These days it seems like companies are pawning off as many risks, costs and responsibilities on workers as they can get away with. It’s particularly apparent among new gig-economy workers like Uber and Amazon drivers. The on-going transfer of economic burdens from companies to workers is a principal reason why many (and maybe most) Americans feel economically vulnerable today.
At its heart, this is an ethical problem. Where do flourishing workers (families and communities) fall on our list of national and local priorities? Until very recently, the answer was “pretty low,” which is a key reason why there was such widespread discontent around the 2016 election and why it continues to unsettle our next one. Too many Americans feel that the economic security they have painstakingly built for themselves is being assaulted from all sides.
Since the 1980’s, government policies have massively favored businesses over workers, families and communities. This is simply a fact.
That preferential treatment includes policies that dictate who (between companies and individuals) pays and does not pay taxes, and how much each one of them pays. It includes lax enforcement policies that have enabled our most innovative companies (like Google, Facebook and Amazon) to achieve marketplace dominance by eliminating their competition and, in effect, operate however they want. It is also explained by the declining counterweight of organized labor and (until this year) by open trade policies that found the cost of an American worker directly competing with the cost a similar worker in China, Vietnam or Bangladesh.
The net of these (and similar) forces over the past 50 years is that each American worker has been progressively owning a smaller and smaller share of the nation’s wealth given how little she’s compensated for her labor, while also being asked to pay more than she should for many “goods and services” in our consumer-driven economy. In other words, she’s being squeezed at both ends.
It’s hardly a recipe for flourishing workers, or for the families and communities across America that depend on them to thrive.
Given the on-going, anti-workforce trend, I’m not being entirely facetious when I suggest that Uber drivers could be asked tomorrow to handle Amazon deliveries too. When all that we seem to care about is maximizing an Uber’s or an Amazon’s profits, an additional demand like this on gig-economy workers hardly seems out of the question. Why not pile even more onto them?
No wonder the social fabric feels like it is unraveling on the backs of the individuals (like you and me) whose strength it depends on at least as much as the companies that have organized and rallied us in profit-making directions.
The Shift of Risks, Costs and Responsibilities to Workers Continues
Recent stories about workers at Amazon and Uber illustrate the exploitation and vulnerability that are all-too-familiar by-products of working in America today. Not only is there little-to-no safety net around these and other gig-economy workers; but more and more economic risk is continuously shoved onto them by companies that champion profits over paying their workers enough to provide the bare necessities for their families.
If you drive for Uber (or for one of the other car service companies) you’re probably no longer surprised when your passenger wants you to take him to the hospital with a medical emergency. According to a recent University of Kansas study and several recent podcasts picking up on it, Uber cars are commonly used as ambulances because in many parts of the country, taking an ambulance to the ER is not covered by health insurance and can run into the thousands of dollars. As a result, Uber drivers are being called upon to shoulder the financial responsibility (as well as the stress) of ferrying people who are often in extremis to emergency rooms across America. Of course, they never come close to recouping these psychological and risk-laden “costs” in their ride-hailing fees.
A mid-August op-ed in the Wall Street Journal describes another way that Uber drivers end up paying in ways they never contemplated. Few of these drivers appreciate that they are failing to recoup anything that even approximates the depreciation in value that comes from using their private cars—an amount the authors calculate at $11 billion a year, and another burden that Uber is off-loading onto its workers.
Once drivers understand that they are liquidating the value of their vehicles, in effect receiving pay-day loans with their cars as collateral, the effects may be significant. Companies like Uber, Lyft, Grubhub and Door-Dash may find it more difficult to recruit and retain drivers unless they raise prices and pay drivers more.
Another recent article decried how Amazon has exempted itself from any financial responsibility for its drivers who get in car accidents while they are making deliveries to Amazon’s customers. It is the delivery-driver’s car insurance (and his rising premiums) not Amazon’s that bear this expense. Under a clause in the driver’s contract, company profits are shielded from liability for personal injuries and property damage during the company’s delivery-related accidents. Of course many if not most drivers fail to realize that they have “accepted” this responsibility until it’s too late.
This summer, journalists at the New York Times also focused on the working conditions at Amazon’s cavernous regional warehouses, where its employees toil side-by-side with increasingly nimble robots to ensure that the book or toiletry you ordered gets into the right box. One terrifying down-side in this “who’s more efficient, the human or the machine?” type of workspace, is the extent to which live employees are monitored down to the minute in the quest for almost robot-like efficiency throughout their shifts. In addition, because many fear that their jobs will be replaced by their robotic co-workers one day, they strive to meet an automaton’s level of performance to demonstrate their continuing value as employees.
Ironically, these Amazon warehouses are called “fulfillment centers,” but certainly not for the men and women who are becoming stressed out and broken down by working in them. Moreover, when considered in light of “morally acceptable work standards,” it seems fair to ask whether “free” deliveries, “same day” deliveries and customer convenience can be justified when the worker (family and community) costs are this high.
Beyond Uber and Amazon, all of us are either moving from work towards retirement or have already retired. That’s what makes the next story—about home health workers—both heartwarming and chilling.
Mostly women and often minority women, home health workers are the caregivers for millions of people who are still living at home but find themselves burdened by illness, disability or advanced age. These are “whatever-is-required” kinds of jobs, including feeding, bathing, administering medication, providing companionship and ensuring their clients’ personal safety and integrity. Home health workers are literally sustaining people’s lives, yet they struggle as a group to receive “a living wage” in exchange for their long hours and humanitarian service.
