The California Workers’ Rights Bill Is a Start, but We Need a More Radical Approach to the ‘Gig Economy’

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Yves here. While I support the general thrust of the post below, it is mistaken in its contention at the end that a UBI would act as a bulwark against low wages. In fact, some of the squillionaires supporting it make it explicit that the reason they are pumping is so they can pay people in early stage startups nothing when the might otherwise have to pay them….gah…salaries. They say it in a more coded manner but it’s not hard to unpack what they mean.

The flaw is that a UBI at anything approaching a living wage level would be massively inflationary. And anything below that means it would simply serve to allow employers to pay even less to get them to top up the UBI to something they could survive on. Anyone who does not understand that a UBI would be a subsidy to corporate America hasn’t thought things through.

By contrast, a Jobs Guarantee is explicitly designed to force businesses to raise their pay levels and workplace conditions by setting a price for labor. And it could operate on a very large scale by being designed to provide more productive capacity via needed services that are being neglected, like infrastructure repair and construction, and day and elder care.

By Phil Jones, a research affiliate at Autonomy and a PHD researcher at the University of Sussex. He is currently writing a book about tasking and crowdwork. Originally published at openDemocracy

After many years of steamrolling workers’ rights, hoovering up venture capital and diligently avoiding taxes, the once invincible gig economy appears to have been dealt a fatal blow. The landmark California bill, known as AB5, will prevent many companies from treating employees as independent contractors, after overwhelmingly passing the senate and assembly earlier this month. Recently signed into law by the state’s governor, Gavin Newsom, the legislation will begin to take effect in 2020.

The bill lays out a clear standard that threatens a business model designed to misclassify employees as freelance contractors. Under the so called ‘ABC test’, workers are employees if (a) they perform their work under a company’s control, (b) their work is integral to the company’s business and (c) they do not routinely engage in an independent trade, occupation, or business of the same nature as the work performed for the hiring company.

Undoubtedly, drivers for Uber, Lyft and Amazon Flex will pass the ‘ABC test’ with flying colours. Uber, for instance, controls the workers’ rate of pay, strictly regulates the kinds of car its drivers can use, and is liable to ‘deactivate’ drivers with below average ratings. Not only does the company entirely control the performance of its workers, but it relies on the fares and data collected from their ‘rides’ for revenue.

Its venture capital flow depends on developing self-driving vehicles modelled on the data sourced from its drivers. Already undergoing a long-term ‘profitability’ crisis, the company has – somewhat unsurprisingly – threatened to ignore the legislation, which would give its workers the state’s minimum wage, overtime pay, worker’s compensation and – perhaps most importantly – the right to unionize.

But while the legislation will bring these rights to many in the ‘gig economy’, a large proportion of the most insecure and worst paid remain outside the bill’s purview. Take Amazon Mechanical Turk, a platform which allows ‘requesters’ – often start-ups and big tech firms – to outsource undesirable, infinitesimally small, but nonetheless important tasks to ‘microworkers’. Paid by the task – we’re talking less than $1 per hour, and lacking any sense of security or work/life boundaries – these workers represent the vanguard of labour exploitation in our digitized moment.

A standard day on a platform like Mechanical Turk, Figure Eight or Clickworker might involve anything from categorising images of horses, flagging up offensive content, to transcribing audio of people speaking in various Scottish accents. Having worked on a number of these platforms, I can vouch for the fact that taskers must endure mind-numbingly dull work, frequent glitches in the software that prevent task completion, and the constant anxiety of non-payment (many of these platforms give total discretion to ‘requesters’ and refuse to enter disputes). I myself have been denied payment for apparently ‘incomplete’ or ‘unsatisfactory’ work.

For this reason, these platforms represent a grey area for the AB5 bill, which is evidently directed at companies such as Uber that, just like more typical ‘employers’, control the rate of pay. Crowdwork platforms fall short here because the requestersmake all the decisions regarding payment. The microworker may undertake 40 different tasks over the course of a day, each from a different requester and each at a different rate. This fundamentally does away with any clear sense of an employer/employee relationship.

Another reason why the bill is unable to cover microworkers is that the ‘ABC test’ reinstates a somewhat out-of-date definition of ‘employee’ by conflating it with a stable occupation. Unlike an Uber driver, who has a very specific role, the tasker is eminently flexible, taking on the guise of many diverse occupations to serve a variety of requesters. This allows crowdwork platforms to reasonably claim that ‘taskers’ do not have a role and are therefore not employees.

Granting ‘employee’ status in a period when the very categories of work are breaking down is not enough. At least in part because there are new, more precarious, and conceptually slippery forms of work emerging all the time. Due to this reality, the bill may have some perverse consequences, potentially pushing ‘independent contractors’ into the sharp end of the ‘gig economy’.

If Uber and Lyft decide to take their business out of California, a very real possibility, it is far from inevitable that their workforce will find better, more stable jobs elsewhere. More likely, they will have to seek out even more precarious work like microlabour, a possibility backed by a Pew survey that reveals 25% of workers accessed labour platforms because there was no other work in their area.

