Category Archives: The Working Class and the Economy

Putnam’s Poignant Folly: Empathetic Blaming

Robert Putnam graduated from high school in 1959 in the small Lake Erie town of Port Clinton, Ohio, and for his widely-praised book Our Kids: The American Dream in Crisis he revisits some members of his high school class to illustrate what life was like for those who grew up and started careers and families in the years 1945 to 1975 – what Putnam calls the “postwar boom” and in France is known more spectacularly as “the Glorious 30.” He very poignantly contrasts those glory years with grim portraits of life in Port Clinton today. What was once a supportive small-town warmth where standards of living were improving and opportunities were expanding for almost everybody has become a town divided between gated communities in a narrow strip along the lake and an excluded and much larger working-class community that ranges from destitution to quiet desperation.

I grew up during the same period as Putnam in a similar, if much larger, town that has experienced pretty much the same fate, though rather worse and without a lake from which to be excluded. It’s hard for folks of my generation to avoid experiencing what some contemptuously call “smokestack nostalgia,” as if what we are nostalgic for is the smokestacks and the “solid particulate matter” they emitted onto our homes, cars, and bodies.

More than a little nostalgia is justified, however, for those three decades if you focus on the right things, which Putnam usually does not. When Putnam graduated from high school in 1959, for example, real median family incomes in the U.S. had increased by more than 40% in the previous ten years and would increase by another 40% in the next ten years. Poverty was decreasing from 32% of the population in 1949 to 11% by the end of the Glorious 30 in the early 1970s. Real wages for production and nonsupervisory workers nearly doubled during the period, and the income gap between black and white families narrowed by 10 percentage points.

In contrast, by all these measures nothing has substantially improved since 1975, and much has gotten worse, much worse. “Back in the day,” for example, the top 10% got only about 1/3rd of all income, but they get one-half now, and the famous 1% got about 10% of income then, while today their share is 22%. Income taxes were steeply progressive (with top marginal rates ranging from 70% to 90% through the 1970s), and because unions were strong, the benefits of productivity growth were shared with workers, sharing that ended in the mid-1970s.

Putnam is aware of most of these numbers, and of their impact on people’s lives, as he details the disastrous decline in “upward mobility” that has put “the American Dream in crisis.” He is also aware that there are two kinds of upward mobility – the “rags-to-riches” kind that he calls relative upward mobility and the “rising-tide-lifts-all-boats” kind that he calls absolute upward mobility. Both kinds are desirable and both are declining. Putnam’s folly is to focus exclusively on relative upward mobility, which leads him into discussions of working-class family forms and parenting styles as root causes of the crisis in the American Dream.

Relative upward mobility occurs when over a lifetime some people move up from a lower to a higher income class – usually measured in quintiles; because there are always five quintiles by definition, in order for some to move up, others must move down. Relative mobility is about “careers open to talent” and equal opportunities for everybody to get to the top. It is key if you want to have a meritocracy. Absolute upward mobility, on the other hand, occurs when real incomes and standards of living increase across the board for everybody (or almost everybody).

Think of the common phrase “getting ahead.” It can mean getting ahead of others (relative upward mobility) or it can mean getting ahead of where you were before regardless of whether you passed anybody in the process (absolute upward mobility). Putnam’s exclusive focus on the former leads him astray because, as he more or less inadvertently shows, absolute upward mobility is very probably a necessary condition for increasing relative upward mobility – as that’s what happened during the Glorious 30 and is not happening any longer.

By contrasting well-crafted and moving portraits of upper-middle-class and poor working-class families in Oregon, Georgia, California, and Pennsylvania, as well as in his native Ohio, Putnam is able to show the overwhelming range of disadvantages children in these poor families face.   And he is able to make a strong case for the need for public institutions (especially schools) to provide “compensatory funding” to improve these children’s chances of getting ahead. But in doing so, he not only gives up on the working-class adults he portrays (most of them in mid-life), he gently and empathetically blames them for their children’s fate.

If they would just get married before they have children, stay married, and then raise their children with the “concerted cultivation” approach middle-class parents use, they could improve their children’s chances of success. There may be a case to be made for this point of view, but Putnam undermines it by getting carried away with his middle-class paternalism, suggesting at various points that hugging their children more, having dinner together, and using time-outs instead of spanking would help to equalize poor and working-class kids’ opportunities.

By focusing on equalizing opportunities without equalizing incomes, Putnam hopes to improve poor and working-class kids’ chances of succeeding in our “knowledge economy” – which for Putnam means getting a college education and a job that requires that education. Problem is he seems to have no idea that when today’s 12-year-olds graduate from college, only 1 out of 4 jobs at best will require a bachelor’s degree. What about the other 75% who do work that needs to be done but who are paid increasingly low wages and whose jobs are more and more precarious in every way you can think of? Putnam gives them an empathetic literary hug, but otherwise is silent.

