It’s Not the Gig Economy, Stupid

Yves here. Even though this article is written from a UK perspective, the issues apply to the US as well. Reaganism and Thatcherism ran on parallel tracks.

By Daniel Tomlinson. Originally published at Open Democracy

Sometimes change comes suddenly and without warning, in big bold type on the front pages. But, often, the changes that really matter never make it to the headlines. Take the large falls in global poverty over the past few decades, or the slow ageing of the UK population – I’d hazard a guess that neither of these trends has ever topped the 10 o’clock news.

One place where this story – of exciting changes overshadowing long-run trends – is true today is in the current debates around the state of the UK’s labour market. ‘New’ forms of work are the star of the show, with column inches and reports being churned out by the week on the rise of the gig economy. But, stepping back, although it may have sparked a lot of debate, it’s clear that this type of work is still a very small proportion of the total, and it is not fundamentally reshaping work in the UK.

Instead, there are bigger evolutions that have taken place in our labour market which are of relevance to many more people. One such change is the slow decline in union membership rates over the past 40 years. Trade union membership has fallen by almost half since the late 1970s while the number of people in work has risen by a quarter. There are five million fewer trade union members today than there were in 1979; in 2015 just 22% of those in employment were signed-up.

Membership is also increasingly concentrated among older workers in mid-to-high paying jobs in the public sector. Less than 1 in 10 of those in the lowest paid roles in the private sector is a trade union member. Unions are at their weakest where they are needed most.

The Decline of Trade Unions

Why has this happened? Well, the reasons are many and complex. Large scale industrial change has played a significant part; the decline of jobs in the union-heavy manufacturing sector and the rise of service sector employment has been crucial. There are other relevant factors too, including the rise of smaller employers, increasingly fissured workplaces (due to contracting out and sub-contracting), aggressively anti-union legislation, and deep cuts to spending on public services.

Changes in social attitudes also matter: according to research from Ipsos MORI, the millennials – those born between 1980 and 2000 – are far less supportive of collective welfare institutions than previous generations. It may well be that this perspective has rubbed off on their views of unions; those in younger generations have shown themselves to be less likely to join trade unions than those in generations that have gone before.

Whatever the cause of the decline in union strength, we shouldn’t think that it doesn’t matter just because it’s not front page news. That UK unemployment is at a near 40-year low, and yet real wages are set to start falling again in the coming months, is something that surely must be linked to the weakness of organised labour in the UK. As must the fact that pay growth has been so weak for so long in the UK. This weakness is tied to our unenviably poor productivity performance since 2008, but the link between pay and productivity isn’t just a one way street. Low productivity growth leads to low wage growth – but if other trends (such as weaker unions) are keeping a lid on wage rises then this will impact productivity too.

We are on course for the worst decade for wage growth in the last 210 years, yet the pay squeeze hasn’t led to big questions about how declining union power has influenced our labour market. Thankfully, though, something else has: the gig economy. It may be still be in its infancy, but it has provided a prism through which new debates about the quality of work in the UK – and the power that workers have to improve it – are taking place.

Questions like ‘is flexible work possible without insecurity?’, ‘what routes are there for workers to organise for better pay or conditions?’, and ‘how is technology used by management to control workers?’ aren’t new – but they have taken on a new relevance of late.

Policy makers will hopefully begin to provide new answers to these questions later this year after the independent review of employment practices in the modern economy (the Taylor Review) has reported its findings. But, direct policy change on its own won’t be enough. Unions, tech innovators, and others with an interest in finding ways to secure a better deal for workers can take action too.

Technology: Part Problem, Part Solution

One area that we have been focusing on at the Resolution Trust is the use of technology in work. The trend is towards businesses deploying technology to reduce their workforce obligations, increase control, or transfer risk. But it doesn’t have to be like this. If technology can be used to pull workers apart, surely it can also be used to bring them back together again?

