the problem is that there are more workers than there are jobs at the higher wage.

Moreover, if you're going to offer things like that then you have to gatekeep union membership and then your problem isn't that people quit the union, it's that they can't even get into it if they wanted to, and would then happily take any non-union work they can get.

> A great example of how unions exist in a competitive market is SAG-AFTRA which by your own argument simply shouldn't exist.

It shouldn't exist if Hollywood is a competitive market. But it isn't. There are a handful of major studios that make substantially all of the major motion pictures and control the major channels of distribution and promotion.

Before the internet it was effectively impossible to strike out on your own as a high grossing studio. It's still extremely difficult using traditional channels. What we're seeing now is individuals doing it using platforms like YouTube -- but they're hardly making anything like what Hollywood does and the various YouTube celebrities are generally not SAG members either.

There is a difference between creating laws that deliberately exclude a large portion of a country's citizens (America and South Africa) and laws that as a side-effect make it difficult for immigrants to get jobs (Europe). The citizens of a country should not be subject to exploitative labor practices simply in order to make life easier for low-skilled non-citizens who choose to immigrate.

It's possible for different countries to adopt the same policy for different reasons. Many countries get around diversity issues by not having diversity.

>So, the gig economy is reducing the number of "classical" jobs.

Sure, but the gig economy started from displacing jobs that were caught in regulatory capture. Most of the people that the earlier post talked about wouldn't be able to get a job as a taxi driver due to regulations. I think that, so far, the gig economy isn't pushing heavily into areas that aren't suffering from regulatory capture.

while worker protections had their use a century ago, they have increased cost of labour by a lot, making many low skilled workers unemployable

Outsourcing with maybe a dash of mass immigration made them unemployable, not workers protections.

Let's not pretend like this is some accidental outcome of well-meaning measures. This is the desired result of deliberately implemented policies.

Let's not forget automation. A lot of low-skilled jobs from a century ago simply don't exist anymore or have shrunk massively.

Would they be out of work otherwise? I saw no lack of deliveries or taxis ten or twenty years ago.

Delivery drivers have been moved from secure employment to the gig economy and enforced self-employment. Uber drivers would previously have been taxi or private hire drivers.

The problem comes when, after a few months, many realise that the gig role they took simply doesn't pay. Or pays significantly less than minimum wage without rights and benefits that everyone else in the economy takes for granted.

For the most part it's simply a way of larger companies outsourcing part of their labour costs to the state (via top-up benefits).

There are orders of magnitude more uber drivers now than there were taxi drivers ten or twenty years ago. The point isn’t that these jobs didn’t exist or were replaced 1:1, the point is that there is a super steep demand curve in these services so a drop in price by 10% means 10x demand at that reduced price, which means the number of drivers now is much much more tha. It used to be to satisfy those orders

> The point isn’t that these jobs didn’t exist or were replaced 1:1, the point is that there is a super steep demand curve in these services so a drop in price by 10% means 10x demand at that reduced price, which means the number of drivers now is much much more tha. It used to be to satisfy those orders

Let me go out on a limb and say: who gives a shit that there’s now more demand? This is not a good thing, demand for Uber is often replacing demand for public transit and bringing with it additional congestion[1], pollution, and waste in the classical “broken window” style. This is economic growth for the sake of itself - not towards any kind long term prosperity for the human race.

[1] https://digitalcommons.hope.edu/curcp_16/147/

Make transit as attractive as you think it "should" be and these people wouldn't be choosing uber instead.

If the current way we structure our economy and society is failing large swaths of people, gigs might be a good stop gap, but how many people can be gigified before the whole thing breaks? What is the acceptable percent of people for whom it is ok that they will never have healthcare?

What if gigs aren't a stop-gap, but the way our economy and society is failing people?

This has been going on for decades---I can remember complaints about UPS, etc., delivery employees being replaced by contractors, and I've worked for places with the infamous 19.5hr/wk schedule.

Not sure how this is related to healthcare. I'm from France where everybody has healthcare and the gig economy is still huge. In the US you could either go single payer like France or full private/free market but obligatory like in Switzerland or the Netherlands. Either way, this is not related to the gig economy. The US has a problem where an oligopoly of insurances are trying to keep a bad status quo.

Sorry if I was unclear. My point is that gig workers in the US and other people of transient employment status do not generally consider themselves to have access to healthcare, even though they technically do through the accumulation of unpayable debt.