Putnam’s folly is to think that we can achieve greater equality of opportunity without addressing our runaway inequality of income and wealth – that is, without drastically reforming our tax system so that investors are no longer privileged over people who work for a living, and without dramatically raising wages, especially at the lower end, regardless of how much education workers have and whether they are good, bad or mediocre parents.

Jack Metzgar

Chicago Working-Class Studies

Taskers in the Precariat: Part 2 – Essential Reforms

In “Taskers: The Precariat in the On-Demand Economy: Part 1,” I defined three types of taskers — on-demand, crowd labour, and zero hours employees – and highlighted the problems associated with these new forms of work: insecurity, low and fluctuating incomes, chronic uncertainty, lack of control over time, and the dismantling of occupational communities. I now want to propose policies that could improve taskers’ economic status and work conditions.

The on-demand economy and the precariat are here to stay, and we must fight for new forms of regulation, redistribution, and social protection to redress growing inequities. Real wages for the precariat – including taskers and others — will continue to stagnate. Income redistribution will have to come by other means. Forging a new system will not be easy, but is vital. As even intelligent conservative economic interests recognise, growing inequality threatens economic, social, and political stability.

However, the specifics of tasking also demand remedial policies. Let us start by considering policies for society, then policies directed at labour brokers, and then policies for protecting and enhancing the position of taskers themselves.

At society level, we should stop trying to compress taskers into the category of employee. Labour statistics define workers as either “employees” or “self-employed.” Neither of these terms, nor “freelancers”, is appropriate for describing the status of most people doing tasking, since they lack freedoms associated with being an independent seller of services, and they not employees in the old sense of mutuality of obligations. We should designate “tasker” as a separate category.

In the US, several class action cases are being heard to determine whether taskers in certain sectors should be classified as employees. While we might debate the specific conditions under which taskers could be identified as employees, we would do better to overhaul old labourist rules that privilege employees. It would be better if legislation dealt with the issues more generically. And in any case, why should only “employees” be covered by the protections built up in the 20th century? All forms of work should have the same rights and entitlements. The term ‘labour rights’ is a contradiction, since it is people who have rights, and these should apply to everybody, regardless of their specific labour or work status.

The emergence of taskers has intensified the frictions and divergent interests of different groups of worker. Anybody who thinks there is a unified working class in current circumstances is hallucinating. This is why we need a new system of collaborative bargaining between complementary and substituting occupational groups. The collective bargaining capacities of taskers must also be strengthened. On the one side are employers and labour brokers; on the other are employees, taskers, and freelancers.

Another social concern arises from the fact that the labour brokers are rentiers, earning vast amounts for doing very little if we accept their claim that all they do is provide technology to put clients in touch with ‘independent contractors’ of services. Thus, Uber and its rival Lyft say they are technology, not transport, companies.

By treating taskers as ‘independent contractors’, brokers avoid paying contributions that would entitle taskers to state benefits, and they avoid paying non-wage benefits that employees should receive. In return for their intermediary role, brokers typically take 20% of earnings. But they are free-riding on the public, since if taskers fall on hard times, they will need benefits from the state. Normal employers have to make a contribution to pay for benefits; brokers currently avoid doing so.

Accordingly, the authorities should establish a tasker levy (tax) of, say, 20% of labour brokers’ earnings or for each tasker they contract. Similarly, if they require taskers to use their own equipment, such as a car or machine tools, brokers should pay part of insurance costs. If this is meant to be a “sharing economy”, as its apostles claim, then costs as well as benefits should be shared.

As for the brokers, if we accept that they represent an emerging ‘profession’, they should be pushed to establish stronger professional associations whose members develop and subscribe to formal Codes of Ethics. All brokers should be registered and required to join an association that could monitor conduct of members.

As for the taskers, occupational licensing must be rolled back. Licensing is the form of state regulation promoted in the neo-liberal era in place of guild regulation. In the US, over 1,000 occupations are now subject to licensing, mostly unnecessarily. Licensing often operates as a barrier to the right to practise. The insurance industry and commercial interests dominate licensing, transferring risks, uncertainty, and costs onto workers, and often enabling licensing boards to block or punish someone without due process. Labour brokers and the precariat in general should be united in wishing to see less licensing.

Licensing should be limited to occupations that involve real dangers, as in the case of surgeons, architects, and builders. Otherwise, occupational self-regulation should be revived. And there should be more reliance on accreditation, that is, membership in an association that testifies to competence or experience. For all professions, an international accreditation system should be constructed, with standardised rules. This would allow anybody to practise a particular form of work, but it would ensure that they were competent and met set standards. For example, Uber drivers should be required to display signs indicating whether they are licensed, accredited to a drivers’ association, or neither. They should also be required to show they are insured. Failure to inform a client in advance should be sanctionable.

On wages and prices, in the case of crowd labour, all taskers involved in Dutch auctions should have the right to know what rates are paid to successful bidders and what conditions have been applied. Those on zero-hours contracts should be compensated for inconvenience and insecurity based on hours. Such “stand-by bonuses” are required in Germany and could be set as a base salary. They should also be allowed to do other work without exclusivity clauses in their contracts. Both zero-hours employees and crowd-labour taskers should have the right to decline on-demand tasks without loss of pay or opportunity unless given at least 24 hours’ notice, so that they can gain more control of their lives.

