On February 3, 2015, Robert Reich writes on AlterNet:
How would you like to live in an economy where robots do everything that can be predictably programmed in advance, and almost all profits go to the robots’ owners?
Meanwhile, human beings do the work that’s unpredictable – odd jobs, on-call projects, fetching and fixing, driving and delivering, tiny tasks needed at any and all hours – and patch together barely enough to live on.
Brace yourself. This is the economy we’re now barreling toward.
They’re Uber drivers, Instacart shoppers, and Airbnb hosts. They include Taskrabbit jobbers, Upcounsel‘s on-demand attorneys, and Healthtap‘s on-line doctors.
They’re Mechanical Turks.
The euphemism is the “share” economy. A more accurate term would be the “share-the-scraps” economy.
New software technologies are allowing almost any job to be divided up into discrete tasks that can be parceled out to workers when they’re needed, with pay determined by demand for that particular job at that particular moment.
Customers and workers are matched online. Workers are rated on quality and reliability.
The big money goes to the corporations that own the software. The scraps go to the on-demand workers.
Consider Amazon’s “Mechanical Turk.” Amazon calls it “a marketplace for work that requires human intelligence.”
In reality, it’s an Internet job board offering minimal pay for mindlessly-boring bite-sized chores. Computers can’t do them because they require some minimal judgment, so human beings do them for peanuts — say, writing a product description, for $3; or choosing the best of several photographs, for 30 cents; or deciphering handwriting, for 50 cents.
Amazon takes a healthy cut of every transaction.
This is the logical culmination of a process that began thirty years ago when corporations began turning over full-time jobs to temporary workers, independent contractors, free-lancers, and consultants.
It was a way to shift risks and uncertainties onto the workers – work that might entail more hours than planned for, or was more stressful than expected.
And a way to circumvent labor laws that set minimal standards for wages, hours, and working conditions. And that enabled employees to join together to bargain for better pay and benefits.
The new on-demand work shifts risks entirely onto workers, and eliminates minimal standards completely.
In effect, on-demand work is a reversion to the piece work of the nineteenth century – when workers had no power and no legal rights, took all the risks, and worked all hours for almost nothing.
Uber drivers use their own cars, take out their own insurance, work as many hours as they want or can – and pay Uber a fat percent. Worker safety? Social Security? Uber says it’s not the employer so it’s not responsible.
Amazon’s Mechanical Turks work for pennies, literally. Minimum wage? Time-and-a half for overtime? Amazon says it just connects buyers and sellers so it’s not responsible.
Defenders of on-demand work emphasize its flexibility. Workers can put in whatever time they want, work around their schedules, fill in the downtime in their calendars.
“People are monetizing their own downtime,” says Arun Sundararajan, a professor at New York University’s business school.
But this argument confuses “downtime” with the time people normally reserve for the rest of their lives.
There are still only twenty-four hours in a day. When “downtime” is turned into work time, and that work time is unpredictable and low-paid, what happens to personal relationships? Family? One’s own health?
Other proponents of on-demand work point to studies, such as one recently commissioned by Uber, showing Uber’s on-demand workers to be “happy.”
But how many of them would be happier with a good-paying job offering regular hours?
An opportunity to make some extra bucks can seem mighty attractive in an economy whose median wage has been stagnant for thirty years and almost all of whose economic gains have been going to the top.
That doesn’t make the opportunity a great deal. It only shows how bad a deal most working people have otherwise been getting.
Defenders also point out that as on-demand work continues to grow, on-demand workers are joining together in guild-like groups to buy insurance and other benefits.
But, notably, they aren’t using their bargaining power to get a larger share of the income they pull in, or steadier hours. That would be a union – something that Uber, Amazon, and other on-demand companies don’t want.
Some economists laud on-demand work as a means of utilizing people moreefficiently.
But the biggest economic challenge we face isn’t using people more efficiently. It’s allocating work and the gains from work more decently.
On this measure, the share-the-scraps economy is hurtling us backwards.
http://www.alternet.org/robert-reich-why-work-turning-nightmare
Once again Robert Reich falls to connect the dots. Yes, tectonic shifts in the technologies of production is and will continue to destroy jobs and devalue the worth of labor resulting in a “share-the-scraps” economy.
The solution is not a focus on “share-the-scraps” job creation but to empower EVERY citizen to acquire personal ownership shares in wealth-creating, income-producing capital assets, which now are the privy of the wealthy ownership class.
We cannot blame businesses. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum in order to maximize profits for the owners. They strive to minimize marginal cost, the cost of producing an additional unit of a good, product or service once a business has its fixed costs in place in order to stay competitive with other companies racing to stay competitive through technological innovation. Reducing marginal costs enables businesses to increase profits, offer goods, products and services at a lower price, or both. Increasingly, new technologies are enabling companies to achieve near-zero cost growth without having to hire people. Thus, private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role.
Over the past century there has been an ever-accelerating shift to productive capital––which reflects tectonic shifts in the technologies of production. The mixture of labor worker input and capital worker input has been rapidly changing at an exponential rate of increase for over 235 years in step with the Industrial Revolution (starting in 1776) and had even been changing long before that with man’s discovery of the first tools, but at a much slower rate. Up until the close of the nineteenth century, the United States remained a working democracy, with the production of products and services dependent on labor worker input. When the American Industrial Revolution began and subsequent technological advance amplified the productive power of non-human capital, plutocratic finance channeled its ownership into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels.
People invent tools to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive––the core function of technological invention. Most changes in the productive capacity of the world since the beginning of the Industrial Revolution can be attributed to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital does not “enhance” labor productivity (labor’s ability to produce economic goods). In fact, the opposite is true. It makes many forms of labor unnecessary. Yet Reich and others want labor to be artificially elevated by government through minimum wage legislation, overtime laws, and collective bargaining legislation or by government employment and government subsidization of private employment solely to increase consumer income.
The reality is that productive capital is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all. Think about it, if both labor and capital are independent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is the ONLY productive input, and ignore the necessity to broaden personal ownership of wealth-creating, income-producing capital assets simultaneously with the growth of the American economy.
