answers
youwe
busm4559topic5gigeconomy.ppt
Work in a Global Society
From ‘job for life’ to the ‘Gig economy’
Objectives today’s lecture
Understand notions of work and changes in the perspective of work throughout different historical periods
Recognize the temporal nature, and incomplete assessment, of analyzing changes to work from a ‘job-for-life’ paradigm
Appreciate the ideological and economic forces that have been re-shaping work in 20th and 21st century
Comprehend the basic elements underpinning the emergence of the ’gig’ economy
Understand the core concepts and structures of the ‘gig economy’
Recognize some of the implications of ‘gig’ work from a worker’s and societal perspective
RMIT University
Slide *
RMIT University
Why do we work?
Subsistence activity
“The most common conception of work is that it is any activity which is directly or indirectly centred around the goal of subsistence. It is compromised of the activities one performs to make a living.”
Social activity
Work is centred around social activity
“work, like religious, recreational, or family behaviour, is pursued for its social rewards”
Narrow definition: work is a social activity for it is often done in the presence of others
Social-Psychological Importance of Work
importance and pervasiveness of work
“work is not a part of life, it is literally life itself”
Miller (1951, p. 114-115)
*
Conceptualization of Work
John Maynard Keynes ‘Economic Possibilities for our Grandchildren’ (1931)
Work is a means to an ends
15 hours of work a week
The rise and rise of leisure time
RMIT University
Slide *
Max Weber ‘The Protestant Work Ethic and the Spirit of Capitalism’ (1905)
Work as a duty
Protestant work ethic
Work driven by religious convictions
Conceptualizations of work
| A commodity | Occupational citizenship | Utilitarian trade-off |
| Personal fulfilment | Work as a Social Relation | Identity |
RMIT University
Images:
Weber: http://www.biography.com/people/max-weber-9526066
Keynes: http://www.independent.co.uk/news/business/analysis-and-features/john-maynard-keynes-new-biography-reveals-shocking-details-about-the-economists-sex-life-10101971.html
1. A commodity
-labour as an economic quantity
-that should be regulated by supply and demand of market forces
-those who view work in this form strongly advocate free labour markets that are subject to minimal regulation, e.g. no minimum wages, no restrictions on migration
While on the other extreme, work can be conceptualised as a form of
2. Occupational citizenship
- here the focus is on the human side of work
- strong emphasis on workers’ rights
- belief that at work there should be some form of self-determination, ‘job control’
- advocates of this perspective have a strong belief in the need for government regulation, see important role for unions and regulators.
Often like to point out to the inherent flaws in labour markets,
e.g. time required to train/reskill employees,
immobility due to financial and social commitments
Also the “experience” of work can differ depending on the adopted perspective.
Some see work purely as a:
3. Utilitarian trade-off
-work as ‘lousy activity’ – that one has to undertake to sustain his or herself
-time + effort exchanged for income
- from a managerial perspective this view would entail that it would be expected that workers shirk work – so worker avoid or are unwilling to do the work for which they are being paid.
- Moreover, monetary incentives are regarded as essential in order to get employees to conduct the work for which they are taken on.
On the other hand, work can also be viewed as a form of
4. Personal fulfilment
-so it is about achievement, work as a source of self-esteem
-mangers from this perspective should therefore focus on intrinsic rewards of the job in order to get employees to perform
Another way to conceptualise work is from the perspective of
5. Work as a Social Relation
- it is all about the social dynamics of work
- work is important for a person’s approval, status, sociability, power
Lastly, work can be conceptualised as an important part of someones
6. Identity
-shapes individual’s identity
-occupation, employer, class
At a party, for example, common to ask someone ‘what they do’.
*
The Historical Evolution of Work
Feudal society
Merchant capitalism
Industrial revolution
Post-industrial society
*
Evolution of work:
Merchant Capital – the “Putting out” system
- “[The “putting out system”] enabled mercantile capitalism from a quite early stage to take advantage of the surplus of cheap labour in the countryside.
- The rural artisan worked at home, helped by his family, while still keeping a field and a few animals.
- Raw materials - wool, flax, cotton - were provided by the merchant in town who ran the operation, received the finished or semi- finished product and paid the bill.
- The putting-out system thus combined town and country, craft and farming, industrial and family labour, and at the top, mercantile and industrial capitalism.
- To the artisan, it meant a life that was balanced if not exactly peaceful;
- to the entrepreneur, it meant the possibility of keeping fixed capital costs down and more particularly of coping with the only too frequent gaps in demand: when sales fell off, he simply reduced his orders and employed fewer people - perhaps suspending operations entirely.