The average Uber driver makes about $35,000 per year: https://www.thestreet.com/personal-finance/education/how-muc....

That’s about 300% of the federal poverty line. Under the ACA, they can purchase health insurance on the exchanges for a premium that is capped at 8-10% of their income.[1] In Germany, a self-employed person would pay 15% for mandatory state health insurance premiums. (People who work for a company pay half of that, with their employer paying the other half.)

Here in Maryland, a quick search of the ACA exchange shows a Silver Kaiser Permanente plan for $266 per month (subsidized) for a 35-year old single person making $35,000.

Mean, median, and mode...

"Pay Per Month: A median of $155 per month and an average of $364"

Then, there's that "pay" isn't "pay". These are gross numbers rather than net.

"The actual expenses of driving, like maintenance and gas, consume about $4.87 per hour of a driver's income."

2/3 of Uber drivers only do it part time, so the median isn’t a useful data point if you’re talking about health insurance. The $36,00 figure is for full time. Regardless, if someone makes less than that driving Uber, their ACA premiums are correspondingly lower. And if they make really little, they are eligible for Medicaid in many states.

In germany consistently working for a company like Uber as part of "gig" would likely fall under "fake self-employed", so Uber would have to offer you an employment contract and you'd pay half of the 15%, so about 8%, which falls on the lower end of your premium caps. You'd also gain accident insurance and other privileges or protections.

No way they do ... "indeed.com" has no backing of those numbers.

It’s just an absurd situation that health care is tied to employment in the first place. If you get sick and can’t work, you just become a burden on society that’s not accounted for anywhere — but society still has to pay for anyway.

And we wonder why our healthcare costs are so high...

We aren't failing people: unemployment hasn't been this low in 20 years.

We have spent 28 trillion dollars on welfare, yet the poverty rate is unchanged over decades. The only thing that supports people is work, and we need to eliminate as many impediments to it as possible: over-regulation, payroll taxes, income taxes. Make huge cuts to welfare with the savings and streamline healthcare to provide cheap, basic services to every citizen (in line with disallowing citizenship by birth).

Then, regulate the supply of labour by barring immigration from poor countries (establish a liberal visa regime with countries in the HDI top 30 though, to allow legitimate talent to come to America). You have the recipe for a reasonable, modern life for any American willing to work. It could be a blueprint for the whole Western world.

> unemployment hasn't been this low in 20 years.

This is not really accurate. Unemployment is at a 40 year high. (where "unemployment" means "percent of working-aged people without a job")

https://www.theatlas.com/charts/B1SUWjSx7 (that big drop is people losing their jobs). The last time the numbers were this bad was back around 1979.

One can read a lot into that chart, depending on one's own bias.

For example, if jobs get better, then families can live on one income. This is good. We're still way above the workforce participation of the 1950s, which generally was a better time for family life in the USA.

   which generally was a better time for family life in the USA.

I suspect a good chunk of the population would dispute that statement. In general I think there is a lot of rose colored glasses about that period of time.

Regardless - I haven't seen any evidence that we are returning to a general viability of supporting a family on one income, at least supporting it well. Do you know of any?

If you were serious about providing a reasonable, modern life for Americans wouldn't you provide high quality free healthcare as a basic right? Wouldn't you provide free education and eliminate student debt? Wouldn't you ensure a dignified retirement and old age for all?

Your manifesto doesn't include these things, why not?

> streamline healthcare to provide cheap, basic services to every citizen

Already covered that.

We can pay for healthcare for all citizens, but it will mean excluding very expensive things like heart surgery, cancer treatment, joint replacements. We will probably need to be much more forward on euthanasia for the old, to save resources.

We can provide free higher education, but its going to mean no student housing, no athletics programs and restricting college to the top 20% of the cohort academically.

Why should we have to tax the current worker population in order to pay for old people to do nothing? The current retirement system is a flawed ponzi scheme. People have continued to work until death or impairment in the past - why should retirement be considered a human right now?

Cut payroll taxes and income taxes, and the elderly can happily work 1-2 days per week, and businesses will be happy to have them. Store clerks, fast food workers, cleaners, child carers. These jobs can be done well by the elderly, and work keeps the brain active and healthy.

What if I want to work part-time throughout my life, and never retire? Shouldn't I have the ability as an individual to decide how and if I want to retire?

What is it like to live in a country where things that every other developed country seems to be able to afford (like public health care) are impossible without invoking “euthanasia for the old”?

> they have increased cost of labour by a lot,

Though not in real costs

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