As more people live to advanced age but want to avoid long-tern care facilities by staying at home, these health workers will be in even greater demand, but even the groups that are most likely to need their services are not calling for them to receive adequate pay. I, for one, would not want to hope that I’ll receive compassion when my caregiver isn’t being respected enough or paid enough to provide it. But still, according to the reporters in this story, most of these home health workers are, in fact, providing it. That means these women are, in essence, receiving pay-day loans with their human decency as collateral so that the health care companies that employ them can make as much money as possible. It’s one more shameful tradeoff.
Many American workers are also parents providing for their children. But according to a New York Times story last week, 67% of the 1000 parents surveyed said they had gone into debt to buy their children necessary items such as food, clothes and food, and 69% of them said that they kept these child-related debts a secret.
Part of the reason that the economic insecurity of many (if not most) Americans has stayed below the radar is that many (if not most) Americans are either too proud to talk about it or too embarrassed to admit that they’ve failed to realize the American Dream. But their anxiety is real. It is manifest in our politics, and the full extent of the problem will (quite literally) “come home to roost” when the nation enters more turbulent economic waters or we find ourselves in the next recession.
While we have been victimized as “workers” and “families” by 50 years of government policies that have mostly favored business, we have also been victimized as “consumers,” right down to today.
This country functions on the proposition that we will bring our paychecks home, pay for our families’ necessities, and spend much of the rest buying what our consumer-oriented companies produce. Well, it turns out that in many instances we are overpaying as consumers too.
Because policy makers have largely failed to ensure healthy competition between companies through strategic application of the anti-trust laws, several companies in rapidly growing sectors of the economy have achieved near total market dominance—and the pricing power that comes with it. In other words, in an uncompetitive marketplace, dominant companies can charge consumers more (and sometimes far more) for their goods and services than they could in a more competitive one. This appears to be the case in the market for cell-phone plans.
In recent decades, regulators have allowed the cell phone service market in the US to consolidate. As recently as a few months ago, regulators allowed T-Mobile and Sprint to merge, reducing what little competition there had been even further. Well, a Wall Street Journal column this week highlighted a recent study showing that Americans, on average, pay 27% more than their French counterparts for cell phone service. The difference between the US and France is that the French enjoy a far more competitive market for these kinds of plans. On the other hand, when you allow markets to consolidate and grow un-competitive (as the US has done) higher prices are one of the consequences, but not the one one for individuals. As the study’s author notes:
declining competition has raised profit margins [for companies] and prices [for consumers] while reducing workers’ share of national income in the U.S. By contrast, the labor share [of France’s and the rest of the EU’s economic prosperity] has remained constant in Europe.
What this means is that our piece of the economic pie as workers has also been reduced by the lack of competition at the very same time that the prices we pay as consumers are higher, and sometimes much higher than if there were more, say, telecommunications companies competing for our business.
All of this adds up to economically vulnerable and anxious Americans, whether they are viewed as workers, parents, community members or consumers.
While focusing on gig-economy workers in particular, a recent post here argued for “re-bundling” benefits around them to account for their occasional unemployment or uneven income streams, their loss of traditional health and retirement benefits, and their inability to obtain financing without a traditional 9-to-5 job. To the extent that these “new economy” jobs are likely to become even more plentiful as automation replaces “old economy” jobs, the wide-spread absence of a safety net like this threatens social stability and cohesion. But as the stories above suggest, the anxiety and economic insecurity is hardly limited to gig-ecocomy workers. Instead, it affects nearly all but the very richest Americans.
The good news in this troubling story is that the imbalance may finally have begun to right itself.
A New Political Force for Workers and Consumers?
There are reasons for cautious optimism because of a recent action from within the business community. Last month, the Business Roundtable, comprised of the CEOs of America’s largest companies, issued what it called A Statement on the Purpose of a Corporation.
In a sharp break with the past, this Statement expressed a “fundamental commitment” to all of a company’s stakeholders: putting employees, suppliers and communities on a pedestal that once belonged only to the company’s investors (or shareholders). On “investing in employees,” the Statement said:
This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. . . Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.
If a core group of America’s most prominent business leaders (181 of them, in fact) makes good on this Statement, it will not be for altruistic reasons alone. A comment at the time in Axios which was called “CEO’s Are America’s New Politicians” lists several of the reasons that following through with corrective policies would be in these companies’ best interests too and not just a paternalistic gesture. Among other things:
– Millennial employees demand their employers stand for something beyond profit;
– It is getting harder to recruit and retain talent, especially tech talent, if profit is the only objective;
– A rising number of consumers make purchasing decisions based on a company’s social purpose;
– The media applies a lot more pressure on CEOs to take positions on political topics, such as race and immigration;
– Every CEO/company is vulnerable to split-second, social media uprisings. Undefined CEOs and companies find it impossible to push back.
The Roundtable’s corporate leaders are also aware that the desirability of “the capitalist system” that they safeguard is itself being debated in the run up to the next election. And finally, many of them seem to realize that acting on the Statement’s promises is the right thing to do given the imbalances that have grown between their companies and Amerca’s workers/ consumers over the past 50 years.
What advocates for a flourishing workforce (and the families and communities they support) need to do is hold these corporate leaders to their noble sounding but still generalized promises. This business community needs to generate specific policy proposals and then put their considerable lobbying clout and bully pulpits behind them. For our part, we need to hail their efforts in our public statements and at the ballot box, if and when (as I hope they do) those efforts get underway.
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It is hard to escape the conclusion that America’s social fabric is both loosening and fraying. Much of the reason for this breakdown is the growing tide of economic anxiety and insecurity that has resulted from a half century where American business has gained while American workers and consumers have lost. In the political season ahead, each one of us will have many opportunities to support what is important to us. My argument is that we need to begin with thriving workers, families and communities.
This post was adapted from my September 8, 2019 newsletter. When you subscribe, a new newsletter/post will be delivered to your inbox every Sunday morning.