In the United States, there is little doubt that the labor market is changing. Growing inequality and higher concentrations of wealth has meant a shrinking middle class. Fewer Americans spend their careers with the same employer. A significant minority—some estimate over a quarter of the labor market—work in the “gig economy.” The euphemistic label encompasses a slew of industries in which employees with legal protections and benefits like mandatory minimum wage, workers’ compensation, and health benefits have been transformed into independent contractors to whom the contracting agencies have no obligation. We are only beginning to understand the long term consequences of this change.
These new gigs include not only “ride-sharing” services like Uber and Lyft, but also transcription work for the television and movie industries, web design, data entry, call-center work, and even landscaping and household maintenance through platforms like Taskrabbit. In addition to independent contractors, there are other industries that regularly employ temporary contract laborers. The categories here become a bit confusing as contractors may be hired through a hiring agency, may or may not have taxes deducted, but are almost always without benefits such as healthcare or paid vacation/sick days. Precarious employment, the gig economy, alternative work arrangements, contingent labor are all terms used to describe this labor market. According to a study from the National Bureau of Economic Research, almost all of the jobs created between 2005 and 2015 have fallen into this category, meaning that traditional, secure, long-term jobs are in steep decline, especially since the Great Recession.
For companies, the payoff is obvious: employment costs like insurance are displaced to the contractor, who assumes more risk with few rewards. Coupled with the current political climate, where cuts to benefits and entitlements seem highly likely, these growing risks leave workers with little room for bad luck. The stories abound, and they underscore the personal costs of the new economic reality.
In a piece co-published by American Prospect and Capital and Main, Gabriel Thompson tells the story of Morgan Jones, an Oakland, CA resident who was laid off in 2008 and has struggled to make a living through transcribing Rachel Ray television shows for $5/hr, worked for a courier service for minimum wage until the company lost the contract and he was laid off from that job as well, and worked at Instacart, shopping for wealthy patrons of Whole Foods. Contrary to the technocratic triumphalism of its proponents, Jones did not find an “exhilarating new world” of independent, fulfilling labor. Instead,
He was his own boss, but the work he was doing, he said, felt “close to volunteerism.” With such low wages, it was no longer possible to avoid the fact that, as he settled deeper into middle age, he was ‘falling out of the middle class.’
In The Guardian, Hannah Jane Parkinson profiled Deliveroo riders in London, who faced the same kind of working conditions—no benefits, guaranteed hours, paid sick leave, or vacation time, and low wages—and described their mental state as isolated, depressed, anxious, and alienated. In The New Yorker, Nathan Heller begins a lengthy piece on the gig economy with a profile of Seth F., the handy person he hired from Taskrabbit. Seth F. hung pictures in Heller’s new apartment. He told me that he approached the work with gratitude but little hope. ‘These are jobs that don’t lead to anything,’ he said, without looking up from his work. ‘It doesn’t feel”—he weighed the word—‘sustainable to me.’
In the style of Barbara Ehrenreich, Sarah Kesller spent a month trying to make a living through various gig economy jobs, finally settling on Taskrabbit through which she made about $11 an hour. In New York City, that won’t get you very far.
If the personal risks are high, we might hope that there are political solutions, through which we might collectively moderate the individual losses of the new economy. David Rolf, Vice President of SEIU, co-authored an article with venture capitalist Nick Hanauer in which they argue that this “changing nature of work” is both an inevitable consequence of technological innovation that promises “new efficiencies and greater flexibility for ‘employers’ and ‘employees’ and also the “biggest threat to middle class workers.” For Rolf and Hanauer, the death of the middle class can be attributed to the trickle down economics and the lionization of the rich as “job creators.” The proponents of this economic perspective have been in control of government since the 1980s and have violated the social contract 1950s, 60s, and 70s in which “employers generally accepted that they had a responsibility to safeguard the welfare of their workers.”
Rolf and Hanauer avoid terms like the Welfare State and neoliberalism. Yet these terms would easily fit in their description of the New Deal/post-war social contract and its demise in Reagan’s America. They argue that: “In the technological economy of the twenty-first century, growth and prosperity are the consequences of a virtuous cycle between innovation and demand.” The engine of demand, middle class consumption is stalling in danger because the middle class faces the existential threat of economic insecurity. Consequently, they argue for a “Shared Security Account” that has a system of transferable and prorated benefits so that workers maintain healthcare, vacation days, sick days, and a 401(k) while moving among the many different employers they are likely to have in gig economy. In other words, the benefits once provided by employers would now be administered by the government. While their proposal for transferable benefits is compelling, their argument reveals a certain idealization of technological innovation and “disruption” as inevitable and virtuous and a nostalgic vision of corporate responsibility that never existed.
Rolf and Hanauer proposed their “Shared Security Account” in 2015, a time of relative optimism before the election of Trump. The middle class is now in worse shape and facing even more dire circumstances if the Republican tax bill passes. Reflecting this shift in political fortunes, in June of this year, Gabriel Winant wrote a piece for Dissent focusing on the working class. Winant suggested that a new working class of precarious, racialized, and feminized labor is poised to become “the only force that can end decades of retreat and renew the struggle for our democracy.” For Winant, the Democratic Party increasingly became part of the very engine of neoliberalization that created this new form of labor and liberal elites continue erroneously to identify “working class” with the “right-wing hard-hat, the eternal Reagan Democrat.” Unions, unable to address the rapidly changing labor market, are unlikely to become organs of “mass popular radicalism.” Winant argues that in order to become a political and social force, the new working class will need to “reinvent or transcend inherited organizational forms.”
Michael Kazin, the editor of Dissent, published a skeptical response to Winant:
Winant’s prediction of a future working-class insurgency is lovely to read but lacks an appreciation of how such insurgencies emerged in the past. They depended on…people sharing the same conditions and the same kind of employers—and having the confidence that, through mass action, they could improve their lot…[this] is not true of those who endure the precarious realities of work for a welter of small and medium-sized firms along a global supply chain.
Setting aside the role of the Democratic Party in forming today’s neoliberal working conditions, the disagreement between Winant and Kazin centers on the possibility of collective action under the conditions of precarious employment. Isolation is an overwhelming feature of precarity, so there is an inbuilt resistance to mass organization. Further, for many this isolation stems from the fact that their economic status and condition is unexpected. You get the sense from reading the narratives that this is not the life these individuals felt that they were supposed to have. Consequently, they resist identifying as a group with shared economic fates and see precarity, at least initially, as a temporary condition instead of a structural feature of labor arrangements in the twenty-first century. As Yasmin Nair detailed in this publication, those who feel like their life should have been different often embrace a distinction between their status as professionals, who should have a different life and the unwashed masses, who have not earned a chance at financial stability and economic prosperity.
In the seminal work in economics in the twenty-first century, Thomas Piketty argues that “wealth is so concentrated that a large segment of society is virtually unaware of its existence, so that some people imagine that it belongs to surreal or mysterious entities.”1 As the middle class shrinks, even a modest level of wealth becomes a surreal and mysterious thing as more and more people fall out of the middle class. Yet, our culture is still deeply influenced by the popular mythology that says getting an education, working hard, and planning sensibly will lead to financial security and even a modest level of economic prosperity. Piketty spends a lot of ink debunking the myth of this meritocracy from a macroeconomic perspective, but the individual narratives of trying to make it in the gig economy echo the same themes.
The new world of precarious employment shows that getting an education, working hard, and planning carefully will allow you to work three different jobs, rent an apartment that you can barely afford, struggle under the burden of predatory student loans, and go to the emergency room for health care.
Thomas Piketty, Capital p. 259. ↩