Solidarity and the gig economy

by Peter Hall-Jones

for the New Unionism Network

It’s a credit to the tireless efforts of Professor Guy Standing that the word ‘precariat’ has made its way into most English dictionaries. In case you’re not up to speed (and who is these days?) it means: “the class of people who are poor and do not have secure jobs” (Cambridge Dictionary). Sure, there has been a bit of debate around whether this group really constitutes a separate ‘class’, but nobody disputes that the phenomenon itself is very real.

Almost 40% of young workers in the OECD are in non-standard work, such as contract or temporary work, or involuntary part-time employment (more). At global level more than 60% of workers, predominantly women, are in temporary, part-time or short-term jobs in which wages are falling (ILO 2015). And of the top 20 global employers in 2017, five are outsourcing and ‘workforce solutions’ companies (more).

In the twenty-first century Dolly Parton’s ‘Nine to Five’ just doesn’t work as an anthem anymore.

Naturally, the English language being what it is, we have a range of apolitical synonyms for the word ‘precariat’. Workers who survive by performing a series of temporary jobs, and/or juggle bits and pieces of contract work, are called ‘casuals’ or ‘freelancers’ or even ‘micro-entrepreneurs’. Their stamping ground is ‘the gig economy’. It’s all very rock’n’roll. Being your own boss, meeting endless new people, wide horizons, flexible hours, maximum variety… what’s not to like? In fact, there is a lot of research to suggest that the majority of such independent workers – in the USA and Europe at least – have ‘chosen’ to work this way (eg McKinsey Global 2016).

At this point you might like to reflect for a moment upon the use of the word ‘choice’ in industrial relations. I was one of a generation who ‘chose’ to go on the dole in New Zealand in the 1980s. In reality, the employment market had collapsed around our ears. There were no jobs for us to go to. The only real choice we had was whether or not to interpret our situation in a cheerful light.

Anyway, choice or no choice, all this is about to change.

Automation, paired with a combination of AI and big data, is coming together to create an economy dominated by online platforms. Technologies such as blockchain and digital currency are forcing their way into mainstream economics in what the Davos crowd has called ‘the fourth industrial revolution’ (more). The World Economic Forum has even put dates on the tipping points for such developments (ie the dates by which they will have become mainstream). In case you’re interested, here are their predictions¹. As you read, have a think about the number of livelihoods that are on the line:

2021: Robots and automation;

2021: The Internet of things, wearable Internet;

2022: 3D printing and manufacturing;

2023: Governments and the blockchain;

2023: Supercomputers in our pockets;

2023: Implantable technologies;

2024: 3D printing and human health;

2025: 3D Printing and consumer products;

2025: AI and white-collar jobs

2026: Driverless cars;

2026: AI and decision-making;

2027: Bitcoin and the blockchain.

It doesn’t end there, of course. Soon afterwards we’ll have similar tipping points for nanotechnology, genomics and quantum computing. Then there’s the next big thing, and the next, and the next, whatever they may be. The problem is, as all this happens enormous chunks of the world’s workforce are going to become surplus to need. Put simply, we are headed for an era in which there is far greater labor supply than there is labor demand. More workers than work. Some might manage the transition by adapting this way or that, but the vast majority of us will be joining the gig economy. Here’s a prediction: for a few years many of them will cheerfully proclaim it was a choice. 🙂

The effects of this shift are already being weighed. The International Labour Organisation puts it this way: “The ongoing transformation in the employment relationship is having important economic and social repercussions… It contributes to the growing divergence between labour incomes and productivity, with the latter growing faster than wages in much of the world. This, in turn, has resulted in a shortage of aggregate demand that has stubbornly persisted throughout the years since the crisis. This report (download) estimates the loss in global demand at $3.7 trillion as a result of unemployment, lagging labour incomes and their effects on consumption, investment and government revenue.”

The way this is written insulates us from what is actually being said. “A shortage of aggregate demand” means people not being able to buy goods and services — i.e. poverty. Anf of course this creates a vicious circle. Reduced demand will lead to reduced production and an increasingly depleted jobs market. We are heading for an era in which there are far more workers than there is work for them to do. The ILO puts it this way: “A vicious circle may be at work, with lower demand affecting output and employment, thereby further depressing demand” (more).

Okay, Geneva bureaucode aside, what does this all mean for the average working person? Unless we can find a way to change the rules of 21st century capitalism we are screwed.

We??

It seems almost quaint to talk about class and solidarity and things like that in the 21st century. After all, working people have spent most of the past three decades learning how to compete for work, in much the same way that companies compete for business. A whole new industry has developed around improving job interview techniques. Curriculum Vitae have become personal branding exercises. Employment agencies serve as mass filtration systems. Sites like oDesk, Elance, Clickworker, TaskRabbit, Hello Alfred, Handy, Upwork, Freelancer.com and Amazon’s Mechanical Turk operate as international auction houses for work. This is an environment which can only offer a declining role for organizations such as unions, which have been traditionally defined as “free associations of employees”. In many countries, this industrial role is codified into law, meaning that unions cannot legally operate within the gig economy!

The results are already becoming clear, especially in those wealthier nations where workplace relationships have changed fastest. Nowadays, the union movement is a battleground not an army.² After more than thirty years of neo-liberalism, they have only just managed to turn a rout into a retreat. Now a new storm is gathering. The current transition to an online platform economy will massively undermine unionism in every respect, creating a whole new generation of membership decline and internal disputes.