All forms of on-demand labour should involve written contracts (signed and scanned), drawn up and agreed before tasks are allocated or performed, with at least one witness to each party in broker-tasker agreements. Taskers should also be compensated if the broker obliges them to undergo more than one round of consideration before a decision is made to contract them.

Taskers must have a right to know what information brokers share about them and to have false information withdrawn from electronic circulation. To protect taskers, no company should be allowed to inform other firms that a tasker has brought a complaint or sued for compensation, unless a conviction for fraud by the tasker has been obtained. In other words, blacklisting must be banned.

Similarly, customer rating of individual taskers should be curbed. Some brokers dismiss taskers if they receive several poor ratings (made feasible by the app). That might sound reasonable, but it could lead to crude discriminatory practices, and it lacks due process. Prejudiced customers could use the app to grade taskers from ethnic minorites negatively solely because they do not like such people. There should, at least, be demonstrable evidence and opportunities for taskers to defend themselves before actions are taken.

One exploitative aspect of crowd labour requires a special response. Some corporations, such as the Los Angeles-based Business Talent Group, Fox Mobile Entertainers, and Tongal, pay modest prizes to taskers who submit commercially viable ideas. The firms buy ideas at a fraction of their commercial value, since they can patent them, creating a monopoly income stream lasting for twenty years. This is one of the most exploitative tricks in labour history. Regulations should stipulate that taskers should receive at least 50% of the income stream of any of their ideas that is patented.

Finally, taskers should have a right to publicly-funded legal advice, subsidised by contributions from labour broker corporations. Taskers should be required to make a partial payment, to discourage frivolous actions. But having access to legal advice would encourage both sides to make agreements transparent and standardised as much as possible.

Achieving these reforms will require social struggle by and for the precariat. We must realise that the precariat’s vulnerability today is a threat to all of us tomorrow. When sweating spreads to taskers, the threat to wages and working conditions for those outside the precariat grows. We must wake up to that threat.

Guy Standing

Guy Standing is a Professor of Economics, SOAS, University of London.

The Fissured (Working-Class) Workplace

One of my favourite exercises when teaching the sociology of work is to ask my students about the concept of a ‘job for life’. I started doing this a decade and a half ago at the beginning of my lecturing career. I asked the eighty odd twenty-somethings in the class in front of me ‘who’s heard of the phrase “a job for life” ’? When I first did this, maybe half the hands went up. I then asked, ‘Who here expects one’? That first time, and in subsequent trials, no hand went up. One guy did shout out, ‘But who would want one’? Over the years I’ve often tried this experiment with different classes, even asking it during open-day presentations for prospective students where the presence of their parents give an intergenerational frisson and a knowing look from the greyer heads in the audience. The receding knowledge of the term and the expectations that went with it speaks volumes about what has happened to our contemporary ideas about work.

I was thinking about that experience reading David Weil’s book The Fissured Workplace, a thoughtful and thought provoking reflection on the contemporary US workplace. By ‘fissured’ Weil means the wide range of ways in which work has been desiccated. Where traditional work was stable and intelligible, increasingly one is never sure who is responsible for the product supplied or service purchased. Weil outlines a number of types of fissuring, from subcontracting to outsourcing to franchising. Weil persuasively groups together a range of diverse strategies through which ownership and control are exercised through layer upon layer of intermediaries. The book offers a litany of corporate attempts to squeeze more profit from the bottom-line by laying-off risk and responsibility, citing examples from industries as diverse as cell phones, hotels, and coalmining. Fissuring is about saving money and restricting liability, ideally removing it all together.

Many of the instances of fissuring that Weil gives are not new for working-class people. Many working-class and trade union struggles have been over the attempt to secure at least some kind of work stability. The interesting thing about Weil’s metaphor is that it transcends blue-collar work, where poor conditions are more common, and increasingly affects traditionally middle-class white-collar environments such as journalism and publishing. This idea of fissuring adds to the emerging lexicon describing the contemporary and potential future nature of work. Like the idea of precarity that Guy Standing has talked about, fissuring makes sense of the common features and patterns that cross industries, sectors, and whole labour markets. The concept describes the splitting apart and the simultaneous corrosion or erosion of workplace sociability and culture. Fissuring gets to the heart of how contemporary work offers workers, their families, and whole communities even less of the limited stability that they enjoyed in the past.

