[Marxism] Will the Gig Economy Prevail?

Louis Proyect lnp3 at panix.com
Sun Dec 1 12:59:10 MST 2019


LRB, Vol. 41 No. 23 · 5 December 2019
What counts as work?
Katrina Forrester

Will the Gig Economy Prevail? by Colin Crouch
Polity, 140 pp, £9.99, February, ISBN 978 1 5095 3244 5

Employment contracts are by their nature asymmetrical. Although in 
principle contracts are made between two free and equal parties, when an 
employee signs one they enter into an unequal relationship. Work can be 
a source of identity, a prerequisite for social inclusion, and a marker 
of status and independence; historically, the employment contract has 
been contrasted with slavery, bondage and other forms of servitude. But 
workers’ movements have long argued that waged labour in general implies 
a kind of wage-slavery: it dominates as well as exploits. At the very 
least, it sets up a hierarchical relationship: having a job means being 
under the authority of an employer. Struggles for better working 
conditions – for proper remuneration, trade union representation, 
protection against discrimination, the right to time off for leisure, 
parenting or sickness – aim to mitigate the essential inequity of the 
employment contract and limit the power of the boss.

According to the sociologist Colin Crouch, the gig economy provides a 
new way of concealing employers’ authority. People who work for such 
online platforms as Uber, Lyft and Deliveroo are classed not as 
employees but as self-employed. They are supposedly flexible 
entrepreneurs, free to choose when they work, how they work and who they 
work for. In practice, this isn’t the case. Unlike performers in the 
entertainment industry (which gives the ‘gig’ economy its name), most 
gig workers don’t work for an array of organisations but depend for 
their pay on just one or two huge companies. The gig worker doesn’t 
really have much in common with the ideal of the entrepreneur – there is 
little room in their jobs for creativity, change or innovation – except 
that gig workers also take a lot of risks: they have no benefits, 
holiday or sick pay, and they are vulnerable to the whims of their 
customers. In many countries, gig workers (or ‘independent contractors’) 
have none of the rights that make the asymmetry of the employment 
contract bearable: no overtime, no breaks, no protection from sexual 
harassment or redundancy pay. They don’t have the right to belong to a 
union, or to organise one, and they aren’t entitled to the minimum wage. 
Most aren’t autonomous, independent free agents, or students, 
part-timers or retirees supplementing their income; rather, they are 
people who need to do gig work simply to get by.

What is new about the gig economy isn’t that it gives workers 
flexibility and independence, but that it gives employers something they 
have otherwise found difficult to attain: workers who are not, 
technically, their employees but who are nonetheless subject to their 
discipline and subordinate to their authority. The dystopian promise of 
the gig economy is that it will create an army of precarious workers for 
whose welfare employers take no responsibility. Its emergence has been 
welcomed by neoliberal thinkers, policymakers and firms who see it as 
progress in their efforts to transform the way work is organised.

‘Standard employment’ is the formal name given to a non-temporary, 
full-time job secured by a contract. Today, the share of ‘non-standard 
employment’ in the labour market is growing. There are many kinds of 
non-standard and informal work, from self-employment to the unstable, 
unregulated and illegal work of the shadow economy. It takes different 
forms in different countries. In the UK, on-call contracts (whereby 
workers are on standby and can be called in to work at any time, even 
for short stints) and zero-hours contracts (whereby employers aren’t 
obliged to guarantee even a minimum number of working hours) are 
popular: an estimated 900,000 people worked under such arrangements in 
2017. Across Europe, too, there has been an increase in ‘marginal jobs’ 
and in the use of contracts that expire before workers acquire full 
rights, like Germany’s ‘minijobs’ and ‘midijobs’ (which provide short 
hours and low pay, but are enough to disqualify workers from claiming 
unemployment benefits). At the same time, in advanced economies, the 
rights of ‘standard employees’ have been steadily eroded. Insecurity is 
the general condition of modern work.

*

Historically speaking, standard employment has been the norm only 
briefly, and only in certain places. Until the ‘industrious revolution’ 
of the 18th century, work was piecemeal. People worked where they lived, 
on the farm or at home: in the ‘putting-out system’ – which still exists 
in cloth production in parts of the global South – manufacturers 
delivered work to workers, mostly women, who had machinery at home and 
organised their work alongside their family life. Then work moved out of 
the home. Over the next two centuries, the workforce was consolidated 
into factories, then into offices. Waged work was standardised, then 
became salaried. When large numbers of people were brought together so 
that labour could be divided and supervised, unions gained bargaining 
power. New aspects of the employment relationship were subject to 
government scrutiny: pay, living standards, the responsibility of 
employers to contribute directly to the support of their employees 
through a system that came to be known as social insurance. As workers 
gained more rights, standard employment was ‘enriched’ with benefits.