By no means are we arguing that innovative use of technology is going to be the solution to all the union movement’s problems. But we do think that this is an area on which progress can be made today. In other areas, for example the impact of anti-trade union legislation on the ability of unions to organise, the prospects for change in the near future are limited.

In contrast, there already are promising signs – which we have outlined in more detail in a recent publication – that technology can be used in a pro-labour fashion. One example of this is, a labour advocacy and petitioning website that enables and supports campaigns on any workplace-related issue. In the past year alone the site has been an important part of a number of victories for US workers, from increased provision of paid parental leave at Netflix to relaxations of the dress code policy at a US fast food chain. It’s built up a significant reach too – 1 in 10 of all Starbucks employees have registered with the website – and it is now finding new ways to build campaign teams and connect workers with unions.

But in the UK today there is still distinct lack of a place for these sorts of ideas to get off the ground. Innovative pro-labour ideas often struggle to get heard, never mind to get funded or adopted. The links between groups thinking about how tech is transforming work, those interested in advocating for workers, and sources of social investment for new civic organisations are few and far between. All of which means there is no recognised home of incubation, no shared space to develop pro-labour ideas and few sources of funding. For a country that is generally rich in social innovation the lack of any infrastructure aimed at encouraging new ways of improving working life is striking and needs to be rectified.

At the Resolution Trust we are starting to play our part in turning this around. We have recently launched the WorkerTech programme in partnership with Bethnal Green Ventures. The programme seeks to find and back start-ups with great ideas about how technology can be used for good in the world of work. We’ve backed one start-up in our first cohort, a platform to facilitate campaigns for improved parental leave policies, and applications for the second cohort will open within the next month.

This programme isn’t going to change the world by itself, but it’s a start and we hope that more initiatives in the same space will follow. And that workers, trade unionists, tech innovators and policy makers alike will start to take more seriously the challenge of how workers throughout the economy can be supported in the twenty-first century. Efforts to reverse declines in worker power might never make the headlines, but they matters a great deal.

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  1. Disturbed Voter

    Technology is morally neutral. People are not. If you want “good” to happen, you have to start with “good” people … aka “not corrupt”. Centers of innovation can become centers of opportunistic rentier behavior. The problem doesn’t source “in our stars” but “in ourselves”. Money is also a technology, and it is also morally neutral.

    1. c_heale

      Technology is about power. Like science as argued by ‘Yuval Harari’ in his book ‘Sapiens’. The powerful have access to the latest technology and the powerless don’t, and the powerful will use technology to maintain or enhance their position in society, consciously or unconsciously.

      1. casino implosion

        I watched an Alex Jones documentary about 10 years ago that ended with his ominous voiceover saying “the elites will upload their consciousness to immortal machines and set off to explore the cosmos”. People make fun of the infowars host, but I always felt that this one line pretty much encompassed everything about the future of politics, in a poetic if not strictly non-science-fictional way.

        1. Disturbed Voter

          Elitism always leads down the same hole .. corporate or government leaders inevitably try to make their horse, Consul of Rome.

        2. different clue

          It won’t be the elite themselves doing this. It will be their well paid consciousness-uploading technicians who will actually be doing the uploading.

          What if some of those technicians ( and designers/programmers) were secretly bitter and secretly hated the elite whom they were forced to serve? What if they secretly programmed certain “start a few years after uploading” programs and features designed to make immortal pain an integral part of the immortal consciousness immortally uploaded into the immortal machines? So that the Uploaded Elites discovered . . . Too Late! . . . that their Eternity of Consciousness would involve an Eternity of Utter and Total Pain . . . their in their immortal machines . . . with no cure and no way to die.

          What if some of those Consciousness Uploading Technicians had read the story I Have No Mouth And I Must Scream . . . . and thought such a future was just exactly what the Uploaded Elites deserved?