- In an economy where it was demand, not supply, which restricted industrial output, out-working provided industry with the necessary elasticity. It could be halted or re-started at a word of command.”
- From Braudel cited in Finkin (2016, p. 605) (emphasis added)
RMIT University
Slide *
RMIT University
*
Evolution of work: Merchant Capital
Economic logic for “putting-out” work
Finkin (2016) identifies 5 rationales that influenced “putting-out” decisions of merchants:
Role of investment and capital intensive technology;
Need to supervise the work;
Risk of collective action;
Flexibility of the product market; and
Control of labor costs and the avoidance of regulation
RMIT University
Slide *
Merchants ‘put out’ materials to craftsmen and sold products
Craft workers became subcontractors
Social relations of work changed
All of these decisions have continued relevance for the ‘Uberization’ of work in the ‘gig economy’
RMIT University
*
The Evolution of Work:
Industrial Revolution
Shift towards factories & use machinery
Division of labour
Mechanization of work
Greater control over labour
Industrial discipline
Position of workers deteriorated
Increased productivity
Images
https://commons.wikimedia.org/wiki/File:Revolucion_industria.jpg
https://www.facebook.com/FordAustralia/photos/a.10150103426143747.317388.126096123746/10152591733868747/?type=1&theater
*
Changes to ideological underpinnings capitalism, and thus shaping work
Laissez Fair Economics (1800s – 1930s)
Individual freedom and responsibility
Unleash human potential through the restoration of a natural system
Belief invisible and self-regulation hand of the market
Theoretical influences: e.g. Smith
Keynesianism (1930s – 1970s) (Week 1)
“New Deal” & “Fordism”
Full-employment
Restrictions on commodification labour
Focus on social rights (Welfare state)
Theoretical influences: e.g. Keynes, Commons, Webbs
Neo-liberalism (1970s – today)
Re-commodification of work
Trade liberalization & globalization (Weeks 2 & 6)
Small government – shrinking public service & removing market distortion such as “rent seeking” unions
Activation agenda - “employability” of those relying on social security
Theoretical influences: e.g. Hayek, Popper, Friedman, Rand
So is Uberization the next step in the commodification of work?
RMIT University
Slide *
RMIT University
*
RMIT University
Slide *
The job-for life
Definition job-for-life (Heery & Noon, 2008)
“There was a time when people entered an occupation fairly certain that they would be able to pursue the same line of work until they retired. Nowadays, technological developments and economic demands mean that flexibility and constant change are required in all jobs.”
Concept applied to (‘western’) developed world, although shares similarities with Chinese ‘Iron Rice Bowl’
Predominantly reflected in a male breadwinner model;
Yet often at the exclusion of other groups:
Women
Indigenous people
Other Minorities
RMIT University
*
RMIT University
Slide *
The decline of the ’job-for-life’
Decline manufacturing in developed world
De-industrialization (Week 3)
Shift in developed economies from manufacturing to services jobs
Increased female participation
Globalization (Week 2 & 7)
Technological change (Week 4)
Labour market re/de-regulation
Emphasis on workplace flexibility (Week 6)
Casualization
Part-time work
Zero-hour contracts
On-call contracts
“Hire-and-fire” regulation
Agency/Temp work
Fissurization of work (Week 2)
’Gig’ work
RMIT University
Images: https://thekeenblog.com/2015/10/26/job-for-life-not-likely/
http://www.coe.int/en/web/compass/globalisation
*
RMIT University
Slide *
The rise of the ‘gig’ economy
RMIT University
https://www.toptal.com/top-3-percent
http://www.bbc.com/news/business-36321826
*
What is the ‘gig’ economy?
Section of economy blurs lines between ‘formal’ & ‘informal sector’
Work that is facilitated by IT
‘Gigs’, ‘tasks’, ‘services’, ‘rides’, etc. carried out by “independent” contractors rather than workers
Match ‘demand’ and ‘supply’ at an instant
Allows for maximization underutilized assets (e.g. car, house, etc.)
“Personal outsourcing” of tasks (not existing or home-based forms of work)
Scalable workforce
Pay is “just-in-time” or “pay-as-you-go” (similar to piece rate systems)
Based on De Stefano (2016, p. 475)
RMIT University
Slide *
RMIT University
*
Rise of the ‘gig economy’
- "Before the Internet, it would be really difficult to find someone, sit them down for ten minutes and get them to work for you, and then fire them after those ten minutes. But with technology, you can actually find them, pay them the tiny amount of money, and then get rid of them when you don't need them anymore.”
