The Gig Economy Is a Vampire That We Shouldn't Make Peace With
If organized labor doesn’t hold the line on the principle that workers are employees, we’ll all live to regret it.
Hamilton Nolan
When organized labor frets about the future of worker power in America, they usually focus on the decline of organized labor itself — a half-century of plummeting union density has reduced unions from a powerhouse institution to a niche. That’s a problem. There is an even larger underlying issue, though, that the labor movement now has to factor into everything it does: Not just the disappearance of unions, but the eradication of jobs as we know them.
That doesn’t mean mass unemployment. It means the “gig economy,” a friendly name for a force of capitalist nature that systematically seeks to set everyone’s nice, traditional full-time job on fire and blow the ashes into the wind. Though we are told an inspiring story of how the rise of the gig economy has been driven by the entrepreneurial genius of people like Uber founder and frat boy dumbass Travis Kalanick, the truth is that all of it is an inevitable response to the basic insight that there is money to be made by being able to command a huge work force while minimizing the number of them that you actually call “employees.” Thanks to our nation’s wretched labor laws, any company that is able to designate a worker as an “independent contractor” rather than as an employee can avoid paying for the high cost of benefits, and get the added bonus of ensuring that those workers are legally barred from unionizing, a right which is only afforded to employees. Thus the entire gig economy can be seen as corporate arbitrage of labor law, in which a company is able to stick all the money it would have spent providing for employees into its own pockets by relying on the legal fiction that its workers are not its responsibility.
All of the arguments about the “flexibility” and “freedom” that gig work provides might have merit in a vacuum, but they are utterly cynical in the real world of the United States, where we have foolishly chosen to tie enormous parts of our social safety net to people’s jobs. Here in the richest and most powerful country on earth, all of that freedom and flexibility just means that you do not get health insurance or legal workplace protections or the right to a union. We should not allow the companies, whose primary goal is to minimize labor costs and legal responsibilities by reclassifying employees, to act as if this whole conversation is taking place in Happy Fairyland, where nobody has to worry about health insurance. We must live where we are. And where we are, the growth of the gig economy is a flat out battle between labor and capital.
Taxi drivers become Uber drivers. Grocery workers become Instacart workers. Delivery workers become DoorDash workers. The effect is that the workers must work even harder to make a living without receiving the standard suite of benefits that full time employees get, savings which are then funneled to Wall Street and Silicon Valley. It’s a system that mints tech billionaires and makes thousands of regular people live in their cars. This is called “progress.” It’s not.
No one understands this dynamic better than the companies themselves, although they inevitably lie about it. Beyond the familiar app-based companies are a slew of more anonymous staffing firms that exist to allow companies everywhere to lay off portions of their full time work force and then rehire “contractors” for those same roles. It’s the same economic impulse that has propelled outsourcing, but for jobs that can’t be moved overseas. The unavoidable financial logic of this impulse means that every employer has an overwhelming incentive to gig-ify as many jobs as possible. It won’t stop with drivers and delivery workers. The gig economy is coming for all of us. It is an inequality multiplier, an existential threat to the structure of work, and to the flawed and delicate system we have that provides the basic necessities for Americans to live.
This isn’t a novel insight. I say it only to properly frame the conversation that the labor movement needs to have. Gig companies just spent a fantastic sum of money getting Prop 22 passed in California, which cements their “independent contractor” model and makes it much harder for the state to reclassify their workers as employees. They are now working to export Prop 22 clones to states across the country. In an excellent Businessweek story last week, Josh Eidelson reported that major players in the union world — SEIU, the Teamsters, the New York AFL-CIO, and others — are now open to holding discussions with gig companies to reach some sort of grand “compromise” between the gig economy and organized labor. What the gig companies want is for labor to stop fighting them on the issue of employee classification, and to instead settle for some sort of deal that would maintain the “independent contractor” model but grant workers various benefits, like pay minimums.
This is a mistake, and a dangerous one. What is at stake is not just the gig economy as it exists today, but the potential of a dystopian future in which the gig economy continues to grow until full time employment, which has been taken for granted as the norm in this country for generations, is reduced to an elite status for the few, while the masses are transformed into contractors who are left to fend for themselves. This is not a remote threat. If we do not put up guardrails to prevent it, it will happen, just as surely as global “free trade” caused American manufacturing jobs to disappear overseas. Assenting to it will be just as bad an idea as free trade without strong worker protections was. Gig companies want to make organized labor think that this battle is already lost — that the reasonable move now is simply to focus on what can be done in the context of our new economy. But if unions don’t hold the line on fighting for workers to be classified as employees, nobody else will. What may seem like a small concession now will be looked back on as a turning point, when labor ceded something to capital that will be extremely hard to wrest back.
There is, of course, the non-insignificant question of what to do for all the gig workers who already exist. On this point, I spoke to Brendan Sexton, the head of the Independent Drivers Guild, which was formed in New York City five years ago out of an agreement between Uber and the Machinists Union. Today, the IDG (which is a worker center rather than a union) represents more than 80,000 rideshare drivers in the New York area, and has played an instrumental role in winning things for drivers like minimum wage, tipping and the ability to appeal deactivations by the company.
Sexton, a veteran of the UFCW, says that his focus is a practical one: “To improve drivers’ lives in a tangible way as quickly as possible.” Besides the everyday work of organizing around the immediate concerns of drivers, Sexton is pushing a “Right to Bargain” bill in New York, which would establish collective and sectoral bargaining for drivers at the state level. A survey IDG conducted in late 2019 showed that more than 90% of drivers said that they wanted a union. Since U.S. labor law says they can’t have one, the IDG sees a path to state-sanctioned collective bargaining as the next best thing. Sexton knows that labor law needs to be reformed, but he is also responsible for doing what he can for drivers until that happens. He does not dwell on the more theoretical questions that could take many years to play out. “I don’t have a lot of faith in the federal government” coming to the rescue, he says. “We’re just looking at the here and now.”
It is crucial for the labor movement to recognize that it can fight for existing gig workers, as the IDG does, without giving in on the larger question of whether all of those people deserve to be classified as employees. There is no conflict between fighting where we are today and fighting to be in a better place tomorrow. As important as labor law reform is, unions can’t assume that it will happen. The Taft-Hartley Act gutted worker rights in 1947, and we haven’t succeeded in reversing it in more than 70 years. To decide to acquiesce to the basic proposition of the gig economy — that workers are not really “employees,” and therefore it is okay that they do not receive the rights and benefits that employees are entitled to — is to concede defeat. Unions may imagine that they can do so as a short-term tactical move because they will be rescued by a coming overhaul of hostile labor laws, but that has proven to be a losing bet for our entire lifetimes.
Containing these gig companies and preventing their spread is an important goal for labor in and of itself. The gig economy is a vampire, staring deeply into our eyes to hypnotize us into complacency as it prepares to suck everything out of us. I hope we don’t have to wait until the job of union president has been Uber-ized before the labor movement sees the light.
SPECIAL DEAL: Subscribe to our award-winning print magazine, a publication Bernie Sanders calls "unapologetically on the side of social and economic justice," for just $1 an issue! That means you'll get 10 issues a year for $9.95.
Hamilton Nolan is a labor writer for In These Times. He has spent the past decade writing about labor and politics for Gawker, Splinter, The Guardian, and elsewhere. More of his work is on Substack.