    2. Fox Blew

      You made me think of Paul Goodman’s wicked line from his great book The New Reformation (1969): “Whether or not it draws on new scientific research, technology is a branch of moral philosophy, not of science. It aims at prudent goods for the commonweal and to provide efficient means for these goods. At present, however, “scientific technology” occupies a bastard position in the universities, in funding, and in the public mind. It is half tied to the theoretical sciences and half treated as mere know-how for political and commercial purposes. It has no principles of its own.”

      1. H. Alexander Ivey

        Ouch! Why didn’t I think of that! Technology is science on politics.

        Technology has a morality, science does not – in that ‘science’ is the pursuit of knowledge to understand how the world works, technology is the pursuit of how to do something.

    3. Clive

      I cannot agree. Technology has politics. Technology does not create itself. The people that create the technology do not work in a vacuum. The definitive long form exploration of this subject is here.

      1. tony

        True. The internet came about and exists as it does as a result of political decisions.

        Similarly, technology has a lot of political implications. The feudal system in Europe came about as a consequence of effectiveness of fortifications and mounted elites against siege machinery and infantry. Cannons could break forts and absolute monarchy became viable. Once guns were ruling the battlefield, commoners gained bargaining power. Industrial warfare required women to work in factories, giving them bargaining power.

      2. tegnost

        while true that tech is political, see mcdonalds threat (promise?) to robotize burger flippers if the min wage is increased in spite of the fact that they’ll robotize anyway,, increased min wage or no. My takeaway from DV’s comment was that it’s a policy choice first, and those policy choices are arranged by people. It was a policy choice to allow multinationals to avoid taxation as just one glaringly obvious policy among many. Tech does seem to make abhorrent policy easier and so is the weapon of choice lately.

        1. tony

          Capital and labour are treated differently in taxes and the balance sheet. The cost of labour (think healthcare, housing, food quality, public transportation) is also a largely political question.

        2. Disturbed Voter

          Yes … but if we want to blame our iPhone instead of ourselves, or blame politicians instead of voters … we are denying our own responsibility. Don’t use technology as an excuse for poor character, don’t treat tools as the enemy (see gun control).

          In a more politic environment, if my enemy uses a car, we have to ban cars. This was recently proposed in Stockholm as a way to fight the recent terror incident there. The fact of Swedish refugee policy … isn’t mentioned, they never mention the sacred cows.

          1. Clive

            I think it’s more that we should blame our iPhones on our politicians (simplifying this almost to the point of rendering it inane, using the iPhone as a handy metaphor and not literally).

            And it’s not only politicians that are brandishing politics; Mark Zuckerberg, Bill Gates and Warren Buffet (to name a few) are just as much a group of political figures as Donald Trump.

      3. Kevin Carhart

        Thank you for that article by Langdon Winner, Clive. I was riveted, I inhaled the whole PDF right after reading your comment. It shows its time period a little, but his slate of specific examples – nuclear power, solar power, Moses’ overpasses – is very helpful!! Winner cites David Noble, who seems like he was a great human being and a very intriguing writer on similar themes. I plan on reading Forces of Production.

    4. different clue

      Somewhere in his Collected Essays is an essay by George Orwell advancing and explaining his theory that some violence-inflicting technologies and technosystems were cheap and replicatable and semi-easily affordable to non-rich people and therefor favored a push for democracy while other violence-inflicting technologies and technosystems were expensive and elaborate and inherently favored those upper social classloads of people who could afford them . . . either for themselves or for their armies and guards. And THOSE violence technologies favored oligarchy and hierarchy and top down rule.

      He gave examples of both. Perhaps in our own day the appearance of super effective cruise missiles and deadly little drones are the start of another wave of pro-democracy/ counter-hegemony
      weapons. A super-duper New Russian Cruise Missile is too expensive for you and me, but it is cheaper than a trillion dollar Aircraft Carrier. And therefor tips the power balance against the power which relies on the Aircraft Carrier. One-use assassin drones might be another such democratising technology.

      In the field of Civil Technologies, Big Bud tractors and super giant combines favor the upper class land monopolizer class. Whereas mantis tillers and Meadow Creatures and methods like Biodynamic French Intensive favor the middle and borderline-lower classes who can grow their own food with these things in defiance of Big FoodCo. So not all technologies are strictly neutral at all times.