RMIT University
Slide *
Biewald (2010),CEO CrowdFlower,
cited by Marvit, M.Z. (2014), The Nation
RMIT University
Image: https://www.forbes.com/sites/paulmartyn/2016/02/02/contingent-labor-getting-the-gig-economy-right/#1bce8b4429c5
*
Different forms of work in the ‘gig’ economy
De Stefano (2015) distinguishes between two forms of work in the ‘gig’ economy:
Source: http://www.softwarefit.com/find-right-crm/
| ‘Crowdwork’ (e.g. Amazon Mechanical Turk) | ‘Work on demand via apps’ or ‘platform-based on call work’ (e.g. Uber, Deliveroo, Airtasker, etc.) |
*
Growth in ‘gig’ work and impact on the formal economy
RMIT University
Slide *
Source: Hall & Krueger (2015, p. 2)
Source: Minfie (2016, p. 20) Grattan institute
Disclaimer: For illustration purposes only, not claiming that growth in Uber work in US has direct impact on value taxi licenses in Australia
RMIT University
Assessing the implications of ‘gig’ work
RMIT University
Slide *
Source: Associated Press
| Advantages |
| Gig work meets untapped consumer demands |
| Matches workers with job opportunities |
| Flexible working schedules |
| Redefinition boundaries of the firm |
| Disadvantages |
| Extreme form of commodification of work |
| Exploitation of the faceless worker in the crowd (e.g. Amazon Mechanical Turk) |
| Workers carry the risk (e.g. cancellations) |
| Gig workers bear risks vicarious liabilities and insurance obligations |
| Gig workers are excluded from employment laws labor protections |
| No employment benefits (e.g. pensions, or healthcare benefits in US) |
| No employment security or income stability |
| Taxation challenges for governments |
RMIT University
*
Pay rates in the ‘gig’ economy (AUS)
Source: Unions NSW (2016, p. 8 )
‘Innovation or Exploitation’
[Online]. Available: https://d3n8a8pro7vhmx.cloudfront.net/unionsnsw/pages/3135/attachments/original/1474529110/Unions_NSW_Report_into_Airtasker.pdf?1474529110
*
Pervasive nature of technology & ‘gig’ work
“Badly paid Uber drivers have replaced badly paid cab drivers, but this will not endure. Driverless cars will eventually mow down Uber. But behind Uber is an army of other tech companies seeking to apply the same methodology to other services and products – cleaners, business consultants, administrators, personal assistants, nurses, lawyers and couriers are all being Uberised. Many more employees will lose their jobs and current remuneration.”
Bornstein (2015), The Guardian
So where does that leave us?
“… the flexible worker of today, and even more so of the future, is expected economically, politically and even culturally to become … a ”labor power entrepreneur”.
[H]e is to learn to consider his labor power, i.e., himself, to be in permanent need of being updated through steady if risky investment.
He also must be willing to change his professional identity as “the market” requires (and indeed would be better off not acquiring one in the first place); move to where the jobs are, rather than insisting on the jobs moving to him and his family; accept working in ”projects” that dissolve when the job is done, rather than in the permanent organization of a settled traditional firm; prefer self-employment over dependent employment and be comfortable with the many forms in between the two etc.
Precarious employment is to be taken to be normal; times of unemployment are to be used to acquire new and better skills, at one’s own cost; competition for jobs is to be seen as an incentive form self-improvement; and a “share economy” in which workers carry some of the risks incurred by their employer is to be welcomed as an opportunity for earning bonuses in good times”
Streeck (2008, p. 11, emphasis added)
RMIT University
Slide *
RMIT University
The Food Delivery Sector
RMIT University
Slide *
Poor worker conditions power gig economy
(play till 3.30m in class)
RMIT University
Image: https://www.flickr.com/photos/jblndl/25739651164
*
RMIT University
Slide *
‘Gig companies’ and the existing regulatory frameworks
Platforms actively challenge existing regulatory framework – e.g. Uber was illegal in several jurisdictions, yet operated nonetheless
Need to recognize that substantial number ‘gig’ platforms are backed by aggressive forms of venture capital
“You know, the very powerful and the very stupid have one thing in common. They don’t alter their views to fit the facts. They alter the facts to fit their views. Which can be uncomfortable if you happen to be one of the facts that need altering.”
Doctor Who, The Face of Evil
Source: Economist (2015)
‘Robin Hood’ platforms or Modern-day ‘sweat-shops’?
