By Damon Silvers | Twitter: @DamonSilvers

Since 2008, virtually all of the job growth in the United Kingdom has been in the form of casualised labor — self employment, agency workers, zero-hours contract workers, and part time workers. Some would call this the future of work but to understand what its implications are, its worth considering whether this trend is really “Back to the Future.”

Let’s recall a key moment in British labour history 130 years ago — the London Dockers Strike of 1889. It was the beginning of a wave of labour militancy among unskilled workers, at the time called the New Unionism, that led to the founding of the Labour Party, and the adoption of modern British labour laws in the years leading up to World War One. While the dockworkers may seem like figures out of a dim and distant past in the age of robotised, containerised ports — they are actually as contemporary as it gets. This is because the London dockers were gig workers, or as some now say, platform workers. Of course their platform was an actual platform made of wood and not a virtual one, but the labour market they earned their living on was in essence very much like that labour market that Uber drivers or Task Rabbit workers live in now — a labour market where ship owners hired labour by the job. Buyers and sellers of labour interacted through a daily labour auction called the Call On, and the relationship between employer and worker in the London docks lasted no longer than the time it took to unload a ship.

In the 19th century, temporary work arrangements were the norm in manual labour of all kinds. Particularly unskilled manual labor — both in industries that are still organised that way, and in industries that later turned to the permanent employment model. In the coal mines, the docks, the ships, the steel and iron mills, and the textile mills of industrial 19th century Britain, workers hired on for cash with no expectation of job security and, in many sectors, on terms that were structured around a specific task. In this world of work, strikes were generally about wage rates, pure and simple, or issues of dignity and safety. Strikes of unskilled workers, like the London dockers strike, were intense and often met with violence but, even when successful, rarely led to sustained worker organisation. They were more like the egalitarian social movements of today like Occupy Wall Street than the legally structured industrial action of the post-World War II era.

Ultimately the growing political strength of the British labour movement combined with the realisation that a healthy economy needed healthy consumer demand drove a market-shaping policy response. The response were labour laws that encouraged collective bargaining over time within enterprises — collective bargaining whose outcomes were labour contracts covering the entire workforce, not just skilled workers. Through the process of collective bargaining and laws encouraging employers to provide health and retirement benefits, casual industrial labour became long-term employment, and the gains of rising productivity were shared broadly through the workforce to varying degrees throughout the developed world in the mid-20th century.

But today we have gone back to the future. When Uber drivers strike, their target is the way the Uber app runs an electronic Call On, or in US terminology, a shape up. At the core of Uber and Lyft’s business model is a spot market in labour, where the middlemen at Uber have a huge information advantage over both the driver and the passenger.

Behind the exploitation inherent in a spot market in labour is a labour strategy. The key thing about the behaviour of the new tech employers, like the 19th century industrialists, is that they want to segment their workforces. They want long-term relationships with managers and some technical staff, while they seek to outsource everyone else, from their cafeteria workers and security guards to their less favoured software developers — to misclassify them as independent contractors, to hire them through labour brokers and web platforms, to commodify them in every way possible.

Ironically, technology enables the casualisation of work and, at the same time, makes it possible for labour market institutions like wage and hour regulation and collective bargaining to respond effectively to casualisation. While Uber’s software allows it to manage Uber drivers without any human contact between drivers and managers, at the same time it obviously facilitates determining exactly when drivers are working for Uber, how much they are getting paid for that work and the like. Such information is necessary for enforcing wage standards, payments to benefit funds, hours limitations and other basic labour protections.

What does this mean for innovation? The casualisation of labour and the distancing of workers economically and socially from the firms that coordinate their labour and capture the profits from their labour leaves those workers with little incentive to participate in innovation or to seek to work more productively. They can neither share in the gains through long term association with the firm or through collective bargaining, nor do they really have any ability to capture the knowledge they have and sell it to their employers in the way that unions of 19th century skilled workers did in industries like coal and steel.

On a larger scale, this makes the argument one sometimes hears from economists that economic inequality is the result of technological change that favours skilled workers into a self-fulfilling prophecy. Employers segment the workforce into small groups of employees with long term jobs and benefits and much larger bodies of casualised workers with no real relationship with the coordinating parent company. These casualized workers then have little prospect of being integrated into processes of innovation that are taking place really only at the higher levels of the supply chain.