For working-class people on both sides of the Atlantic, the ability to access good work is important for a number of obvious and perhaps less obvious reasons. Ask anyone why they work, and as like as not they will say ‘money’ and give you a look as if to say ‘are you crazy’? But dig deeper and it becomes apparent that while the cash is vital, so too are a whole range of other features of work that Studs Terkel described as things that ‘make the day go faster’. To some extent, all work socialises us, and that, in turn, allows us to play our part in socialising others. When I interview workers, the older ones especially, they often reflect on the significant people who have marked out times of transitions in their life — the most obvious moment being the initial move from school or college to their first place of employment. It often takes a whole lifetime of work before the subtlety of what they enjoyed becomes apparent to them, the way people and places helped to shape them as humans. It is only in the reminiscence that they see the value of workplace culture, even though their younger self may have ignored or hated the experience at the time. In various ways it moulded them, and they in turn help to cultivate and mature others. I am not saying that all work in the past was great, nor that ‘good work’ was accessed by all. Rather, I think a critical mass of working-class people experienced a level of stability that made a difference to their lives inside and outside the workplace. I’d go further and say that critical mass made a difference to the quality of work elsewhere, too. It afforded some working-class people the space to think and grow through employment.

When I read the David Weil’s book, I thought of the effect this fissuring has on working-class employment. The patterns of workplace culture have been undermined and changed hugely over the last three decades, but the shifts explored in The Fissured Workplace add a new and urgent dimension. What Weil describes is nothing less than the breaking down of any sort of medium or long term stability for workers. In the fissured workplace, relationships are contractual rather than social. The ability of people to join together, to socialise and be socialised, becomes increasingly limited.

For the young people I teach, The Fissured Workplace probably reads like a description of their experience of the world of work rather than as a critical analysis. We should not to romanticise the work of the past, indulge in ‘smokestack nostalgia’, but equally we need to acknowledge a world we may be losing. While the ‘job for life’ may have been a fleeting experience for a few, the social patterns that that stability engendered were profound for generations of workers and can still be seen working their way through the contemporary workplace. As for my student’s question about who would want a job for life, I would probably answer now that many working-class people would at least like the option of one.

Tim Strangleman

Getting By: The Fight for Community

Over the years, I have been involved in many community projects and campaigns, but not since the 1980s have I experienced the militancy and anxiety among working-class people that I see today. At first glance, you may miss it, or misinterpret their anger and rising class-consciousness as the way members of an underclass exclude themselves from British society. But these are the simplistic, stigmatizing, and cruel critiques that the mainstream media, and mainstream politicians, choose to deliver about the poorest members of our society.

In Getting By, my book about the council estate in Nottingham where I lived and raised my family for more than 20 years, I map my life from very poor housing close to the mines where my family worked, to the city centre of Nottingham, where I lived in public housing as a single mother with my mixed-race son, to finding myself at the University of Nottingham as a thirty-something working-class, mature student. I spent eight years researching the neighborhood where I lived for 25 years and writing about the consequences of de-valuing people and communities. I map how working-class people in the United Kingdom have become de-valued by successive governments and policies in the last thirty years. I show and explain how people who live in social housing have become problematized in the public psyche, stigmatized, and reduced to figures of ridicule, and hate. In particular I examine what it means to be a working-class woman, and how you learn at a very young age that shame will be part of your life – and that your respectability has to be sacrificed in order to ‘get by.’ The book is set within one neighborhood within the United Kingdom, although stigmatization and the de-valuing of working-class people is embedded throughout the country. For the last 18 months, I have lived in east London, continuing my academic research and also becoming involved in campaigns in London, where the de-valuing process of working-class people is stark, particularly around issues of housing. Rents within the capital are so high it is becoming impossible for poor families to stay in London.

unnamedWe can see one vivid example in the Focus E15 mothers, a group of young women with small children who, in 2013, were forcibly evicted from a homeless hostel that sits in the shadow of the billion pound developments of the Olympic Park and the Westfield Shopping Centre. Their evictions were treated with a complete lack of empathy for their welfare by the local authority and Mayor (both Labour Party). They were told that the only social housing available was in other cities around the UK where they have no connections or family — a crude form of class cleansing.

The Focus E15 mothers have gone on to support other families being made homeless in their neighborhood, leading to the group being labelled ‘agitators’ and ‘band wagon jumpers.’ This is what happens when powerless and de-valued women fight back — refuse to ‘know their place’ — without deference to an organized top-down political party.

Meanwhile, multi-million pound housing developments in London are segregating less well-off tenants from wealthy home-buyers by forcing them to use separate entrances. A Guardian newspaper investigation discovered that in upmarket apartment blocks, which are required to include affordable homes in order to win planning permission, poorer residents are increasingly being forced to use alternative access, which some have dubbed “poor doors.” Even bicycle storage spaces, rubbish disposal facilities, and postal deliveries are being separated to avoid class mixing. When I first read about one of these buildings, ‘One Commercial Street,’ I immediately knew that this was wrong. I didn’t need to consider whether de-valuing a person and making them walk round the back was better than providing no home at all, an argument levelled at those of us who spent 20 weeks protesting outside this symbolic monument to capitalism. But this sort of social Apartheid is wrong and needs to be called out for what it is.

It seems that social cleansing, social apartheid, and social inequality have been accepted as ‘common sense’ by the political elites, whether that means social cleansing the poor out of London altogether, providing different entrances to buildings to ensure that the rich don’t need to meet the poor, or de-humanizing people through ridiculing the places where they live, their culture, and their lives.

