In his book, “The Road to Character,” author David Brooks cited President Dwight Eisenhower’s warning about “scientific-technological elites” who “might be tempted to take away power from the citizenry.”
Eisenhower never could have anticipated smartphones, apps, platforms, Uber or the development of the gig economy. All of which makes his warning all the more remarkable.
None of which suggests that today’s scientific-technological elites are consciously attempting to strip power away from people. Indeed, they view what they are building as achieving the opposite.
Intended or unintended, today’s technology platforms – Uber, TaskRabbit, Handy, Lyft – combined with federal court decisions and antitrust law enforcement have disempowered workers who are dependent on those tech platforms for their livelihood.
As “hip” as the “gig economy” may sound, the legal facts are American workers who populate this new economy as so-called independent contractors are not legally entitled to the minimum wage, unemployment insurance, overtime, workers’ compensation, Obamacare employer-funded health insurance, or even Social Security.
And worse, these workers have zero rights to act collectively in order to bargain for any of those benefits.
Decades ago, “independent contractors” who worked as horseshoers organized themselves to bargain collectively and protect themselves from exploitation at the hands of racetracks. But because these craftsmen were not “employees,” courts found their collective activity to be a form of price fixing in violation of the nation’s antitrust law. The same thing happened to ship pilots, among others.
All state and federal labor laws, from the right to collectively bargain to the right to receive a minimum wage, apply only to employees.
Today, Uber drivers and other “gig workers” challenge companies that classify them as independent contractors and not employees. Those legal challenges will continue, as they should.
The UCLA Labor Center issued a report in December that quantifies how much money a business can avoid paying by replacement of employees with independent contractors. The numbers are staggering.
When a business can avoid minimum wages, overtime, unemployment insurance, workers’ compensation and Social Security, it saves as much as 36 cents for every dollar paid for work. No wonder the gig economy is exploding.
Clearly, laws haven’t kept up with technology. Unless something is done, the nation will wake up to a reality in which tens of millions of working people are permanently relegated to an economic system that looks more like the world that preceded President Franklin Roosevelt than the world of worker rights that he created to end the Great Depression.
The question isn’t whether the laws should be changed, but how.
Will Congress act to expand working people’s rights? Not likely. And in the absence of changes in federal law, can a state do anything? Perhaps.
“Happy cows live in California.” “Beef. It’s what’s for dinner.” And almond growers’ “A can a week, that’s all we ask.”
Agricultural marketing associations have rights to collect money from farmers and ranchers, pool that money into collective action to increase their share of the market, and they can do it without running afoul of federal antitrust laws as long as they subject themselves to a mild form of state supervision.
Can that right to collective economic action provide a model for what gig workers need?
A few of us have worked for a year developing a new legal platform that gig workers can use to correct the power imbalance between themselves and the Uber-like platforms they rely on to earn a living.
Assemblywoman Lorena Gonzalez, D-San Diego, is proposing that gig workers could get together, communicate with one another, withhold their services, boycott a platform and report violations to appropriate state agencies. The platforms would have a legal obligation to negotiate with these gig workers on pricing, revenue sharing, insurance, and the terms involved in being accepted or terminated by the platform.
The state’s role would be confined to the State Mediation and Conciliation Service to resolve disputes. Court action would be reserved as a last resort, but a powerful one.
The legislative process is beginning. The debate will be robust, but necessary. Democrats will be asked to think differently about justice. Republicans will have to consider a new form of freedom: Happy cows and empowered gig workers.
Richie Ross is a Sacramento consultant and lobbyist. He can be reached at firstname.lastname@example.org.