RMIT University
Risks of the ‘5 star rating’ systems
- Workers are managed by algorithms & machines (Chery 2016)
- Reduction in managerial oversight – ‘agile’ organizations (De Stefano 2016)
- Managerial prerogative on performance is delegated to users (Aloisi 2016)
- Customers rate the experience with an app instead of performance workers (De Stefano 2016)
- Reviews affected by biases from users, e.g. potential exposure to forms of discrimination.
RMIT University
Slide *
Source: rendan Smialowski/AFP/Getty Images
Review mechanisms risk operating asymmetrically – i.e. not measuring performance at worker’s discretion
RMIT University
*
Conclusion: So is ‘gig’ work new or continuation of earlier forms of (exploitative) work?
Similarities
‘Putting-out’ work relying on home workers
’Piece rate’ like pay system
Further division of labour through technology & organizational systems
Shared characteristics with other contingent and nonstandard forms of employment, including commodification of labour (in more detail next week).
Highly rigid control systems and deskilled work (Cherry 2016, p. 601) similar to factories
Differences
Extent of technological control
Regulatory responses by policy-makers (thus far)
Speed and impact technological advancement
*
“Relevant unresolved questions, such as employment status and the potential misclassification of employment relationships, extend indeed well beyond the boundaries of the gig-economy and, as such, it is preferable to examine them taking into account broader phenomena such as the casualization of the workforce, the informalization of the formal economy and the so-called "demutualization of risk" in modern labor markets.” De Stefano (2016, p. 473)
RMIT University
RMIT University
*
How to respond to the growth of the ‘gig’ economy
Do nothing change and rely on courts to determine employment status and/or fairness ‘gig work’
Develop new categories of work, e.g. ‘independent worker’ (eg Harris & Krueger 2015)
Clarify/expand existing definitions of employment
Abandon employment status as a trigger for regulation altogether
Considerable implications for, e.g. superannuation, workers compensation, leave entitlements, unfair dismissal.
Reconceptualise link between work and social benefits/protections
Adopt the ‘universal basic income’
Re-think or abandon the link between work status and social benefits/protections
RMIT University
Slide *
Slide adapted from Stewart (2016)
RMIT University
*
References
- Bornstein (2015),
- Finkin (2016)
Miller (1951, p. 114-115)
- Econmist 2015
- (Cherry 2016, p. 601)
- (Streeck 2008, p. 11)
- UnionsNSW (2016, p. 8 )
- De Stefano (2016, p. 475)
- De Stefano (2015
- Hall & Krueger (2015, p. 2)
- Economist (2015)
- Minfie (2016, p. 20) Grattan institute
- Stewart , A. (2016)
RMIT University
Slide *
RMIT University
Readings (key readings in bold)
- ABC News (2016) ‘Foodora, Deliveroo food delivery services face legal challenge over claims couriers are independent contractors, not employees’, ABC News, 23 November
- Davis, J.G. (2015) ‘Protecting the rights of the digital workforce in the ‘gig’ economy’, The Conversation 18 August
- De Stefano, V. (2016) The rise of the ‘just-in-time workforce’:On-demand work, crowdwork and labour protection in the ‘gig-economy’ Geneva: ILO
- Economist (2015) ‘The Future of Work: There’s an app for that’
- Greenhouse, S. (2015) ‘Uber: On the road to Nowhere’, The American Prospect, 7 December
- Hiltzik, M. (2016) ‘How the Uberization of work is rooted in the cult of ‘shareholder’ value’, LA Times, 5 January
- Hall, J.V. & Krueger A.B. (2015) Market for Uber’s Driver-Partners in the United States’ Working paper #587 Princeton University
- Kaine, S. and Josserand, E. (2016) ‘Workers are taking on more risk in the Gig economy’ The Conversation 6 July.
- Marin-Guzman, D. (2016) ‘Where’s your next gig?’ AFR Weekend, 28 December
- Sundarajan, A. (2015) ‘The ‘gig economy’ is coming. What will it mean for work?’ The Guardian, 26 July
- Zahidi, S. (2016) ‘The gig economy is changing the way we work. New regulation must catch up’ World Economic Forum
RMIT University
Slide *
RMIT University
Key concepts and essay questions:
Concepts:
- Gig economy
- Neo-liberalism
- Keynesian
- Laissez-faire
- Crowd-based versus platform-based
- Uberization
Questions
How does work in the ‘gig’ economy fit with previous forms of work, and what similarities and differences can be identified?
What are the risks and opportunities of work in the ‘gig economy’, what would be challenges in particular from a worker’s perspective?
What are the underpinning ideological perspectives that have paved the way for the rise of the ‘gig economy’, and to what extent is the further ‘uberization’ of work an inevitability?
RMIT University
Slide *
RMIT University