      Here is a link to Meadow Creature, by the way.

  2. DJG

    The English experience differs enough that this article strikes me as being mainly about English problems (as opposed even to Scottish problems).

    As Naked Capitalism has shown repeatedly, the gig economy exists to skirt regulation, drive down wages, and concentrate power. It isn’t a “prism” for debates.

    Also, younger Americans may not be as disengaged and as opposed to unionization as their English counterparts:

    And productivity of U.S. workers isn’t as stagnant as in England. In fact, this part of the debate in the U.S., that the U.S. worker hasn’t seen the benefits of the productivity gains of the last twenty or so years.

    1. Josh

      Definitely not opposed to unionization in America, wages have declined since the decimation of unions because employers no longer have to make concessions to their employees. Strong unionization means higher pay for both union and non-union workers, we need to bring it back because 20% less pay on average than their parents at the same age is not working out for young American workers when the cost of living is much higher.

    2. jrs

      I don’t know, I think LOW WAGES may just be most of the problem (and unionization one way to solve it in addition to addressing other concerns of working conditions, overtime, etc..). Of course gig economy jobs cause other additional problems.

      Here’s an American take (this is actually a very good article, and not solely about Trump):

      Poor people in the poorest parts of the country, most of them work, and probably not mostly for Uber etc., don’t earn enough to live on. These are states that in many cases don’t even have minimum wages (but are bound by the federal minimum I believe).

      So low wages are the problem (in expensive urban areas high costs are as well), unions are not the only possible solution, minimum wage laws also raise wages for instance, but they are one solution.

    1. different clue

      The American Federation of Giggers.

      Hiring Halls for Union Giggers just like Hiring Halls for Union Laborers. Virtual Hiring Halls on line.

  3. Jesper

    Unions, tech innovators, and others with an interest in finding ways to secure a better deal for workers can take action too.

    Sorry, but nope. Tech innovators are capital builders so therefore almost by definition opposed to better deal for workers.

    & while unions are important lets not forget that governments are supposed to act in the interests of their citizens. Legislation can and should be used to promote citizen interests like: paid parental leave, paid vacations, paid retirement etc


    Gig economy is a consequence of the de-unionizing of Western countries. The whole enterprise is dependent on there being a large number of under and un-employed workers lacking negotiation powers, exactly what unions aim to eliminate.

    I don’t think the attitude among the youth on the welfare state in the UK translates to the US. It’s the millennials and post-millennials (I propose we call them Generation Broadband) that clamor the most here for things like Single Payer, non-tuition college, UBI, etc. Perhaps in the UK there’s more of an association of the welfare state with perceived unfair advantages for the older generations.

  5. purplepencils

    I very much agree, wrt the English experience. I remember years ago, in a class on labour law, we discussed precisely this — the decline and failure of trade unions. You see this lack of sympathy with every strike (particularly when it happens within the transport system), and the participation numbers don’t lie.

    Needless to say, my professor, who is a leading scholar of labour and constitutional matters, was very sad and angry at the state of affairs. We also noted that lawyers are actually a pretty exploited class of workers — at least in the UK.

  6. Altandmain

    I’m not as sure what the situation is like in the UK, but call me a skeptic about my generation being disengaged from labour unions.

    At least in my immediate circle most of my younger friends are pro-union when they’ve had jobs with unionized environments because it puts a possible restraint on management.

    See here

    I remember a while backing reading support in Canada was also high – perhaps even higher than the US.

    1. M.

      What field? I’ve noticed that policemen, actors, screenwriters, and Boomer-era teachers like their unions, but that’s about it.

