Socialism is the Best Medicine

Socialism is the Best Medicine

Gig Greed – Racing to Lower the Floor

February 15, 2022

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I used to think that ‘gig’ referred to gigabytes, and gig workers were mostly app-based drivers and food deliverers. Not so!

A ‘gig’ is any job that lasts a specific period of time. Gig work includes contract or project-based work, freelance work, and temporary work. Also called a ‘side-hustle,’ gig jobs are now the only option for increasing numbers of workers.

A ‘gig economy’ is one where temporary or contract jobs are more common than full-time, permanent jobs. According to one survey, the gig workforce is growing three times faster than the traditional salaried workforce, and is set to overtake it in the next five years.

Currently, 36 percent of US workers do contract work, with one in ten doing app-based gig work, and federal agencies employ 2.6 times more contract employees than salaried ones. In Canada, more than one in three businesses employ gig workers. Gig workers can be found in every sector of the economy, including resource extraction, agriculture, construction, manufacture, transportation, education, and health-care.

Employers promote the flexibility of gig work and brag that professionals prefer it for that reason. Most workers do not have that choice. The cost of basic necessities such as food, accommodation, and transportation are not flexible; they are fixed and rising, so workers’ wages must also be fixed and rising.

Gig workers typically earn 58 percent less than full-time employees, and are more likely to be immigrant, racialized, and vulnerable to employer wage-theft (not being paid for their work).

Even professionals who choose to work on contract (freelancers) face similar challenges. They get no employer-provided benefits, and are also subject to wage theft and unpredictable income. To cover their expenses, 63 percent of full-time freelancers dip into their savings at least once a month, compared with only 20 percent of full-time non-freelancers.

Gig work is also called precarious work or zero-hour contract work, because there is no set number of work hours. Employers pay only for the work-time that creates profit for them. They do not pay for travel time to the gig, wait time between gigs, meal and bathroom breaks, or time off due to illness or injury.

Gig workers often get their work schedules at the very last minute. They never know when they will be called to work or for how many hours, so many take several gig jobs to make ends meet. Unpredictable hours create a scheduling nightmare, especially for workers with young children.

Most workers prefer permanent, full-time jobs with benefits and set hours. However, employers resent paying for anything that doesn’t create profit. They want workers who are available only when needed, and only for as long as needed. This practice is prohibited by labor standards legislation.

Employers get around labor laws by misclassifying workers as independent or dependent contractors. Such misclassification allows employers to ignore minimum wage, overtime, and anti-discrimination laws, and avoid paying unemployment insurance, workers’ compensation, and payroll taxes. They don’t have to provide job security, pensions, medical insurance, or any other benefit. The money they save goes into their pockets as profit.

The problem isn’t gig work; the problem is that gig workers are denied the same legal rights and protections as other workers.

How did we get here?

In the decades after WWII, millions of people fought for higher wages, safe work, affordable housing, better schools, access to medical care, and social equality.

By the early 1970s, the portion of workers in unions reached a post-war high. Wages were rising, poverty was declining, and income inequality was the lowest ever recorded. It was simply assumed that society would keep changing for the better. This assumption was wrong. In class war, not pushing forward means being pushed back.

In 1972, the top executives of major US corporations formed a Business Roundtable. Their goal was to restore the power and profitability of American capitalism by taking back the economic, social, and political ground they had lost to the working class. This employers’ offensive, also called neoliberalism, signaled a counter-revolution against the gains of the 60s.

The capitalist assault included anti-union legislation, union busting, mass layoffs, deregulating industry, and imposing concession contracts that lowered wages, reduced or eliminated benefits, and introduced a ‘two-tier’ system where new hires are paid less for doing the same work.

A racist two-tier system had long existed between permanent, full-time workers and low-paid migrant workers in agriculture and other seasonal industries. Hungry for ever-more profit, bosses pushed to impose those same degraded conditions on the rest of the labor force.

Unions opposed two-tier contracts. Creating a second-class category of workers turns workers against each other, weakens unions, and pulls down all workers’ wages and benefits. Despite their verbal opposition, union executives failed to organize a serious challenge to the employer class. By conceding two-tier contracts, unions opened the door to expanding the category of ‘second-class worker’ across the entire economy.

The less unions fought for workers’ rights, the fewer people wanted to join unions. Those who tried to form unions faced hostile bosses, harsh anti-union legislation, and reluctant union executives. As a result, the portion of US workers in unions plummeted from a high of 35 percent during the mid-1950s to just 10 percent today. Real wages fell, poverty increased, and inequality rose.

