The future of work: share out the benefits
California is one of the few economies large enough to set the rules in a globalised world. The state’s initiatives on car safety and emissions have in the past set an example that was followed by car manufacturers everywhere. In a less beneficial way, California was also the birthplace of the gig economy, and the widespread use of webs of casual labour tied together by algorithms to subvert labour laws and other regulations in all sorts of fields, ranging from taxi firms to B&Bs. So it’s an important development that the state’s senate has now turned decisively against the exploitation of casual workers. This week it passed a law that would reclassify many of the so-called independent contractors who work in the gig economy as employees, entitled to a minimum wage, paid parental leave and unemployment insurance.
The ride-sharing companies Uber and Lyft have reacted with a mixture of defiance and obfuscation, which makes it clear just how central it is to their business model to deny workers these benefits. Both claim they are happy to give their workers benefits, so that the law is not really needed, but that it is at the same time a terrible threat to their businesses – neither of which has ever made a profit, despite their astronomical valuations. Uber has said the law will have no effect on it when it comes into operation. The two companies, along with a food delivery business, have also pledged $90m towards a referendum campaign aimed at repealing the measure. This has the potential to be one of those struggles that determines how and for whose benefit the third industrial revolution will continue.
When economists think about technology, they don’t just ask what it makes possible but what will be profitable to do with it. This is a more helpful way to look at the future than it would be simply to imagine the outcomes if people used new inventions only for good. There is a long history of self-delusion, not least by those who profit from new inventions, which goes back at least as far as Alfred Nobel, who convinced himself that his invention of dynamite would make war less likely. Then there are the prophets of fully-automated luxury capitalism. The economist Roger Bootle has just published a book in which he predicts, as many have done before him, that the rise of artificial intelligence technologies will lead both to the creation of new jobs to replace some of those which it will undoubtedly destroy, and that these jobs will be better, or less time consuming, than those we have at present. This is not entirely impossible. There is no call for absolute pessimism. But the rise of the gig economy companies shows that the future of work that economists and others have worried about has already arrived, and it is not what the optimists promised.
We were promised that robots would take away much of the drudge work in which people are presently employed, and that artificial intelligence would solve problems that mere humans cannot. Yet there are many problems that AI cannot even simulate understanding, and many things that robots cannot manipulate with the subtlety and dexterity of human fingers. Although some futurists talk about the possibilities of embedding silicon ships into human bodies to enhance their capabilities, what has actually happened is almost the opposite. Human bodies have been embedded into algorithmically controlled enterprises. The drivers for Uber and Lyft, the food delivery cyclists of Deliveroo and the warehouse workers of Amazon are all controlled by software, which makes the work longer and harder than any unaided human overseer could. This did not have to happen. Nor was it entirely the fault of greedy capitalists: everyone who takes advantage of these services is also taking advantage of their workers.
The Californian laws – and similar attempts to rein in the gig economy companies in this country, driven mostly by the unions, and especially the GMB – show that none of these developments were inevitable. And none are irresistible, either. It is half true that these companies are, as their boosters boast, disruptive, but they also reinforce age-old tendencies towards exploitation and inequality. It is up to us as citizens and legislators to disrupt this great disruption and make it work for everyone.