Perhaps ironically, this kind of hard-line neo-liberal thinking can generate class consciousness born out of a sense of unfairness . Grass-roots activism is thriving among groups united in their experience of being treated harshly and having very little or no power. They are fighting for their lives and the futures of their children as we fought in 1984 against pit closures. Many think the fight in 1984/5 was about coal and the closure of mines, and to some extent it was. In truth, our struggle as a striking family was much greater than coal and mines. It was about safeguarding our community, our way of life, and our culture — everything that made us proud working-class men, women, and children. We lost that fight, the mines were closed, 193,000 miners lost their livelihoods, and thousands more local jobs connected to the industry also disappeared. We lost our communities, we lost our families as each generation had to move out of the mining towns to find work elsewhere, and we lost our collective politics and our strong proud culture. This is what happens when thriving and tight knit communities are destroyed and de-valued.

The fight in London is also about saving working-class communities, and this fight has become especially apparent among mothers in the UK who were not politically active, perhaps, until they faced eviction, like the Focus E15 women. Recently, I have met women with their children on protests who have never been involved in politics before, who are now organizing solely by their class and their experiences.

Getting By shows how important community, family, and neighborhood still are to working-class people. Although there is an absence- a void left by professional politicians in how working class people ‘do politics,’ the book shows that there is a collective and a political identity emerging out of the concept of ‘belonging and community’. I feel confident that energy and class consciousness are rising among people who even a year ago had little interest in politics. Working-class people are becoming angry at the levels of inequality they see and the unfairness and injustice they are experiencing. I am hopeful because the discontent and change in working-class politics are coming from the grass roots, from mothers with babies on their hips, connected to no organized political party, shouting ‘shame on you’ at the police protecting the buildings and the power of the elites. The energy and the fight-back in the capital has both overwhelmed and inspired me to the point where even I — a very cynical working-class academic — believe that change is not only coming, but is happening.

Lisa Mckenzie

Lisa Mckenzie is a research fellow in the Department of Sociology at the London School of Economics and Political Science, working on issues of social inequality and class stratification through ethnographic research.

 

Taskers: The Precariat in the On-Demand Economy (Part One)

Revolutionary changes are taking place in the global labor process, creating new labor relations while expanding the ranks of the precariat. Informed observers predict that within the next decade, one in every three labor transactions will be done online as part of the “on-demand,” “sharing,” “gig,” or “crowd labor” economy.

New words are creating a new vocabulary of work and labor, often meaning something quite different from what they might imply. As I have explained elsewhere, whereas labour has exchange value and is usually remunerated, work consists of many activities that are productive or reproductive that mostly have use value, although many are done out of necessity because we are obliged to do them. We will overcome the confusion, but it may take time.

Essentially, the emerging labor process revolves around three entities: (1) Rentier corporations (labor brokers), which control the technological apparatus, the apps; (2) Labor “requesters”, the middlemen; and (3) Taskers, those who do the jobs. The apps and smartphones are the equivalent of the old labor hall, without the bustle that at least indicated the bargaining position of brokers and laborers. Taskers are basically piece-rate workers, but they should be distinguished both from employees, who are covered by labor law and collective bargaining, and the self-employed. Taskers come in three forms, each posing challenges to those concerned with the world of work.

First, in the on-demand – or, more cruelly, ‘concierge’ – economy, labor-broking corporations are bypassing old forms of market transaction, connecting final customers with taskers who supply services, such as taxi driving, bed-sharing, food delivery, shopping, legal advice, or medical care. These service providers (or errand boys or “task-rabbits”) should be distinguished from workers, since the broker treats them as self-employed, thereby excluding them from entitlements or protections that the state supposedly grants employees.

On-demand taskers must be available at most times of day and night or risk losing income or future opportunities. Unlike the classic proletarian employee, they own the means of production, in the form of a car, apartment, bicycle, machine tools, or whatever. And they do not have fixed or even known hours of labor. They must do a lot of work-for-labor, work neither compensated nor even recognized as work. They must wait around, unable to devote themselves to other activities in case the iPhone calls them to do a task.

On-demand taskers are usually isolated, without bargaining power. They are in a buyer’s market, having to accept a price set by the buyer. While many may feel “grateful” for the opportunity to earn a little, they must bear all the risks – accidents, ill-health from stress, loss of friendships, non-payment, repairs to vehicles or tools, replacement of stained carpets, health insurance, and so on. They face constant uncertainty — of income, tasks, costs, and personal comforts. And they are in constant competition with other unknown taskers.

A second type of tasker is part of the crowd-labor pool, an expanding phenomenon already involving over 12 million people, a third in the USA. Here, labor intermediaries are pivotal. Direct producers contract with a brokering corporation, such as Amazon Turk, ODesk, or eLance, which in turn utilize requesters to sub-contract tasks to successful bidders — taskers — from a potentially global crowd-labor pool. This involves a Dutch auction, in which requesters announce on line that so many such-and-such tasks are up for bid, to be completed within a stipulated period, and that bidding will close within, say, five days. Often the requester announces at the outset a maximum price or piece-rate, and taskers then bid each other down. Taskers can bid to undertake as many tasks as they think feasible at a price they think is right for them. At the end, requesters select from the lowest bids. So, somebody in Boston can be bidding against someone from Bangalore, Dakar, or Manchester. This is invidious, because the most insecure will tend to bid the lowest.

