Opinion, Berkeley Blogs

The share-the-scraps economy

By Robert Reich

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 thats 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 were now barreling toward.

Theyre Uber drivers, Instacart shoppers, andAirbnb hosts. They include Taskrabbit jobbers, Upcounsels on-demand attorneys, and Healthtaps on-line doctors.

TheyreMechanical 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 theyre 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 Amazons Mechanical Turk. Amazon calls it a marketplace for work that requires human intelligence.

In reality, its an Internet job board offering minimal pay for mindlessly-boring bite-sized chores. Computers cant 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 19thcentury 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 its not the employer so its not responsible.

Amazons Mechanical Turks work for pennies, literally. Minimum wage? Time-and-a half for overtime? Amazon says it just connects buyers and sellers so its 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, Arun Sundararajan, a professor at New York Universitys business school, told the New York Times.

But this argument confuses downtime with the time people normally reserve for the rest of their lives.

There are still only 24hours 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? Ones own health?

Other proponents of on-demand work point to studies, such as one recently commissioned by Uber, showing Ubers 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 doesnt 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 arent 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 dont want.

Some economists laud on-demand work as a means of utilizing people more efficiently.

But the biggest economic challenge we face isnt using people more efficiently. Its allocating work and the gains from work more decently.

On this measure, the share-the-scraps economy is hurtling us backwards.

Cross-posted from Robert Reichs blog.