There are many who think the structure of work is rapidly changing. The “gig economy,” they argue, is replacing the old economy; robots and artificial intelligence are displacing workers faster than ever. “The Future of Work” has become an angst-prone staple at conferences across the globe.
It’s always possible that this time is different, and, in fact, some notable differences are in play. But after reading a new paper by the Economic Policy Institute’s Larry Mishel on the economics of labor at Uber, I’m convinced that the new thinking needs a rethink. The challenges facing the future of work are, in fact, steep, but they’re largely the same ones facing the present (and the past): Too many workers have too little bargaining clout, and they are exploited in jobs that lack a robust set of labor protections. In other words, this is neither a technology problem nor an evolution-of-work problem. It’s a political problem — one that could be solved by supportive policy.
To be clear, the structure of work is changing, but that has always been the case. It does so glacially — Mishel shows that gig, or on-demand, workers represent a tiny share of the workforce — and it’s not changing any faster now than it has in the past. Neither is the pace at which technology is displacing workers speeding up; if anything, based on disappointing productivity growth, it surprisingly appears to have slowed.
Mishel’s paper zooms in on a specific question: how much are Uber drivers paid? But in deriving the answer, his work yields important insights into the problem and solution of low-wage work in the United States.
The punchline, paycheck-wise, is that Uber workers make, on average, $10.87 an hour in compensation, or “the income drivers get after deducting Uber fees and vehicle expenses and the mandatory extra Social Security/Medicare taxes that self-employed drivers must pay.” (The fact that Uber drivers, along with most on-demand workers, are self-employed contractors is an important part of the problem.) Their wage, net of any benefits, is $9.21 an hour, which puts them at the 10th percentile of the wage distribution and below the minimum wage in many of the places they drive.
Moreover, Mishel points out that Uber drivers usually work part time (17 hours per week, on average) and part year (an average of three months