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Labor Issues: Uber is a Symptom, Not the Disease

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THE BOSTIC REPORT-The debate over whether rideshare companies like Uber, Lyft, and the like has denigrated into easily identified factions here in California. They are overwhelmingly political factions based on economic positions. 

Neither side leaves the partisanship of the Democratic Party. Rather, they fall into the pro-business Democrats versus the pro-union Democrats.  Unfortunately, this false dichotomy obscures the larger problems in labor that merit far more attention than the symptoms of any particular rideshare company or the larger sharing economy. 

Looking at the rideshare market, I see it representative of image problems within the taxi industry, a reflection of a jobs “recovery” overwhelmingly driven by part time work, and wage stagnation. 

Taxicabs have an image problem-The taxi industry is the butt of long-standing punch lines about angry drivers, dangerous rides, sleep-deprived workers making hazardous choices, and circuitous routes that drive up fares.  Jokes go back decades. 

Judging an industry on how it plays within a comic’s act or as a caricature in film and television is unfair. But looking at historical issues of taxicabs is helpful in understanding why people might be more prone to jumping into the car of an Uber driver who is less experienced and operating under less regulation and licensure than a taxi driver. 

Taxicabs operating on tampered meters was a storied issue two decades ago that incited broad distrust by the public and tense interactions between riders nervous about the fairness of the meter read and under-slept drivers tired of battles over the truth of a fare. 

This parallels the tense negotiation of monitoring your cabbie’s route. I’ve been taken for the hillbilly before and had to demand changes in route because, frankly, if I’m going from Westchester to Culver City, I just don’t think a ride down Slauson to South Central is the most efficient way there. Call me crazy. 

We also only seem to notice problem drivers of taxis in traffic around us. You know the ones – where erratic lane changes, sudden accelerations, horn honking, and other oddities stand out and negatively brand all taxi drivers.  I’ve seen plenty of bad driving in cabs around me and while I know this isn’t representative of most taxicab drivers, it erodes my perception of them all. Honestly, this is an empathetic reaction of mine. Having been stuck in traffic on the way TO work, I can only imagine the grating effect of living your workday IN traffic. It’s only natural that a professional cab driver would be prone to irritation with other cars. Especially when working 12 hour shifts. 

Overgeneralizations aside, I must confess that I personally don’t take cabs. I’ve only had bad experiences here in LA and this is mainly due to the fact that I only use them when flying out of LAX. Because I live within a few miles of the airport, no cabbie is happy to see me. I’m also stuck with an unfair $20 minimum. 

My point here is that cabbies have an earned and unearned reputation as irritable, possibly prone to unfair pricing, and dangerous drivers exists – merited or not – and the perception of an Uber or Lyft driver as eager, younger, tech-savvy people trying to supplement their income via sharing their car is more appealing. Full confession here – I know a lot of Uber and Lyft drivers and they are exactly that simplistic stereotype. 

Our Jobs “Recovery” is Built off the Rise of Part-Time Labor-Between 2008 and 2010, our economy lost 8.8 million jobs and we settled into an official unemployment rate of roughly 10%. It was utterly devastating to families, cities, and our country. The long, slow climb back to last month’s 5.9% unemployment rate has been arduous and disheartening. But, on the surface at least, we are recovering and breaking the 6% barrier was a huge benchmark. 

It means that a lot more people are working, not that a lot more people are working to full employment. It also obscures the huge movement out of the labor market for many people who have simply given up. Either they have entered into the underground economy, exhausted all their unemployment benefits and taken a minimalist approach to “retirement”, or just walked away from the hope of working again, the large numbers of people exiting the labor force is one of those silent alarm bells that will only ring louder as a new “silenced” majority rises in numbers and sinks the social safety network. 

Louder than the ones leaving the marketplace are the overworked part-timers and temporary workers that encompass the bulk of our newly created jobs. On this, September’s report showed progress in the sense that more full time jobs were created than part time jobs. 

