Robert Reich: The ‘Sharing Economy’? More Like the ‘Share the Crumbs’ Economy

Robert Reich February 4, 2015

The sharing economy isn't really sharing—it's mostly just taking.

This sto­ry first appeared on RobertRe​ich​.org.

How would you like to live in an econ­o­my where robots do every­thing that can be pre­dictably pro­grammed in advance, and almost all prof­its go to the robots’ owners?

Mean­while, human beings do the work that’s unpre­dictable — odd jobs, on-call projects, fetch­ing and fix­ing, dri­ving and deliv­er­ing, tiny tasks need­ed at any and all hours — and patch togeth­er bare­ly enough to live on.

Brace your­self. This is the econ­o­my we’re now bar­rel­ing toward.

They’re Uber dri­vers, Instacart shop­pers, and Airbnb hosts. They include Taskrab­bit job­bers, Upcoun­sels on-demand attor­neys, and Health­taps on-line doctors.

They’re Mechan­i­cal Turks.

The euphemism is the share” econ­o­my. A more accu­rate term would be the share-the-scraps” economy.

New soft­ware tech­nolo­gies are allow­ing almost any job to be divid­ed up into dis­crete tasks that can be parceled out to work­ers when they’re need­ed, with pay deter­mined by demand for that par­tic­u­lar job at that par­tic­u­lar moment.

Cus­tomers and work­ers are matched online. Work­ers are rat­ed on qual­i­ty and reliability.

The big mon­ey goes to the cor­po­ra­tions that own the soft­ware. The scraps go to the on-demand workers.

Con­sid­er Amazon’s Mechan­i­cal Turk.” Ama­zon calls it a mar­ket­place for work that requires human intel­li­gence.”

In real­i­ty, it’s an Inter­net job board offer­ing min­i­mal pay for mind­less­ly-bor­ing bite-sized chores. Com­put­ers can’t do them because they require some min­i­mal judg­ment, so human beings do them for peanuts — say, writ­ing a prod­uct descrip­tion, for $3; or choos­ing the best of sev­er­al pho­tographs, for 30 cents; or deci­pher­ing hand­writ­ing, for 50 cents.

Ama­zon takes a healthy cut of every transaction.

This is the log­i­cal cul­mi­na­tion of a process that began thir­ty years ago when cor­po­ra­tions began turn­ing over full-time jobs to tem­po­rary work­ers, inde­pen­dent con­trac­tors, free-lancers, and consultants.

It was a way to shift risks and uncer­tain­ties onto the work­ers — work that might entail more hours than planned for, or was more stress­ful than expected.

And a way to cir­cum­vent labor laws that set min­i­mal stan­dards for wages, hours, and work­ing con­di­tions. And that enabled employ­ees to join togeth­er to bar­gain for bet­ter pay and benefits.

The new on-demand work shifts risks entire­ly onto work­ers, and elim­i­nates min­i­mal stan­dards completely.

In effect, on-demand work is a rever­sion to the piece work of the nine­teenth cen­tu­ry — when work­ers had no pow­er and no legal rights, took all the risks, and worked all hours for almost nothing.

Uber dri­vers use their own cars, take out their own insur­ance, work as many hours as they want or can — and pay Uber a fat per­cent. Work­er safe­ty? Social Secu­ri­ty? Uber says it’s not the employ­er so it’s not responsible.

Amazon’s Mechan­i­cal Turks work for pen­nies, lit­er­al­ly. Min­i­mum wage? Time-and‑a half for over­time? Ama­zon says it just con­nects buy­ers and sell­ers so it’s not responsible.

Defend­ers of on-demand work empha­size its flex­i­bil­i­ty. Work­ers can put in what­ev­er time they want, work around their sched­ules, fill in the down­time in their calendars.

Peo­ple are mon­e­tiz­ing their own down­time,” Arun Sun­darara­jan, a pro­fes­sor at New York University’s busi­ness school, told the New York Times.

But this argu­ment con­fus­es down­time” with the time peo­ple nor­mal­ly reserve for the rest of their lives.

There are still only 24 hours in a day. When down­time” is turned into work time, and that work time is unpre­dictable and low-paid, what hap­pens to per­son­al rela­tion­ships? Fam­i­ly? One’s own health?

Oth­er pro­po­nents of on-demand work point to stud­ies, such as one recent­ly com­mis­sioned by Uber, show­ing Uber’s on-demand work­ers to be hap­py.”

But how many of them would be hap­pi­er with a good-pay­ing job offer­ing reg­u­lar hours?

An oppor­tu­ni­ty to make some extra bucks can seem mighty attrac­tive in an econ­o­my whose medi­an wage has been stag­nant for thir­ty years and almost all of whose eco­nom­ic gains have been going to the top.

That doesn’t make the oppor­tu­ni­ty a great deal. It only shows how bad a deal most work­ing peo­ple have oth­er­wise been getting.

Defend­ers also point out that as on-demand work con­tin­ues to grow, on-demand work­ers are join­ing togeth­er in guild-like groups to buy insur­ance and oth­er benefits.

But, notably, they aren’t using their bar­gain­ing pow­er to get a larg­er share of the income they pull in, or stead­ier hours. That would be a union – some­thing that Uber, Ama­zon, and oth­er on-demand com­pa­nies don’t want.

Some econ­o­mists laud on-demand work as a means of uti­liz­ing peo­ple more effi­cient­ly.

But the biggest eco­nom­ic chal­lenge we face isn’t using peo­ple more effi­cient­ly. It’s allo­cat­ing work and the gains from work more decently.

On this mea­sure, the share-the-scraps econ­o­my is hurtling us backwards.

Robert B. Reich, Chancellor’s Pro­fes­sor of Pub­lic Pol­i­cy at the Uni­ver­si­ty of Cal­i­for­nia at Berke­ley, was Sec­re­tary of Labor in the Clin­ton admin­is­tra­tion. Time mag­a­zine named him one of the ten most effec­tive cab­i­net sec­re­taries of the 20th cen­tu­ry. He has writ­ten thir­teen books, includ­ing the best­sellers After­shock and The Work of Nations. His lat­est, Beyond Out­rage, is now out in paper­back. He is also a found­ing edi­tor of the Amer­i­can Prospect and chair­man of Com­mon Cause. His new film, Inequal­i­ty for All, is now avail­able on Net­flix, iTunes, DVD and On Demand.
Limited Time:

SUBSCRIBE TO IN THESE TIMES MAGAZINE FOR JUST $1 A MONTH