Because crowd-labor taskers do not know how many people are bidding or where they are, they may easily believe competition is more intense than it is. For the broker, that is ideal. But tasks may turn out to be more complex or time-consuming than taskers had been led to believe, resulting in even more self-exploitation. Many worry about their ability to finish tasks on time or satisfy the quality demanded, especially when they have no means of seeing what others are achieving. And in practice they have no means of redress should the broker decide not to pay or to delay payment on some pretext.

The larger the global crowd-labor pool, the easier it will be for brokers to impose demands and penalties on individual taskers. For instance, if a requester in New York unilaterally decides that a tasker in Dakar did not do something well enough and refuses to pay, the solitary tasker probably will not be able, or be confident enough, to try to recover her money. The scope for scams is enormous.

A third type of tasker is someone hired as a nominal full-time employee but who is on a zero-hours contract. This growing ruse involves paying only for the hours they are actually required to labor. They must be on stand-by at all times and travel to and from workplaces without compensation, often not knowing if they will get work or for how long. Over 1.4 million people in the UK are on such contracts.

All these taskers face insecurity, low and fluctuating incomes, chronic uncertainty, and lack of control over time. They have no fixed hours or workplaces. Unlike workers in the industrial time regime, where life could be measured in blocks of time, they live in a tertiary time regime, in which labor and work blur into each other, without payment for downtime, waiting, retraining, networking, and so on. They have illusion of freedom while also feeling that they are under incessant control. This is debilitating, with psychological consequences that we have only begun to explore.

The process depresses wage rates, whether taskers are paid on a piece-rate or time-rate basis. The decline is greater than is measured, since much of the tasker’s work is unrecorded, including time for rest, preparing, and waiting. The process also increases the precariat’s volatility of earnings, leaving them without non-wage or state benefits.

Driving down wages in general creates even more profits for the broker corporations. In this respect, Uber has set the bar for ruthless opportunism, and in spite of protests by licensed taxi drivers, it is operating in over 200 cities in 51 countries. It is decimating the ranks of licensed taxis, and depressing the earnings of taxi drivers. Critics fear that once Uber has succeeded in marginalizing taxis, it will raise its rates, especially in surge periods.

The process also accentuates the dismantling of occupational communities. Occupational guilds defined working life for hundreds of years, setting standards, codes of ethics, means of training, and sources of social protection. They stood against the market. The neo-liberal agenda hinges on dismantling them, and the on-demand economy is both a consequence and an accelerator of that. The costs include loss of occupational ethics and routes of social mobility through professions and crafts

The on-demand economy also reverses a capitalist mantra. Instead of capitalists, or firms, owning the means of production, they are ‘owned’ by the precariat. The former maximize profits through patents and other forms of intellectual property. They draw investment from venture capital, which thrives on short-lived, high rates of profit.

The precariat in this zone is isolated, in permanent competition with each other. The atomization drives down wages and transfers risks, hazards, shocks, and uncertainty onto the precariat. Taskers have minimal means or opportunities to coalesce.

Dangers for taskers include under-insurance, due partly to the difficulty of working out the risks with any insurer, especially where the potential insurer could not presume that the supplier would be properly qualified or be able to take due care.

The “sharing economy” has a cultural dimension, as well. When someone “shares” for money a car, apartment, or utensils, they convert zones of privacy and use value into alienated commodities with exchange value. It is an instance of the “Lauderdale Paradox,” in which the act of commodification is one of privatization that contrives scarcity of space or time.

These forms of labor intensify the pressure to commodify one’s life. It is a sad way for the precariat to respond to adversity, intensifying self-exploitation. It is how those experiencing declining wages and living standards cover up the decline, for a while.

In the upcoming weeks in Working-Class Perspectives, I will consider what can be done to improve the long-term income and economic security of taskers and the precariat.

Guy Standing

Guy Standing is a Professor of Economics, SOAS, University of London.

Crossroads: American Labor, the Freelancers Union, and Precarity

Several weeks ago, I attended the “The American Labor at a Crossroads: New Thinking, New Organizing, New Strategies” Conference in Washington, DC, sponsored by The American Prospect, the Sidney Hillman Foundation, and the Albert Shanker Institute. It was nice to see many old friends with whom I had worked as a Labor Studies Professor for 35 years. It was especially nice see David Moberg, labor journalist at In These Times.

We recalled the many “Labor at the Crossroads” conferences we had attended beginning with the crisis in the steel industry and the beginnings of deindustrialization in the 1970s. Most of these conferences accomplished little and had minimal impact on union leaders who rarely attended and were sometimes overwhelmed by the pace of change and the forces arrayed against them. But the program for last week’s conference looked different, and the conference ultimately felt different. As I said to the organizers, the panels and discussions were unusually frank, and some of the best were led by young people, women, and people of color.

