Portside Date: July 26, 2016

Author: Chris Brooks, Kim Moody

Date of source: July 26, 2016

Labor Notes

Labor Notes: We read a lot about the “gig economy,” where workers cycle through multiple jobs using app-based companies like Uber, TaskRabbit [for everyday tasks such as cleaning or moving], and Mechanical Turk [for online tasks such as labeling images]. Is this really the future of work?

Kim Moody: One thing to notice is that, aside from outfits like Uber, most of these are not employers. They're digital platforms where you can find a job.

The apps are not determining the hours and pay, or even the technology used on the jobs. It’s still employers that are calling the shots. So if jobs are getting worse, it’s not because people can find them digitally as opposed to reading them in the newspaper.

Also, discussions of the gig economy often assume that suddenly there are all these people who are multiple job-holders. But the fact is that the proportion of the workforce who have more than one job hasn’t changed much in 40 years.

The vast majority of them are people with regular full-time jobs who are also moonlighting, which is a very old thing. There are a lot of multiple job-holders, but there have always been a lot of them.

There’s also been talk of the “1099 economy.” Are we really moving towards a future where 40 percent of workers will be freelancing?

The idea that freelancers can become 40 percent of the workforce is science fiction.

There are two kinds of self-employed. The greatest number are the “unincorporated self-employed,” or independent contractors. Their numbers have been dropping for years.

The other group, the incorporated ones, are people who run a small business. They have grown somewhat, but they are still just 4 percent of the workforce.

You argue that the “gig economy” and “precarious work” concepts miss the mark because they don’t get at the most concerning change: the rise of the crappy-job economy. Can you talk about what’s changed for workers and why?

The first change is work intensification. Work has gotten dramatically harder in the last 30 years or so, and continues to.

That’s happened through lean production, which reduces the amount of labor to produce the same or greater amount of product or service and is tied to just-in-time production. Lean production began in the automobile industry in the 1980s, but now it is everywhere. It’s in hospitals, it’s in schools.

Another aspect is electronic and biometric monitoring, measuring, and surveillance, which allow employers to see how to get more work literally out of each minute. Another aspect is that the amount of break time has fallen dramatically since the ’80s.

Whether you are working full-time or part-time, in a precarious job or not, chances are you are going to experience some of this.

The other side is income. Wages have been falling since the early 1970s. More and more people are actually working for less, in real terms, than they used to. This also impacts everybody, although part-time and precarious workers are likely to get paid even less than full-time people.

And if you look at the Bureau of Labor Statistics projections for the fastest-growing jobs, millions of new jobs over the next decade or so, 70 percent are projected to be low-skill, low-pay jobs.

In other words, we are not heading for some big high-tech economy. Instead we are heading for a low-paid workforce with crappy jobs. The end of good jobs is nigh.

While app-based “just-in-time” gigs have gotten lots of media attention, far less attention has been paid to “just-in-time” production. Can you talk about why massive logistics hubs have emerged, and what they mean for union organizing?

In order for globalization to be efficient, low pay isn’t necessarily enough, because you have to move products from one location to another. That required a change in the way products are moved—the “logistics revolution.”

The time it takes to deliver a product to the point of sale is an important factor in competition. Like production, transportation now operates on a just-in-time basis. Products move faster.

The speed of trucks, planes, and trains did not change. What did was the way things are processed. Goods don’t stay in warehouses very long. Products arrive on rail and are cross-docked and moved out by truck in a matter of hours. This process has really only taken shape in the 21st century.

In order to make it work, the industry has created logistics clusters. These are huge concentrations of warehouses where rail, truck, air, and water transportation meet and can be coordinated, usually electronically.

You might think, “Well, this is all very high-tech.” But it turns out that it still requires thousands and thousands of workers. In the U.S. there are 60 of these clusters, but three stand out: the Port of New York and New Jersey, the Los Angeles and Long Beach port area, and Chicago. Each of these employs, in a small geographic area, at least 100,000 people.

Now, the whole idea of outsourcing back in the 1980s was to break up the concentrations of workers in places like Detroit, Pittsburgh, or Gary. But what these companies have done now, inadvertently, is to recruit incredibly massive concentrations of manual laborers.

It has evolved in a way that might shoot these companies in the foot—because here you have the potential to organize vast numbers of poorly paid workers into unions. And there are attempts to do just that.

The other thing is that these clusters are tied together by just-in-time systems—which means you have hundreds, maybe thousands, of points in the transportation system that are highly vulnerable. If you stop work in one place, you are going to close down huge areas.

Grind to a Halt

The vulnerability of “just-in-time” production was on display recently at General Motors.

Clark-Cutler-McDermott Co., which provides parts for almost every GM vehicle produced in North America, filed for bankruptcy in June.

But with no inventory on hand and no alternative source of supply, GM warned that a shutdown at this supplier would halt its vehicle production across the continent within a day—and every day the shutdown lasted, the company would lose millions of dollars.

GM scored a temporary restraining order, forcing Clark-Cutler-McDermott to continue production while the automaker sought out other suppliers.

Ford faced a similar issue in May when the all-temp workforce at its Detroit Chassis parts plant in Ohio threatened to strike, which could have halted production at a nearby Ford factory within a day. The employer quickly agreed to recognize their union.

—Chris Brooks

Media commentators and even presidential candidates blame the loss of millions of U.S. manufacturing jobs on trade and outsourcing. You’re skeptical. How do you explain it?

Outsourcing, if it is in the U.S.—which most of it has been—can break up the union, it can be very inconvenient to the people who lose their jobs, but it doesn’t necessarily eliminate jobs in the U.S. The jobs are just moved to a different, lower-paid group of workers.

Offshoring is another thing, but it’s not as widespread as people think. While moving production abroad has definitely impacted certain industries like steel, textile, and clothing, it cannot account for the loss of jobs we have seen. I estimate that between a million and 2 million jobs have been lost since the mid-’80s to imports and offshoring.

Manufacturing output, from the 1960s to just before the Great Recession in 2007, actually grew by 131 percent; the manufacturing sector more than doubled its output. If everything was going abroad, you couldn’t possibly have that kind of growth.

How can this be? I believe the answer lies in lean production and new technology, as we talked about earlier. Productivity literally doubled, and manufacturing jobs dropped by 50 percent or more. It’s the productivity increase that explains the loss of jobs.

It is very difficult for politicians to deal with this question, because it means attacking employers. It means saying, “You are taking too much out of your workforce.” And of course since most economists, politicians, and experts think that productivity growth is a wonderful thing, it’s beyond criticism.

There’s a lot of hand-wringing about the future of automation. Former Service Employees President Andy Stern has been making the media rounds claiming that driverless trucks are going to replace millions of drivers.

You can sell a lot of books with this pop futurology. It reminds me of the great automation scare of the 1950s. It was popular then to make predictions that there wouldn’t be any factory workers left.

And automation has reduced the number of factory workers, but there are still 8 or 9 million of them lingering around—despite all this technology, which is much greater than anything they predicted in the ’50s.

I have a shelf of books predicting “the end of work.” And yet we have millions more workers than we used to—the problem being that they are worse off than they used to be, not that they don’t exist.

There’s more! We also asked Kim Moody about workforce demographics and outsourcing to the South. Stay tuned for Part 2.

A version of this article appeared in Labor Notes #449, August 2016. Don't miss an issue, subscribe today.