Earlier this month, a federal judge gave Uber drivers permission to go forward with a class-action lawsuit against the ride-hailing service. That was just the latest decision in a long-standing labor dispute over whether the company’s drivers are employees — and therefore, subject to benefits and mileage reimbursements — or, as Uber officials insist, independent contractors.
The final verdict has wide implications for other tech startups like Airbnb and Lyft, and highlights the changing nature of work in the new digital economy. As economist Guy Standing points out, however, it’s also the end result of a set of economic policies that were set in motion more than three decades ago.
Standing, who teaches at the University of London, traces this all back to the late 1970s when Western economies — in an effort to promote competition and boost productivity — began a process of labor deregulation, rolling back workplace protections that were set up after World War II. That, along with globalization and the decline of unions, led to an erosion of workers rights over the next 30 years that’s created an entirely new class of worker who are resigned to a life of job insecurity. He calls them “the precariat.”
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He said he believes the precariat is made up of a broad variety of jobs that include adjunct professors, freelancers, substitute teachers — essentially any worker without long-term job stability. According to one estimate, at least one-third of the U.S. workforce falls into the category.
Standing spoke with “To the Best of Our Knowledge” executive producer Steve Paulson about this new insecure class, the changing nature of work, and his proposed solution: A guaranteed basic income for everyone.
Steve Paulson: What kind of work does the precariat do?
Guy Standing: The jobs jump around, are insecure, and they don’t lead anywhere. But that is actually not the most important aspect of the precariat. More important is the fact that people in the precariat have to do a hell of a lot of work that is not labor. They have to network, they have to be trained, they have to search for new jobs, they have to wait around, they have to do a lot of form filling and things like that, which in a real way is work. In addition, this is the first working class in history which has a level of education which is on average above the labor they expect to do.
Is the rise of the on-demand economy linked to the precariat in any way?
Without a doubt. What I think we should be talking about is that people in the on-demand economy (or the sharing economy) have to be seen as taskers. One of the fastest growing phenomena in the labor markets of the world is crowd labor, where you will find labor brokers going online and listing the tasks they need done, and then taking bids from people who are prepared to do these tasks. And this sort of thing is leading to competition between workers in Manila, in Goa, in Wisconsin and in Manchester. They’re competing against one another to work for increasingly lower wages. That phenomenon is part of the on-demand economy.
I’m wondering if there’s a silver lining with some of these kinds of jobs, because it would seem that these workers no longer have to be wholly dependent on a single job.
That’s the upside of the growth of the precariat. I don’t see the precariat solely as victims, and this sense of freedom goes with the desire for combining different types of activity, doing different sorts of work, and building your own sense of occupation — that’s the upside. The downside is that we’re in a situation where the old 20th century income distribution system has broken down. Real wages have been stagnant or dropping in the U.S., Germany, France, Britain, and many other parts of the world. I don’t think they’re going to be reversed.
Do we also need to redefine what we mean by work?
That’s Article 1 of my proposed Precariat Charter — that we need to re-conceptualize what we mean by work. Work includes things like gardening, caring for your elderly mother, and searching for jobs. Also, people in the precariat have to apply to thousands of jobs before they actually get an interview, let alone a job offer,
Are you saying we should get paid for this kind of work (i.e. searching for jobs or caring for my mother)?
What we need to do is realize that we have an income distribution crisis. We want to encourage people like you and me to do activities like volunteering, caring for relatives, and so on. That’s why I favor a basic income. We’ve got to think out of the box to address these issues.
You’ll have to explain what you mean by a basic income.
A basic income would be to give every citizen a guaranteed minimum income that’s paid each month in cash without conditions, on which they could survive.
How do we afford it? Who pays for this?
An example of a guaranteed income is the Alaska Permanent Fund, which takes part of the profits from oil. You could also finance a basic income from patents, from high tech industries, or other resources. The money then goes into a capital fund and is invested. Then each year they pay each citizen a basic income. Other countries are also moving in this direction.
How big of a basic income would people get?
What I’m proposing is a modest amount paid as a right, with supplements used as automatic stabilizers. In other words, if the economy is going into recession, you would top the basic income up. If it’s in a high employment situation, then you could cut it back.
If people were guaranteed a certain income, you wouldn’t worry that they’d lose their incentive to find any job at all?
We’ve done pilots in India and Africa where, in fact, what happens is that people who have basic security work more, not less. When they work, they’re more productive, not less. People who have basic security tend to be more entrepreneurial in their approach. They make longer term rational decisions and are more cooperative. They also more tolerant of other people.
What about the politics of some of this? Don’t you have to convince the elites that your proposal — a basic income — is a good idea?
That’s exactly what is happening. I was recently invited to Silicon Valley to speak with a lot of high tech, affluent people who are in the 0.001 percent, and they all saw the logic. They realized that if we don’t go in that direction, the inequalities and insecurities are going to become threatening to the whole system, and we’ll all be losers.
Do you think the days of the stable, permanent job are behind us? Is that whole idea of staying with one job for years disappearing?
I think that it won’t disappear, but we’ve got to deal with what is going to be the majority. In many countries, 40 percent of the total adult population are people in the precariat or feel that they are in it. That is a growing number, not a shrinking one. And it’s not something to do just with the recession since 2008. It’s a structural phenomenon that’s been taking place over the last 30 years.
