Three months before an election, Doug Ford wants to raise the minimum wage of gig workers to $15 an hour. But Jim Stanford warns that the devil is in the details:
The biggest problem is that the so-called minimum wage will only apply for time gig workers spend engaged on an assignment: driving a passenger, delivering a meal, or performing some other assigned task. But gig workers regularly spend a great deal of time (often over half of their work day) waiting for those assigned fares/tasks, or traveling back to central hubs after completing a task. This unpaid time is excluded from this new ‘minimum wage,’ with enormous effects. For example, if a gig workers spent half their work day waiting, then the ‘minimum wage’ only pays $7.50 per hour.
This idea of paying workers only for time they are ‘actively engaged’ on a specific task would have nefarious and destructive impacts if applied to other occupations. Retail clerks would be paid only when actively helping a customer. But what if it was a slow day? They could earn almost nothing. Firefighters could be paid only when they are called out on an emergency—not for the time they spend being ready to respond quickly and effectively. Cybersecurity experts would be paid only when their company’s website was under attack.
For centuries employers have tried to shift the cost and risk of fluctuations in their business onto the backs of their workers, using a whole range of strategies: such as piece work, on-demand hiring, labour hire services, and others. There is nothing new in the digital platform industry’s strategy to do exactly the same thing—other than the (economically trivial) fact that they use a smart phone to organize this exploitation. The claim by Uber and others that this is a whole ‘new model’, driven by technology, that requires a ‘new regulatory context’, is a historical lie.
Even worse than not paying for waiting time, is the impact of the endogeneity of labour supply in the platform business model on the realized earnings of gig workers—and this is another gaping hole in this so-called ‘minimium wage’ law. Companies like Uber depend on enough workers signing onto their app to keep a surplus pool of drivers available to quickly meet customer orders. It is to Uber’s benefit to have many workers waiting: it keeps response times lower and consumer satisfaction higher. And since the cost of that unpaid waiting time is borne by workers, Uber has no incentive to try to match labour supply with demand more efficiently. This is why this so-called ‘high-tech’ industry is one of the least productive industries in the whole economy: tens of thousands of workers spend millions of (unpaid) hours sitting around doing literally nothing.thousands of workers spend millions of (unpaid) hours sitting around doing literally nothing.
It sounds good. But it's just more Fordian Flim Flam.
Image: discogs.
4 comments:
And this is called “Democracy”? Anyong
That's the claim, Anyong.
Since its launch in 2009, Uber has never turned a net profit. Same with Lyft. So why do investors keep pouring money into them?
The idea is to capture market share through predatory pricing, run traditional cab companies out of business, then hike fares and cash in once a monopoly or quasi-monopoly is established. This is an idea as old as capitalism itself tarted up with fancy terms like e-commerce and gig economy.
The worst part is that our governments are complicit in the scam. While nominally charged with serving the public good and combating monopolies, our governments in fact do nothing of the sort. I would certainly never expect Ford to prioritize the interests of workers over those of their bosses. And so it goes.
Cap
Ford touts the idea that he's for the little man, Cap. His history suggests otherwise.
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