NEW YORK, NY – MAY 8: A small group of independent drivers and supporters protest against Uber and … [+]
A century ago, worker protests were common: coal miners, railway men, and garment factory seamstresses fought for standardized hours, fair pay and better working conditions. The rise of labor unions and a decent social safety net lulled us into believing their issues were a thing of the past.
However, the 50-year detente in the mid-20th century between workers and business was actually an abnormality. Recent protests by Uber drivers, hotel workers and DoorDash couriers have been a clear reminder that the debate about who should enjoy the benefits of economic growth – workers, employers, customers or all three – is still very much with us.
I would argue that much like their early 1900s counterparts, workers today find themselves with greater economic and social instability – this time due to an economy shifting away from full-time employment to so-called gig employment.
Gig workers—contractors who rely on technology platforms for one-off tasks, such as driving, food delivery and odd jobs—are on the unfortunate downside of this shift. Here are the biggest ways:
The illusion of freedom
The main incentive used to lure workers to shared economy platforms is supposed freedom — workers are free to do whatever they want, whenever they want. Be your own boss! Make your own hours! No more commuting! No annoying coworkers!
But for most gig workers, the “freedom” they are offered is really anything BUT freedom. You aren’t free if you have to be on-call all day in case a potential gig pops up. And because there is no guarantee of work, individuals often take on a task because there is a financial imperative to do so.
A certain level of predictability allows 9-5 employees to plan their work days and weeks around childcare, appointments and social activities. Being constantly at the ready does not create the basic level of stability gig workers need to be healthy and productive.
Brutally low wages
For many, gig work is low-paying work. Only a handful of people have been able to make a massive paycheck from gig work. A report from the U.S. Federal Reserve last year found that nearly 60 percent of workers who earned their primary source of income from gig work would not have the funds to cover a $400 emergency. That’s almost 25 percentage points higher than those who earn their income from a traditional job.
Just as problematic, the work is often not continuous, further depressing wages. Financial hardship is exacerbated since these jobs are often per task and not based on time.
In some cases, gig workers also have to pay twice as much in payroll deductions as part-timers, since their employer isn’t covering the other half. That means gig workers essentially have a 7.65 percent gig tax placed on them in the United States. Add to that no retirement savings contribution, no parental leave, no worker compensation protections … and you end up with a brutally low paycheck.
Unaffordable or no health care
A gig worker is on their own in every aspect. The biggest hurdle in the United States is finding affordable and high-quality healthcare on the open market, which remains a struggle despite Affordable Care Act reforms. Many plans have high premiums with even higher deductibles, rendering the insurance feeling useless when it is needed the most.
Deskilling of work
As more high-paying jobs in the 21st century require specialized skills, gig work exploits workers with little expertise. Cab drivers in London used to have to know its spaghetti-like streets forward and backward and prove their knowledge by taking a rigorous exam. Now, there’s an app for that – but one with a much less knowledgeable driver at the wheel.
How technology can start to solve these issues
To date, large platforms like Foodora, InstaCart and Lyft have used technology to further entrench their positions and hold gig workers captive. They’ve created apps that cement themselves as the main beneficiaries of economic growth, typically at the worker’s expense.
But new technologies are emerging that can put workers back in control – solutions where power and data are not centralized. More companies and people are exploring the potential of blockchain technology to create apps and services that are truly open and not subservient to the economic interests of platform companies. If technology was an accomplice in creating the problem, perhaps it can now solve it too.
There are several real-world use cases where this is already happening: the UN is using blockchain to help Mongolian goat farmers; it’s being used for land registry in India; and we’ve partnered with Velocia to deploy a blockchain-based solution that incentivizes taking public over private transit. It’s not such a stretch to imagine this technology being used to solve problems like the ones I’ve outlined above.
A report from MetLife Inc states that “almost 30 million Americans get their primary income from gig work, constituting nearly a fifth of the total workforce.” This number isn’t likely to decrease any time soon. The economy can and will keep growing, but large trends will force us to find a better answer to the question of how that growth should be split. If we don’t, we are in for a turbulent decade.