To protect the most vulnerable workers, a group that many of us are at risk of becoming part of, we need to deal with the real crisis that drives workers into the arms of platforms. Here in the UK, we are facing an underemployment epidemic, which between 2008 and 2018 doubled from 2million to 4million. Perhaps not surprisingly, between 2016 and the present, the number of people accessing online labour platforms at least once a week has also doubled from 4.7% of the adult population to 9.6%, as found by a recent report by the TUC and the University of Hertfordshire. The correlative rise in platform use and underemployment figures is backed by the report’s finding that most workers accessed online labour to top up a shortfall in their income.

While legislation such as the AB5 bill should be commended for offering a portion of the workforce better rights, it does not address an economic context that makes insecure and terribly paid work a reality.

That is why I believe the time for a Universal Basic Income (UBI) has arrived. Underemployment, and increasingly unemployment, are set to intensify as automation advances. A UBI would allow us to enjoy some of the benefits of this advance, as well as giving us the security required to resist the companies like Amazon and Uber that use automation to drive down pay and rights.

As a recent briefing for the thinktank, Autonomy, suggests, an ideal UBI would free us from the insecurities that force us into lousy, low-paid jobs. What we need are radical policies alongside legislation such as the California bill. Only then will we get the economic future we deserve.

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8 comments

  1. DJG

    I agree with Yves: Jones is good as a diagnostician, telling us about some of the worst abuses in the new system of piecework and outsourcing. Yet UBI, especially the cheap-o proposals in the US of A, won’t help.

    Instead, the states and the feds should be, errrrr, encouraged to enforce U.S. labor law and antitrust law. Another gross abuse is the number of companies now outsourcing almost all of their labor force or what formerly were whole departments and pretending that those “captive” outsourced workers are not employees. The IRS has had standards in place for years as to what makes a person an employee, but with both parties quite happy to de-fund IRS enforcement, we see more and more abuses of the average worker. Quelle surprise.

    Something else, probably for another essay, is the erosion of solidarity in the U S of A down to nothing. People know that Mechanical Turk pays nothing, that UberEats drivers make nothing, that Amazon delivery drivers are engaged in piecework–yet they do nothing about it. (I am reminded of a recent incident in which a woman from the Department of Downward Freelance Management questioned me for raising the rate of a free lance who took on a highly complicated task–yeah, thanks, Sisterhood Is Powerful.)

    Reply
  2. redleg

    While this law is definitely necessary for the likes of Uber, et al., it makes a mess of of the arts-style gig economy. It puts, for example, music session work as employment, for which someone has to provide benefits. The performing rights organizations (per BMI, of which I’m a member) tried to get an exemption added to this law, but were denied.
    Considering that California is the hub of film and music in the US, and globally, I’m not sure what they were thinking when they failed to address this part of “gigging” into the bill.

    Reply
    1. False Solace

      It’s possible that musicians are also human beings who exist in the economy and need a living wage and benefits to survive. I don’t see an argument for giving any employer a free ride.

      Reply
      1. Jasbo

        It’s also possible that not every mutually-beneficial working relationship needs to be shoehorned into a master/servant employer/employee relationship. AB5 is a too-broad meat-cleaver approach to what is specifically a “platform problem” (specifically, providers not being able to name their own prices). Unfortunately it is going to destroy MANY positive and mutually-beneficial freelance/independent working situations along the way. Owner/operator truckers, small independent hoof-trimming proprietors serving dairies, independent tech consulting specialists (highly paid BTW) whose work is integrated into larger projects, just to name a few examples.

        Meanwhile, California is actively driving out, in droves, the very people who directly risk their own (real) capital creating jobs (e.g. small business owners), and simultaneously torpedoing its future with MASSIVELY overpromised government employee pensions that those in power keep pretending are not a problem. The “guaranteed jobs” are literally leaving the station, headed to other states.

        The fallout hasn’t settled in yet, but it will…

        Reply
  3. Luke

    Rampant underemployment seems more likely than anything due to 1) incentives to make employees PT, and 2) an excessively large labor force. Most people here likely know much of what can be done re #1. #2? Ending/reversing recent immigration and encouraging fecund marriage (with SAHMs) and discouraging frivorce would alone easily fix it, going far beyond what automation is changing (not that that is minor).

    Reply
    1. KiWeTO

      the problem with calling them slaves is that they are being paid, and can “leave” the job market any time.

      Slavery is any system in which principles of property law are applied to people, allowing individuals to own, buy and sell other individuals, as a de jure form of property.[1] A slave is unable to withdraw unilaterally from such an arrangement and works without remuneration.

      wikipedia.

      I previously though Serf was a better word… but…

      In return they were entitled to protection, justice, and the right to cultivate certain fields within the manor to maintain their own subsistence.

      Wikipedia again.

      Perhaps, use the label disposables… since the process uses them, then ignores and cares not about any post-use consequences. (Externalizing possible outcomes onto society or others).

      Netcups?

      Reply

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