At its postwar peak, enriched employment was a model of social 
democracy, providing generous benefits, union recognition, worker 
representation and consultation, and in some countries (such as Belgium 
and France) job protection. After the Second World War, Attlee’s Labour 
government embarked on a campaign to decasualise work through a social 
insurance system that would include all employees. But the most generous 
benefits were always limited in scope: unlike government-funded social 
assistance – which can be universal or means-tested but goes to the 
population at large – social insurance schemes provide benefits only to 
those who have made contributions, usually through waged work. In 
Britain, social insurance excluded non-workers and those in casual 
employment (since the point was to eliminate it). The paradigmatic 
wage-earner was taken to be a man with a family. In the US, key labour 
settlements excluded agricultural and domestic workers (groups that 
included many African-Americans and immigrants), and later limited the 
power of unions, which accepted no-strike clauses in return for a 
minimal safeguarding of job security.

Since then, standard employment has been eroded. In the 1960s and 1970s, 
unions gathered strength before being significantly weakened by 
commodity price inflation crises and the move towards the free market, 
which threatened the aspiration to full employment. The world of the 
steady job, it turned out, contained the seeds of its own decline. 
Today, standard employment is no longer enriched to the same degree, 
even when it is available. Union membership has declined, particularly 
in Anglophone countries. Labour markets have been deregulated, the 
protections offered by collective bargaining agreements weakened, and 
employers have fewer obligations to workers. A quarter of all employment 
in the OECD countries for which data is available is precarious (the 
figure would be higher if the shadow economy could be measured 
accurately). Novel forms of precarity are multiplying. Agriculture 
accounts for a smaller proportion of precarious labour than it once did 
(though much agricultural work is performed by migrants, who are often 
the most precarious workers of all), but involuntary part-time and 
temporary work is rising, especially in countries affected by the 
Eurozone crisis. In Italy, 12 per cent of total employment is 
involuntarily part-time and temporary; the figure is more than 5 per 
cent in at least ten OECD states.

Even if standard employment turns out to be the historical exception, 
the erosion of workers’ security doesn’t mark a return to the capitalism 
of the Gilded Age. Modern precarity takes a distinctive form, which is a 
result of the major political and economic changes of the 1970s. As 
Crouch sees it, three of these changes are especially significant. 
First, the shift from a manufacturing to a service economy, 
characterised as deindustrialisation or as the transition from Fordism 
to post-Fordism. As manufacturing declined, the enriched standard 
employment associated with it began to disappear. Second, the rise of 
digital and data technologies, which has made possible the 
intensification of workplace discipline and surveillance as well as new 
ways of working from home – a modern ‘putting-out’ system. The internet 
has enabled monopolies, but it has also decentralised work as well as 
deindustrialised it. Third, workers’ loss of power after the 
deregulation of finance. Under Thatcher and Reagan, corporations were 
reorganised to benefit shareholders, and finance was given the freedom 
to move to more advantageous regimes. Workers had no such freedom, and 
neither did conventional firms, whose buildings, equipment and working 
populations were settled in a particular place. All this changed the 
distribution of risk, to the detriment of workers.

So workers’ rights have declined over the last decades – but unevenly. 
Anti-discrimination law has been strengthened, making the workplace 
rights of women and minorities more robust. The amount of paid parental 
leave has increased in many countries, though it varies wildly: Slovakia 
offers the most generous paid maternity leave in the OECD, at 164 weeks, 
but doesn’t provide for fathers; Japan and Korea offer more than 50 
weeks’ paid leave to both parents; the US offers nothing to either. In 
EU member states overall, there have been improvements in minimum wage 
regulation and in the representation of employees on workers’ councils 
(though changes of this sort are often made in exchange for a ceding of 
union power; in Austria and the Nordic countries, where collective 
bargaining is strong, there is no minimum wage). Crouch argues that the 
rights that have been strengthened tend to be ‘market-enhancing rights’: 
those that encourage participation in the labour market, increasing 
productivity; they are often supported by neoliberal policymakers and 
businesses. The rights that have consistently declined are those that 
reduce the asymmetry of the employment contract.

While women and minorities have more rights than they used to, those in 
precarious work don’t benefit from them, and women are more likely than 
men to be involuntarily in part-time and temporary work. Differences 
between categories of work are easily politicised. Neoliberal critics of 
labour rights see the enriched model of standard employment as the 
problem: on their view, the segregation between a largely white, male, 
secure workforce and a precarious workforce of women, minorities, 
immigrants and the young has come about because of the improvement in 
employment rights and trade union protections – and so the way to end 
the segregation is to get rid of those rights and protections. Others 
see it as having come about through the efforts of social democratic 
parties to protect the privileges of their core constituency (those 
white, male workers), so that ‘modernisers’ wanting to transform their 
party’s base and reputation have sought to repeal job protection laws.