But it does not have to be this way.There is nothing deterministic about the relationship between capital, technology and labour. It is a result of how the market has allowed to be shaped by some forces and not others.

A better way must first recognise that short-term task-oriented work has been enabled by digitalisation and that, for both workers and consumers, this process has been beneficial in terms of increased ability to both get goods and services on demand, and to some degree in providing workers with greater scheduling flexibility that workers value. Though we have to be careful about that last point. A worker on a zero hours contract has zero flexibility — all the flexibility has been captured by the employer. And both surveys and labour market data suggest that most workers who sell their labour on platforms would prefer permanent, full time jobs with benefits, to the flexibility of platform work.

Nevertheless, the solution cannot be making all jobs full time — in fact as anyone can tell you who has worked in the entertainment or the construction industry, millions of jobs never conformed to that model in the first place.

The challenge — from the perspective of innovation policy, and incomes policy and from the perspective of the health of our political economy — is how to build solidarity — solidarity among workers who may only know each other through social media, and the kind of solidarity within the process of value creation that supports and feeds innovation. If you don’t like the word “solidarity” think “team.” And that is going to require institutional innovation and market shaping through public policy.

At one level, the challenge is the same faced by the New Unionism 130 years ago, how to build lasting networks of solidarity and power among workers who have a tenuous relationship with their employers and perhaps with each other, and who do not have the bargaining power that top of the food chain managers and skilled workers have.

In the networked world of the Fourth Industrial Revolution, this project is about reconstructing the enterprise — the actual common mission of a group of workers, as a labour market unit. Effectively shaping labour markets in this environment requires looking across the legal boundaries between firms within a production process that top of the food chain firms use to divide workers and to capture value for themselves.

This approach to shaping labour markets requires undoing public policies that encouraged the disaggregating of the enterprise as a labour market entity. At the same time, this type of labour market policy has to fit with the increasingly networked nature of production. This means common labour standards, and perhaps common sectoral bargaining and collective agreements, both across competing firms, and down through supply chains.

The digital labour market also creates new possibilities for workers to have greater control over aspects of the employment relationship. For example, it does not appear to make sense for individual short-term employers of labour to be the managers and fiduciaries of those workers’ benefit plans. On the one hand, this is a powerful argument for strengthening universal social insurance plans like the NHS and the US Social Security system. On the other hand, workers have always set up their own benefit plans in the context of casualised labour markets, and this is something the state could either encourage or mandate.

That brings us back to the issue of innovation and the challenge of how to shape labour markets so that workers are full partners in innovation, both within firms and in the larger political economy where innovation-related goals and missions are defined. Because in the labour market of the Fourth Industrial Revolution, learning and learning through time is the key employee benefit. Employers want workers to benefit from lifelong learning, but employers want someone else to organise and pay for it. And they want training to be firm-specific. Employers naturally don’t want their workers gaining skills at their expense which they then take to another firm.

Sectoral or industry-wide training institutions are the obvious solution to this problem. Worker control of these institutions, or at least tripartite governance by unions, firms and government, has been shown over and over again to be the only real solution to individual employers’ tendency to either not invest in training at all, or to invest in training that is so firm specific it acts as a kind of handcuff, tieing the employee to the employer, rather than as a liberating influence in employees’ lives.

So when policymakers shape the labour policies for the Fourth Industrial Revolution the hidden but critical question they are answering is to what degree will innovation be the project of the workforce as a whole? Will the workforce of the 21st century be divided into insiders and outsiders? On the one hand a relative handful of employee/partners with continuously improving skills and equity stakes, and jobs defined by problem solving, and on the other a much larger group of independent contractors, slaves to casual labour markets, whose jobs are routinised, and insecure, prey at any moment to technological displacement.

When policymakers encourage the casualisation of work and the fragmentation of the firm, they are effectively shaping labour markets to be bifurcated in this way. They are choosing stratification, not co-creation. They are truly taking us Back to the Future. To move forward to a new, better future requires new institutions of solidarity, and a commitment to the idea that all workers are potentially innovators, not just a privileged few.

Damon Silvers is a Visiting Professor in Labour Markets and Innovation at the UCL Institute for Innovation and Public Purpose (IIPP).

N.B. This blog is part of BEYOND4.0 — Horizon 2020 (No 822296)