However, we are still looking at 7.1 million underemployed workers – those working part time when full time work is needed. And herein lies the breeding ground for the success of the rideshare economy. 

In a sense, rideshare is the exploitation of a person’s last resources. Where one used to have full time employment opportunities, that person must make do with part time work and the ability to exploit resources that were built while one had a full time job. 

If you have a car, but lack a full time job opportunity, then you leverage that asset to its best potential. Participating in a rideshare market positions you to do exactly that. This is a short-term advantage because your use of the resource as an amateur taxi will only last as long as the resource is available. Without the full time income to replenish your asset, you will one day use the last of the asset. 

In that manner, the rideshare market is a symptom of the decline of the American economy. Not that this should act to demonize rideshare. It’s just that, as I said at the onset of this piece, Uber and Lyft are not the disease. They are the symptom. 

Uber and Ridesharing at Large are a Result of Wage Stagnation-This brings us to the larger disease: wage stagnation. In terms that should be shocking, Americans have lost ground in wages. This is starkly complementary to the rise in wealth, not necessarily wages, of the richest 1%. 

While we continue have strong growth in productivity, efficiency, and overall gross domestic product, the spoils of our collective growth have not translated into high wages despite the fact that our dollar buys less than it did 30 years ago. 

Buckle in for some depressing facts and figures here. 

In the near term, the nominal median household income has fallen from about $55,000 in 2005 to just around $52,000 last year. Looking back 30 years to 1974, we make just $5,000 more per year. Adjusted for inflation, the 40% of us making minimum wages make less than we did in 1968. Despite the economy’s growth of 18% since 2000, wages have declined by 12%. 

I could go on deeper into the tapestry of our wage stagnation, but is it really necessary? Instead, let’s explore three large reasons why rideshare might have a foothold in our workers’ hearts and rest assured, they are all political. 

The fall of unions, both through conservative policy making, has come at the same time as the great American corporation has become decidedly less patriotic while the Republican party has failed to notice this disturbing trend. The incarnations of this trend are multiple, but the fact that we permit large corporations to subsidize poverty wages through the exploitation of our social safety network (i.e. – section 8 housing, food stamps… aka SNAP benefits, et al) is a disastrous break in our allegiance to the myth of the common man. 


 

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Couple that with a trend where corporations are not connected to a specific nation, where they are freer in an era of globalization to increasingly lose meaningful roots in any particular nation and you have the breeding ground for our wage demise. Pit workers in lower cost of living nations against ours via free trade pacts favoring trade over people and you undercut the strength of our labor unions. Compound that with tax inversions, multinational corporations, and a political impotence to fight monopolies and you get our wage stagnation. 

Then provide the large corporations with an avenue like Citizens United to support the status quo on the minimum wage, their employees’ access to the social safety network, and tax policies supporting their bottom line and you have the perfect storm of desperation. In come Uber, Lyft, and the like to provide a much-needed boost of income. 

Rideshare has value-Bottom line, Uber and Lyft and others provide us with a value. First, it empowers the individual, much like a union does, by permitting for the growth of a collective system for people to participate in a larger economy. It is essentially one voice. This system provides additional income opportunities in our part-time economy. 

Certainly, there are areas of policy where we should subject rideshare drivers to some regulations for safety and fairness. 

However, we do not need to kill off a resource for people trying to eek out a living in the midst of an unprecedented structural decline in the American middle class. Rather, save that battle for the real diseases: wage stagnation, part-time workers replacing full time employment, the denigration of our overall labor force in an era of global competition, and general policies that benefit an increasingly unpatriotic corporate world.

 

(Odysseus Bostick is a Los Angeles teacher and former candidate for the Los Angeles City Council. He writes The Bostick Report for CityWatch.)

-cw

 

 

 

CityWatch

Vol 12 Issue 81

Pub: Oct 7, 2014