Some both within and outside of the American labor movement have pronounced its impending death. But as Lance Compa has pointed out, plenty of successful union organizing is happening in traditional, largely stable industries and companies in manufacturing, transportation, communication, health care, food processing, and the public sector. Further, unions are a potent political force in advancing labor and civil rights in coastal and Midwest battleground states where urban density is the greatest. They have been powerful advocates for minimum wage increases and the expansion of health care for all working people. Taken together, Compa estimated that about 20% of all workers who are able to organize under US labor law are organized. The struggle for labor movement lies with the other 80%, especially those with those who experience unstable wages and working conditions and even those who embrace intermittent employment.

In the past, unions largely ignored these workers, finding them difficult to organize under current labor law and union strategies. But these workers have begun to organize themselves, in some cases with union backing. At the conference, we heard speakers from National Guest Workers Alliance, the Texas Workers Defense Project, the fast food worker campaign, and many “alt-union” organizing efforts involving day laborers, adjunct faculty, domestic workers, home healthcare workers, and regional and national worker centers.

One the most important speakers was Sara Horowitz, executive director of the Freelancers Union. The Freelancers Union (FU) wants to organize the 53 million self-employed workers, a growing portion of the labor market as the structure of work is changing. FU researchers found that 40% of these workers were true independent contractors, while another 23% were moonlighters trying to make ends meet. Put differently, the self-employed sector is diverse, ranging from members of the professional managerial class (salariat) to the working classes, and all experience some degree of casualization and/or precarity.

Horowitz believes the labor movement must recognize that both work and individuals are changing in cultural and economic ways. Some people, she argues, embrace flexibility and reject traditional work organizations and consumption patterns. They do not accept the work-spend cycle and are comfortable living with less. Instead of aspiring to home or car ownership, they prefer to rent or share. They seek a fuller life away from work, based on communities, networks, and neighborhoods. Horowitz calls this Freelance 360,which embraces a “new mutualism” that includes building “smarter solutions to health care, retirement, wage security, and other broken systems.” The FU’s goal is to develop sustainable work communities, networks, and co-ops in the growing informal and unstable work environment through “a spirit of collaboration and mutual support” and “building meaningful connected lives and thriving local communities.” This vision of a sharing economy has attracted both interest and critique.

In the last 15 years, FU has organized various networking events as well as an on-line freelancers network to share information, ideas, and potential collaborations. Its website provides important information for freelancers on health-related issues and insurance, taxes, wage rates and fringe benefits, business models, and marketing strategies. Participants also share information on clients. The FU has also published a Freelancers Bible that provides career information and a clever YouTube video that explains what it is trying to accomplish and why.

Some mainstream unionists at the conference may have felt threatened by Horowitz’s remarks. I think this fear is misguided. The FU is not challenging traditional organizing at brick and mortar sites with fixed hours and working conditions. Rather, it is simply suggesting that traditional methods and issues are inappropriate when work has become more informal, flexible, and episodic. Given the history of the labor movement, the tension was not unexpected even at a conference built around experimentation in thinking, organizing, and strategies.

The shift in thinking that FU advocates suggests the value of a broader definition of “working class,” one that includes the precariat along with more traditional workers. Over the last few years on Working-Class Perspectives, Guy Standing, Tim Strangleman and I have considered the definitions, conditions, and issues associated with the growing precariat. In the coming months, we will continue to examine changes in work and the growth of the precariat. For example, Guy Standing will comment on how we might define workers and the labor process in the on-demand economy. Tim Strangleman will look at some corporate origins of the fissuring workplace that has become a source of precarity. Sherry Linkon will consider cultural representations of precarity.

We have not abandoned our focus on working-class life and culture. Rather, we recognize that a growing number people, including many who once saw themselves as part of a privileged middle class, are now experiencing working-class insecurity and have found that they are one job from poverty. And just as we have long argued for the value (and values) of working-class life and culture while also tracing its struggles, we need to examine both the opportunities and costs of the new economy, in individual and political terms.

John Russo

Class War in the Tax Code

I know that taxes are a really boring subject, as is talking about billions and trillions of dollars as if any of us could understand such magnitudes. But a one-sided class war is being fought every day in the U.S. tax code, and getting even a glimpse of the amounts of money involved can change our sense of why taxes matter. If the government would stop redistributing income through the tax code and instead tax investors the way it does workers, homeowners, and consumers, many things that we can’t afford today would be easily affordable.

California, for example, doesn’t have enough money to pay home care workers (who are basically state employees) both minimum wage and overtime – the state is short some $350 million. Those workers average about $17,000 a year, with lots of overtime that is paid at straight wages. In Chicago there’s not enough money to have guidance counselors and social workers in the schools where they are most needed or librarians to staff most of the libraries. The Chicago Teachers Union estimates that it would cost about $300 million to remedy these and other deficiencies, but doing so would have a big impact on educational results. In order to save the Detroit Institute of Arts’ collection from being sold to get Detroit out of bankruptcy, city workers with $19,000 annual pensions had to give up about $900 each while the state of Michigan found $200 million for a one-time contribution to the city’s pension fund.