Systemic wage theft

Workers’ wages are not tied to how much they produce, but to how effectively they fight to raise them. Until 1979, workers were able to win wage increases that matched their rising productivity. The capitalist offensive forced wages down, even as productivity increased. Between 1979 and 2000, productivity grew 3.5 times faster than workers’ wages. Had wage rises matched productivity gains, the minimum wage today would be $24 (US dollars) an hour. In 2017 alone, US workers would have received $1.78 trillion more wages than they actually got. This systemic wage theft transferred massive amounts of wealth from workers to capitalists.

In 1965, corporate executive compensation was 20 times greater than the average workers’ income. By 2020, top executives were taking home 351 times more than the average worker, an increase of 1,322 percent. Yet, from 1978 to 2013, the typical worker’s pay increased only 10 percent.

Capitalist competition compels corporations to find ever-more ways to cut costs and raise profits. In the 1970s, manufacturers devised a profit-maximizing system called just-in-time inventory management, where needed materials are scheduled to arrive just as production is scheduled to begin, and in just the right amount.

Gig work is just-in-time labor management, where workers are paid only when they are needed and only for as long as they are needed. By misclassifying workers as independent contractors, capitalists can strip workers of wage protections they won over decades of bitter struggle.

Stealing the social wage

The 60’s rebellions had forced an expansion of State-funded public services, also called the social wage because it benefits the entire working class. The capitalist assault on individual wages was matched by an equally vicious assault on the social wage.

In 1987, UK Prime Minister Thatcher stated, “There is no such thing as society, only individuals and families.” She meant that government is responsible only for managing the economy, and meeting people’s needs is an individual or family responsibility. Thatcher’s statement was echoed by President Regan in the US and Prime Minister Mulroney in Canada. All three introduced deep corporate tax cuts that transferred even more wealth from workers to capitalists.

In 1968, the US corporate tax rate was 52.8 percent. Today, it is just 21 percent. In 1981, Canada’s corporate tax rate was 51 percent. It is 26.4 percent today. The dramatic drop in government revenue led to deep cuts in funding for public services. The declining quality of these under-funded services was then used to justify handing them to the private sector. Public services can be privatized (made profitable) only by raising the price, lowering the quality, cutting service workers’ wages, and excluding those who cannot pay.

As the cost of basic services was rising, workers wages were falling, forcing them to go without, deplete their savings, and take on debt to buy what they needed. Workers’ living standards fell, and inequality skyrocketed.

A capitalist State

Prime Minister Thatcher was correct that the State safeguards the capitalist economy, and it does this by supporting the capitalist class. The capitalist State grants concessions only when workers challenge capitalist rule, and it takes back those concessions as soon as the threat has passed. This is the primary lesson of the post-war rebellions. It also explains why governments support worker misclassification.

When California ride-share drivers organized to demand full labor rights, gig giants Uber, Lyft, and Doordash invested a record-breaking $200 million to pass Proposition 22 which misclassified their drivers as independent contractors, not employees.

Establishing a two-tier labor standard is the first step to eliminating the top tier altogether. When Prop 22 passed in November 2020, a New York Times headline read, “The victory of Proposition 22 could help gig companies remake labor laws throughout the country.” Although a US federal judge ruled Prop 22 unconstitutional and unenforceable, that decision is under appeal.

In Canada, Uber is pushing ‘Flexible Work+’ as a way to “raise the standard” for gig workers by misclassifying them as dependent contractors and, therefore, exempt from the rights and protections of the Employment Standards Act. This is no small potatoes. In Toronto alone, almost 250 digital platform companies match consumers with providers of goods and services.

In 2021, the Ontario Workforce Recovery Advisory Committee (OWRAC) was formed to recommend changes to labor law. Its ‘Recommendation 15’ states, “Create and recognize the dependent contractor category for gig and platform workers in the app-based space.”

Business unions

The Ontario Federation of Labour insists that gig workers must be classified as workers. However, one of its affiliate unions saw an opportunity to gain influence and expand its future dues base.

The day after co-sponsoring a labor forum on gig workers’ rights, the United Food and Commercial Workers Union announced a National Agreement with Uber. In exchange for UFCW supporting Uber’s efforts to misclassify gig workers as independent or dependent contractors, Uber gave UFCW the right to represent Uber’s 100,000 workers in Canada. UFCW is not the only union making backroom deals with digital corporations.

These dirty deals are “The opposite of everything the labour movement should be doing.” Gig workers have the right to choose their own union. Gig Workers United has partnered with the Canadian Union of Postal Workers (CUPW) to champion a Gig Workers’ Bill of Rights.

Today’s abysmally low rate of unionization does not mean that workers accept how things are. Sixty-eight percent of Americans approve of labor unions. Almost half of nonunion workers say they would join a union if they had the chance.

