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We're setting the job market back 200 years

With the rise of on-demand jobs like Uber, we're reverting back to a 19th-century job market where 'freedom  of contract' ruled the day. It was an era when many workers were 'happy' to toil 12-hour days in sweat shops for lack of any better alternative. 

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Mel Evans/AP
Taxi drivers carry signs as they gather outside the State House to demand regulation for ride sharing companies, Monday, Feb. 9, 2015, in Trenton, N.J. Reich argues that the US job market, with the rise of part-time and contract, has reverted back to the 19th century.

My recent column about the growth of on-demand jobs like Uber making life less predictable and secure for workers unleashed a small barrage of criticism from some who contend that workers get what they鈥檙e worth in the market.

础听Forbes Magazine聽contributor, for example,聽聽that jobs exist only 聽鈥渨hen both employer and employee are happy with the deal being made.鈥 So if the new jobs are low-paying and irregular, too bad.

Much the same argument was voiced in the late nineteenth century over alleged 鈥溾 Any deal between employees and workers was assumed to be fine if both sides voluntarily agreed to it.聽

It was an era when many workers were 鈥渉appy鈥 to toil twelve-hour days in sweat shops for lack of any better alternative.聽

It was also a time of great wealth for a few and squalor for many. And of corruption, as the lackeys of robber barons deposited sacks of cash on the desks of pliant legislators.

Finally, after decades of labor strife and political tumult, the twentieth century brought an understanding that capitalism requires聽of decency and fairness 鈥 workplace safety, a minimum wage, maximum hours (and time-and-a-half for overtime), and a ban on child labor.

We also learned that capitalism needs a fair balance of power between big corporations and workers.聽

We achieved that through antitrust laws that reduced the capacity of giant corporations to impose their will, and labor laws that allowed workers to organize and bargain collectively.聽

By the 1950s, whenof private-sector workers belonged to a labor union, they were able to negotiate higher wages and better working conditions than employers would otherwise have been 鈥渉appy鈥 to provide.

But now we seem to be heading back to nineteenth century.

Corporations are shifting full-time work onto temps, free-lancers, and contract workers who fall outside the labor protections established decades ago.

The nation鈥檚 biggest corporations and Wall Street banks are larger and more potent than ever.聽

And labor union membership has shrunk to fewer than 7 percent of private-sector workers.

So it鈥檚 not surprising we鈥檙e once again hearing that workers are worth no more than what they can get in the market.

But as we should have learned a century ago, markets don鈥檛 exist in nature. They鈥檙e created by human beings. The real question is how they鈥檙e organized and for whose benefit.

In the late nineteenth century they were organized for the benefit of a few at the top.聽

But by the middle of the twentieth century they were organized for the vast majority.

During the thirty years after the end of World War II, as the economy doubled in size, so did the wages of most Americans 鈥 along with improved hours and working conditions.

Yet since around 1980, even though the economy has doubled once again (the Great Recession notwithstanding), the wages most Americans have stagnated. And their benefits and working conditions have deteriorated.聽

This isn鈥檛 because most Americans are worth less. In fact, worker productivity聽is聽聽than ever.聽

It鈥檚 because big corporations, Wall Street, and some enormously rich individuals have gained political power to organize the market in ways that have enhanced their wealth while leaving most Americans behind.

That includes聽聽protecting the intellectual property of large corporations and Wall Street鈥檚 financial assets, but not American jobs and wages.

Bailouts of big Wall Street banks and their executives and shareholders when they can鈥檛 pay what they owe, but not of homeowners who can鈥檛 meet their mortgage payments.聽

Bankruptcy protection for big corporations, allowing them聽 to shed their debts, including labor contracts. But no bankruptcy protection for college graduates over-burdened with student debts.

Antitrust leniency toward a vast swathe of American industry 鈥 including Big Cable (Comcast, AT&T, Time-Warner), Big Tech (Amazon, Google), Big Pharma, the largest Wall Street banks, and giant retailers (Walmart).

But less tolerance toward labor unions 鈥 as workers trying to form unions are fired with impunity, and more states adopt so-called聽聽that undermine unions.聽聽

We seem to be heading full speed back to the late nineteenth century.聽

So what will be the galvanizing force for change this time?

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