These amounts seem very large from an individual perspective. Even the smallest, $200 million, is more than 100 times what an average professional worker earns in a lifetime. The cumulative total of $850 million could fund the payrolls of six top teams in the National Football League. But in the world’s largest economy, whose national government now spends about $4 trillion a year, these hundreds of millions of dollars are the equivalent of nickels and dimes.

I have chosen these state and local situations at random, but thousands of state and local governments are similarly “taxed out” politically, if not economically. States and municipalities compete with each other to keep taxes low in order to attract businesses that, they hope, will create more jobs; few of them are in a position to initiate new taxes on investors. The federal government, on the other hand, has lots of room to run in taxing the top income earners and wealth holders.   Local governments tax property wealth, which is widely distributed among the population, but nobody taxes financial wealth, which is greatly concentrated in the top 10% and 1%. Likewise, state and local governments are highly dependent on sales taxes for things like clothes and meals at Appleby’s, which nearly everybody buys, but there is no sales tax when you buy a stock or bond.

This is how class war is waged in the tax code. If financial wealth were taxed like property wealth, and if buying a stock or bond were taxed like buying a shirt or skirt, all underfunded public pensions could be funded; home care workers could make a living wage; we could have the kind of massive infrastructure program we need; veterans wouldn’t have to wait months to be seen by Veterans Administration doctors; and we could cut our debt and deficit at the same time as we cut other taxes. And if income made from investing rather than working were taxed at the same graduated rates as earned income, we could do even more. We could have smaller class sizes and more teachers. We could staff government agencies at levels that would enable them to actually fulfill their functions – including enforcing our labor laws. Add it all up, and millions more workers could have decent jobs.

So why do we tax income you work for at higher rates than income you don’t work for? Because investors are winning a class war that most workers don’t know is being fought. Why does it seem natural to tax real property (houses, buildings and land) but not financial property (cash, stocks and bonds)? Because investors long ago won a class war that home owners don’t realize was ever fought. And why are meals at Burger King taxed but not stocks and bonds? Because investors are winning a class war that consumers don’t know is being waged.

How much additional money would the government have if unearned income were taxed at the same rates as earned income, if financial wealth were taxed at the same rate as property wealth, and if a sales tax was levied when buying a corporate stock the way it is when buying a pair of shoes? I did a little research and found out that it’s quite a lot – at least $800 billion a year. While implementing an equitable system of federal taxation would involve many administrative, legal, and political difficulties, it could solve financial problems at the state and local as well as the federal levels. None of the difficulties is insurmountable, but first we need to simply ask why investors get discounts and free passes in the tax code. Maybe they really are more valuable and important than the rest of us. But let’s discuss that in public rather than simply assuming it in the tax code.

In the meantime it’s clear that if the government taxed investors like it taxes workers, home owners, and consumers, we’d have more than enough money to do all the things I list above. After all, providing what’s needed for home care workers in California, school children in Chicago, and pensioners and art museums in Detroit would only cost $850 million (with an “m”). We could raise nearly 1,000 times that much — at least $800 billion (with a “b”) — if the government would declare a cease fire in the class war and stop redistributing income.

Jack Metzgar
Chicago Working-Class Studies

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For those who want to check my homework, here’s how I arrived at these big numbers.

Unearned income (capital gains and dividends) is currently taxed at 20% regardless of income level. If it were taxed at the same graduated rates as earned income, United for a Fair Economy estimates it would produce $160 billion in additional federal revenue.

Local governments live off wealth taxes, but these are applied only to “real property” (houses, buildings and land) not to financial property (cash, stocks or bonds).   The average property tax rate is 1.38%. According to Dean Baker at the Center for Economic and Policy Research, the total value of outstanding U.S. corporate stocks in 2014 is about $28 trillion. Thus, a 1.38% “property” tax on stocks would produce $386 billion in new revenue. I could not find a number for the total value of bond holdings in the U.S., but a 1.38% tax on bond wealth would surely add enough for a financial property tax to produce at least $500 billion a year.

The Tax Foundation does not compute an average for “combined state & average local sales tax rates,” but among the 47 states that have a sales tax (3 states do not have any), almost all are above 6%. So using 6% as a sort-of-average sales tax and applying it to the $60 trillion in stock trades in 2013, it would produce an astounding $3.6 trillion – nearly enough to fund the entire U.S. Government. This would be wildly unrealistic, as it would wreck the stock market and kill investment, but it gives you a notion of how lucrative even a very small sales tax on stock transactions could be. HR 1000, introduced by Rep. John Conyers, would impose a sales tax of 0.25% on stock trades (that’s a tax of 25 cents on a purchase of $100 in stocks), and that would produce $150 billion in new revenue. This much more modest amount is what I used to get a total of “at least $800 billion.”