Races to the Bottom are Just That: Why Job Quality Matters

Are more jobs better than fewer good ones? Gabriel Conroy believes the answer to this is yes. So does much, if not the overwhelming majority, of the political establishment. The question is whether the majority of Americans (and people in the world) believe that is true or whether it is a decision that came to us from above.

John Angelos, the COO of the Orioles issued some populist statements about the riots and unrest in Baltimore yesterday. Angelos blames the riots partially (or largely on) “the past four-decade period during which an American political elite have shipped middle class and working class jobs away from Baltimore and cities and towns around the U.S. to third-world dictatorships like China and others, plunged tens of millions of good, hard-working Americans into economic devastation, and then followed that action around the nation by diminishing every American’s civil rights protections in order to control an unfairly impoverished population living under an ever-declining standard of living and suffering at the butt end of an ever-more militarized and aggressive surveillance state.”

There are lots of problems with this kind of populism especially because it is ideologically vague. You can easily imagine this sort of populism coming from the dreamed of Tea Party-Occupy alliances that pundits talk about from time to time. This ignores the fact that The Tea Party and Occupy generally disagreed on a lot of substantive issues and even if they agreed on the problem, they disagreed on the solution more often than not. This sort of populism is also often short on solutions that are feasible and it does potentially work on a large bit of magical thinking. How do you bring back the jobs that Mr. Angelos is talking about? Some or many of which might just be gone because of technological advancement.

There is something to the dearth of jobs though. SF Weekly brings us more tales of woe from the App Economy and beggars in the land of plenty. The article focuses on Postmates. Postmates is an App Company that will deliver everything from everywhere. You can have a Postmate pick-up a 1500 dollar suit from Barneys. You can also have them pick up and deliver a pizza or pint of ice cream from the place that is really delicious but very far from you. All of the Postmate couriers are independent contractors and responsible for their own expenses. According to the article 34 percent of American workers are now Freelancers.

The big issue with app employers like Uber, Lyft, and Postmates is that compensation structures and policies can and do change instantly. The change for Postmates was moving the check-out process to the Customers phones. Tip recommendations also changed from percentages to dollars amount which substantially lowered payouts for big delivery items. One Postmate courier estimate that the changes resulted in a 30-50 percent pay drop. The changes seem to have made the couriers more abstract. Such are the demands of Capital and Angel Investors.

One of the biggest criticisms of the app economy is that they don’t add value to the economy overall but merely exist to solve social problems and laziness issues among affluent people in cities and inner-ring suburbs. I am not completely sure this is true. There is certainly increased business from companies like Caviar that can turn former sit-down restaurants into take-out places. The question is how much of the benefit flows down to people who do the delivery work or who cook the food.

Right now the answer seems to be not that much. The App companies seem hellbent on keeping their delivery people as anonymous independent contractors instead of as employees that are part of a team and need to be given benefits like health insurance, gas money, and vacation. We seem to be strongly pushing forward on creating two economies. One with a few highly-trained and highly-paid employees who get good salaries and benefits and another where people are constantly bidding in a race to the bottom for jobs. This sort of stuff already seems to happen on some Apps.

Gabriel Conroy began his post on jobs with a poem by TS Eliot “The lot of man is ceaseless labour/Or ceaseless idleness, which is harder still/Or irregular labour, which is not pleasant.” I think the big issue and problem in the American economy is that we are entering a phase where labour is both ceaseless and irregular. The mission of Tech 2.0 is seemingly to turn every task possible into one of contingent labour as a way of saving costs but maximizing profits. They are potentially finding ways of doing this with highly-educated workers as well. The problem is that most Americans do not live in areas where you can survive on irregular labour and our metro areas will collapse if the service workers can’t afford to live there. The ceaseless part is because many people seemingly are connected to numerous app economies to make ends meet. You can’t live by one.

Most people do not thrive on anarchy and I see very little reason why we should be ruled by those who can thrive on chaos and anarchy or as tech prefers to call it “disruption.” I find it perplexing that business and economics are obsessed with finding more and more ways of cutting costs and treating employees (that is fellow humans) as liabilities instead assets. We are all consumers but I am not sure why the “low wage, low price” paradigm is the ethically and morally correct one. Real Estate and Rent does not seem to go through drastic reductions until things get really bad. Maybe someone can still afford a cheap flatscreen TV on irregular labour but the landlord wants to be paid monthly and the landlords aren’t yet lowering the price of their properties because of changes to the economy from regular to irregular labour and from being an employee to being an independent contractor. The psychological toll from irregular labour seems to be daunting.

This is why the quality of a job description and what comes with it matters. The tech companies are still looking for ways to attract capital and the easiest ways to do so is seemingly by increasing profit by labeling the bulk of the company as “independent contractors” and making them pay the big costs. You will notice that is never the finance people or computer programmers or marketers who get labeled as independent contractors. Uber and Postmates would not exist without their drivers and delivery people yet these people are treated with the least respect and dignity. We have no evidence that more bad jobs leads to people sustaining themselves or to getting good jobs down the road or even that good jobs will be created from the existence of bad jobs.

What are the solutions? People still talk about Guaranteed Basic Income but that idea is radical and probably more of a pipe-dream than a reality. The idea does attract attention from liberals, neo-liberals, and libertarians but no one has quite figured out how to get more people attracted to the idea beyond the Blog and Think Tank Spheres. People seem to think GBI is something that will just happen overnight. I find this too optimistic and wishful. The best solution is probably to realize that economics is not religious dogma and there might be other values than driving prices for stuff down, down, down and recognizing the prices for the essentials of life like shelter, food, and healthcare are rarely going to go down. There is nothing wrong with stability as a policy goal. 71 years ago FDR laid out his plan for a Second Bill of Rights including promises of employment and a living wage. This should not be hard for the United States to accomplish. The solution to the inequalities of Capitalism is not going to be more Capitalism.