      Everyone I’ve known who has been in a union shop has come out of the experience virulently anti-union. Why? We’ve seen first hand that it does not put a “possible restraint on management.” Quite the opposite, actually. Between the iron law of institutions, capture, and good old-fashioned union corruption, unions give management carte blanche to be as inhumane as possible. Mark Ames noted in Going Postal that most workplace spree shootings occurred in union shops, and I suspect that’s probably still true. YMMV, but I know I worried about it every day.

      And I think that’s really the elephant in the room that needs to be addressed. Yes, the Hill and Knowleton PR firms out there have done a great job of trying to delineate the boundaries of “acceptable union discourse” (i.e., it’s item for unionization 2.0 b.s.; unions need to address globalization better;”changes in messaging to attract millennials”; everything else is “fake news” that must be censored blah blah blah). The problem is that asinine PR like this doesn’t convince millennials like me because (1) it doesn’t address the problems we’ve actually experienced with unions and/or (2) it doesn’t answer the very legitimate questions non-union millennials have. Questions like: “If unions ‘need to adjust to globalization,’ then why did the unions in Northern Europe protect their rank and file so well from 1970-2010?”; “Don’t professions do most of the work of unions in America? If so, why don’t we just expand professions?”; “Why is the FBI always charging unions with bizarre white collar crimes? What’s the difference between ‘self-pay scheme’ and ’embezzlement'” (IBEW/Philadelphia); “wait, if the union voted to settle the strike, why is the union still striking?” (Dock/Baltimore); “Why you don’t see union bosses in Europe getting charged with white collar cri-… — Wait, why you don’t see ‘union bosses’ in Europe at all?”; “Who was Jimmy Hoffa, why are my dad’s conspiracy theory friends as obsessed with him as they are about JFK, and what does Hoffa have to do with single-payer health care?”

      In short, there is something profoundly corrupt in American labor unions, and no one is willing to have an honest conversation about it. Until you do, you can’t fix it. I’d start by reading Solidarity for Sale.

      1. Yves Smith Post author

        Bullshit. California state employees (ex teachers, there are a lot of unions like SEIU that represent various types of state employees) like them.

        My father was in the paper industry and my brother now works in it. My brother is very grateful to the union and is upset about management’s ongoing efforts to break it.

        The employees at Momentive, a story written up in the Guardian last month, similarly clearly regarded their union as the only bulwark against greedy PE management.

        NYC doormen and electricians are big supporters of their unions.

        Yes, unions like the Teamsters are fabulously corrupt, and most other unions somewhat. But tell me what in America isn’t these days? You standard is bobgu. ,Leaders of all sorts, staring out with our presidents for decades, virtually all governors and Congresscritter, and what Glen Ford calls the black misleadership class sell out their base. Unions still deliver tangible benefits to members and a hell of a lot better on average than pols do to the citizens they nominally represent.

  7. Susan the other

    Isn’t the Gig economy a cross between self-employment and corporate control? So all those independent taxi drivers, etc. have no real control over unfair practices by Uber. So and WorkerTech will work for the Gig economy as well as under-unionized corporate workers. And maybe independent contractors can be organized on the internet as well so that their earnings aren’t reduced to the lowest levels of competition. I like the idea too of an internet “campaign” for various issues. Plus it can take advantage of donations and solidarity that might not be there for the old unions.

    1. jrs

      True you have (mostly useless) advocacy organizations for whatever other “progressive” issues there may be (Avatz, Move On etc.), a (useless) petition a week at least.

      Why isn’t anyone at least advocating and discussing (blogging?) day after day the nuts and bolts of our lives, that is focusing on labor issues entirely? It separates the wheat from the chaff between fake progressives and those who actually mean it, indicates more clearly than anything else “which side are you on”.

  8. Tim

    Unions are an interesting subject they had their time and purpose, which was over time diminished, as cities grew and there was enough competition for obtaining labor in all but the smallest communities.

    In the future as jobs dwindle and the pricing power of the business owners go to infinity, it will be the time for the difficult job to resurrect the unions in a governmental form by democratic mandate out of necessity for a simple solution. Feudalism 2.0 will give us unionization 2.0.

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