Anyone who has read Paul Mason’s “Post-Capitalism” will have sensed that there is a new way forward. Unfortunately (and understandably!) Mason does not talk much about unions. However, we can look to writers and activists like Janelle Orsi to join the dots. Orsi has argued for a transition from investor-owned to producer and customer-owned platforms (more). Such a shift is clearly in the social interest but, of course, that does not mean it will happen. If it does not, Orsi argues, people should do it for themselves. They should set up co-operative versions of these global platforms (more).

Pie-in-the-sky? Absolutely not. It was working people who built these platforms, not directors and investors. In taking up a challenge such as this, working people would also have other advantages. Firstly, by far the majority of consumers are workers. By and large working people are the market; both the buyer and the seller. In such a situation, solidarity is simply rational behaviour. Secondly, all profits from co-operative enterprises are returned to the members, or reinvested in the enterprise on their behalf, rather than taken out of the system. This confers another great business advantage. Thirdly, the co-op’s members could act as guarantors for a minimum hourly rate, thus attracting other workers away from the “race-to-the-bottom” that is evident in other platforms. Fourthly, in many countries workers’ platforms such as this would be exempt from tax (eg “T-corporations” in the USA). In every way, solidarity confers a natural advantage.

Can ordinary working people hope to change the rules of traditional economics in such a profound way? It is at this point that we might look to the union movement. After all, it is the largest democratic platform in the world. The International Trade Union Confederation (who are the strongest player at international level) represents about 200 million workers in 163 countries, with 331 of their affiliates operating nationwide. The World Federation of Trade Unions represents another 90 million workers and, among the independent national bodies, the All-China Federation of Trade Unions alone represents about 280 million workers. Then there are regional federations such as the General Confederation of Trade Unions in Eastern Europe (with about 75 million members).

At this point anybody who knows the union movement will be having a bit of a chuckle. These groups could not work together for long enough to organize a cake stall, yet alone a cutting-edge digital platform. Furthermore, there is a huge overlap in their membership numbers, some of which are dubious to start with. And some of them have internal democratic practices that are, well, let’s just settle for the word flawed. However, I would suggest we set aside that part of the discussion for a moment.

The unions’ natural partner in developing “solidarity platforms” (to coin a term) would be their oldest historical ally: the co-operative movement. Taken together, according to the International Co-operative Alliance, co-ops have about 1 billion members worldwide. Some co-ops are owned by workers, others by clients, others by consumers. Each of these groups could provide invaluable leverage and development input.

Again, there are internal problems within the co-op movement that could present significant barriers to I.T. developers. The global platform economy relies on multiplying innovation with economies of scale. It needs to be as free as possible, in order to work rapidly and change direction at a moment’s notice. The last thing developers need is the burden of having to seek deep consensus. Worse still, imagine day-to-day control by unions: delaying strategic questions until the next meeting of the steering committee; factional pressures; squaring milestones with congress resolutions; factoring in subsequent caucus decisions; and having to consult with structures within structures within structures…

Almost certainly, solidarity platforms would need to be autonomous projects. However, this presents no problems in terms of ownership. Furthermore, the international union movement has more experience with autonomy than it might care to admit. There have always been strong characters who run their own de facto fiefdoms. The process just needs to be rendered formal, accountable and transparent.

The proposal, then, would be to set up labor-owned and controlled alternatives to global platforms such as Uber. It sounds ridiculously ambitious, doesn’t it? And yet private capital has been doing this kind of work for years. More to the point, working people did it for them. As we discussed above, they have huge advantages to call upon for advantage and leverage; they are far better placed than the private sector to succeed in such projects. And on top of that, they are in a position to adopt proven production and development models — ones that have already succeeded. (And who better to help with this than the ACFTU?)

As always within the union movement, the question of resources is central. Most of the global federations and their international bodies are struggling to adapt to declining budgets. Some of the national bodies and their affiliates are relatively wealthy, but they have no remit to consider this kind of international project. Not only that, but members would be quick to point out that most platform projects fail within the first two years.

We could debate the pros and cons exhaustively but one way or another, if unions are to evolve and survive, they must start engaging with the gig economy. It’s a very safe bet to say that while they are trying to work out how, there will be an ongoing decline in solidarity (if that word sounds a bit too ‘communistic’, try social capital or public spirit or fellowship). Inevitably, this discussion will lead us back to a series of questions the union movement has been wrestling with for years:

Why would workers who compete for work as individuals join a union? What benefits might new forms of membership confer? Without ‘traditional’ structures uniting us, can there be a collective way forward?

The New Unionism Network has no resources to speak of. The best the members can do is raise questions such as these and suggest their own ideas. In this instance, I would like to suggest that the missing word is prototyping. Given this and a few champions (probably at national rather than international level) solidarity platforms might well provide an answer to all three of the questions above. More importantly, if working people can engage directly with the new economy, they might end up with a world they want, rather than the one left over after capital has done its business.

Additional notes

See Deep Shift: Technology Tipping Points and Societal Impact, World Economic Forum Survey Report, September 2015, download as at 29/12/17. To borrow a phrase from Karl Marx, who was writing about the church at the time.