The problem is that most unions today are bureaucratized, undemocratic businesses that refuse to rock a boat that workers desperately need to be rocked, if not overturned.

Fortunately, the labor movement is much larger than the unions; it includes the entire working class. Workers have organized themselves in the past, and they continue to organize themselves in every country, including the US and Canada. If we connect our struggles, we can rebuild a fighting labor movement. This time, we cannot settle for reforms. The only way we can set things right is to rebuild society completely, from the bottom up.

Class war is war

Class war is built into capitalism. Capitalists don’t produce wealth; they pay workers to produce it for them, then return a pittance to workers in the form of wages and benefits. A large part of the wealth workers produce is used to keep them down by convincing and coercing them to accept less than they need, and denying them any say over their work and the direction of society.

All the institutions of capitalism beat the same drum – that workers must ‘learn to live with’ whatever misery the bosses foist upon them.

When workers rise up to demand more pay and more say, they rock the system to its core. While capitalists need workers to produce capital, workers don’t need capitalists; they can produce the means of life without them. Workers are also capable of directing production to meet human needs, and would feel immense satisfaction in doing so. Knowing this, capitalists put substantial effort into dividing, demoralizing, and demeaning workers, and promoting the monstrous lie that workers, who make everything function, are incapable of directing society.

The best measure of which class is gaining ground is whether workers’ living standards are rising or falling. From the end of WWII to the mid-1970s, workers’ living standards rose. Since the capitalist offensive, living standards have fallen, making each new generation of workers sicker and poorer than the previous one.

When capitalists lose ground to workers, they lose capital. When workers lose ground to capitalists, they lose their lives.

Justice for Workers

Capitalists use science and technology to find ways to produce more with less labor. Reducing the labor-time required to produce what people need should be a huge social benefit. In capitalist hands it has proved the opposite.

Today, ordinary people are barely getting by, while a small and powerful elite revel in unprecedented wealth.

Capitalists are using the digital revolution to lower the floor of accepted labor practices for the entire working class. While some call this a race to the bottom, there is no bottom for capitalists, if profit can be made by going even lower. The bottom is where workers decide to fight back.

The changes we need cannot be won piecemeal, on a workplace-by-workplace basis, or even on an industry-wide basis. The capitalist class are attacking the entire working class, so we must mobilize as a class. We need to do more than push them back, we need to push forward to create a world that protects and provides for us all.

3 Comments

3 Comments

  1. Don’t know if the word is a local expression, but I have heard people use the word “gig” to mean to be caught unawares with a bad outcome that usually means getting ripped off monetarily or being tricked to part with your money. You won’t find that usage in the dictionary, but it refers to a fish or a frog being caught by a multi-hooked lure that is dragged through the water and catches the creatures by chance.

    Gig workers might fit the description in that they are independently swimming in a system that offers no security or safety net. In that system there is no interdependence so if caught by a hook you are “gigged” by hidden dangers. The modern basis of this system can be seen in the Chicago Economic School narrative that we are all individuals scrappily swimming in a school with other fish trying to survive, not as a cooperative school of members, but as lone fish dependent on personal responsibility and merit. Hidden markets decide everything. We have no control over our lives since these hidden mechanisms decide who survives and who gets “gigged.” It’s the old Horatio Alger narrative, pulling oneself up by one’s boot straps mentality, not the mutual aid mindset where community values are the decision makers.

    Capitalism has to die, and the first line of assault has to be exposing the craven and destructive false narratives it uses to deceive people into thinking there are no alternatives, breaking all bonds of solidarity leaving us as individual fish in a school of individual fish and susceptible to being gigged at any moment. Could be an illness that you cannot afford to pay for; could be a job moved overseas where cheaper labor can be found; could be a boss firing you willy-nilly and you have no union to give you recourse to a grievance procedure.

    It’s time to kill the “individual” narrative and reinvigorate the way the world should really operate, where we can all, through solidarity and democratic control, decide the system that we swim in and mitigate the potential gigs that unexpectedly snare us.

    Reply
  2. Excellent summary of the state of the historical struggle between the majority and the ruling minority. This 10,000 year old class war may enter its final battle this century. Climate change, brutal inequality, excess money, unpayable global debt and polarisation into populism all threaten capitalist social democracy.

    The system cannot handle any of these crises. Breakdown will present humanity with a realistic opportunity – genuine democracy with direct control by the majority in every institution.

    Reply
  3. Thanks so much for this excellent summary of the balance of class forces and the state of the working class. The road to a class wide struggle against capitalism can start with and be facilitated by the small battles that are now taking place. Every strike and organizing effort can lead to further struggle. Socialist need to be involved in and supportive of every battle no matter how small over direct economic issues and broader political issues

    Reply

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