The very existence of a precarious workforce makes it possible for 
steady jobs to be undercut, work contracted out and workers set against 
one another. Crouch believes that the gig economy has a wider 
significance too. He picks out two contradictory models of capitalism. 
Market fundamentalists believe that the aim of capitalism is to achieve 
perfect markets; they reject oligopoly and propagate the the myth of the 
equal contract. Corporate capitalists, by contrast, are in favour of 
oligopoly and don’t care so much about ideal markets; they see the 
relation between employer and employee as closer to a master-servant 
dynamic (much modern labour law legally enshrines obedience to 
managerial authority). What the gig does, in Crouch’s view, is to ease 
the tension between the two models. It promises to fulfil the fantasy 
that we are all free in the marketplace, even in the labour market. When 
workers are no longer defined as employees, their interests are pushed 
outside the corporation altogether. They are also removed from union 
jurisdiction. Unions have, as one would expect, campaigned against the 
encroachments of the gig economy and the erosion of workers’ rights it 
entails. But they have sometimes been reluctant to organise the 
precarious workforce, even though precarious workers are among those 
most in need of union representation. It’s no surprise that, as a 
consequence, many precarious workers see ordinary workers – however 
poorly paid – as privileged; in some countries, Italy for example, they 
even support further labour market deregulation. Unions are starting to 
address this – by looking for ways to organise workers outside 
workplaces, by supporting new organisations led by precarious workers, 
by bringing legal cases to win rights for those workers – but progress 
is slow.

Recently, there have been challenges to Uber, first on grounds of 
customer safety (the app was banned in India), and then, in cases 
brought by drivers, unions and regulators in Brussels, Paris, London, 
Montreal and elsewhere, on grounds of its denial of workers’ rights. 
Opponents of the gig economy have more generally made efforts to have 
‘independent contractors’ awarded the status of employees, with all the 
associated benefits. The new online platforms have resisted these 
changes by exploiting legal nuances. In English law, ‘no employment 
relationship exists if a worker can substitute another person to perform 
the work.’ By this definition, gig workers are self-employed, and so 
forfeit the benefits of the Employment Rights Act of 1996, which 
stipulated the right of workers to the minimum wage, sick pay and 
parental leave, and to be protected against discrimination and unlawful 
deductions from their pay. Of the legal challenges to definitions of 
this sort, the most successful resulted in a ruling made by California’s 
Supreme Court in September, defining workers as employees of a company 
if that company exercised control over their work or if the workers were 
integral to its business. This would mean that Uber and Lyft’s 
‘independent contractors’ would be reclassified as employees. 
Economists, lawyers and sociologists, meanwhile, are trying to establish 
the definition of employer as a controller of workplace behaviour or, 
more capaciously, as a work provider.

If online platforms, as work providers, can be classed as employers – 
after all, they control the work relationship, provide work and pay, and 
profit from workers’ labours – then the privileges they currently enjoy 
would disappear. Such technical discussions of employment law join up 
with the politics of work. To call an activity ‘work’ still confers 
legitimacy on the person performing it, no matter how far workers’ 
rights have been eroded. As manufacturing continues to decline, disputes 
over what counts as work (care work? sex work?) and who can be included 
as a member of the working class (health and education workers? tech 
workers? the precariat? the wageless?) will persist.

*

Will the gig economy last? Crouch thinks the current situation – in 
which unregulated firms exploit a rapidly increasing employment 
asymmetry – may well be unsustainable. Most workers are reluctant to 
give up job security for the ‘independence’ afforded by gig work unless 
they have to – in a slack labour market, for example, where there is a 
surplus of labour. When there is a labour shortage, the balance of power 
shifts to workers; firms start having to guarantee job security. This 
may be happening already. Uber and Lyft workers have recently shown a 
willingness to strike. Both companies are publicly listed, and Crouch 
believes that in order to address investors’ anxieties they may be 
forced to offer workers a better deal.

But things could just as easily move in the other direction: in the 
scramble to maintain stock value, platforms may try to exert downward 
pressure on wages. Even if the ‘independent contractor’ is legislated 
out of existence, firms will continue to try to find ways to use 
precarious labour, not least by continuing to dismantle standard 
employment. In a bleak moment, Crouch predicts that digitalisation will 
cause disturbances at least as severe as in the depression of the 1920s 
and 1930s. Old jobs will be destroyed by technology and new ones 
created, and there will be prolonged surpluses of labour, tilting the 
balance of power even further towards employers. The greater the 
proportion of work and business conducted digitally, the easier it will 
be for firms continually to move their operations wherever they will get 
tax breaks. Rent-seeking, cash-hoarding, tax-evading employers will 
contribute as little as possible to pensions and social insurance, and 
governments will have to pick up the slack, increasing the state’s 
vulnerability to fiscal crisis.

Crouch thinks a major overhaul of policy will be required if we are to 
cope with these transformations. He doesn’t share the enthusiasm for a 
Universal Basic Income or other form of ‘citizens’ wage’ that has gained 
ground both on the left (as a route to autonomy or a rejection of work) 
and on the right (as a way to shrink the state or to secure a modicum of 
stability for people in a world where work no longer pays). As Crouch 
sees it, UBI hollows out the social democratic notion of citizenship as 
a system of rights, responsibilities and duties. He doesn’t want to 
abandon the notion of enriched standard employment but to find ways of 
extending it to the precarious workforce. His main proposal is a reform 
of social insurance, to make it a tax on the ‘use of labour’. Currently, 
only firms that choose to accept their responsibility as employers pay 
towards social insurance. Instead, Crouch proposes, all organisations 
that use labour would have to pay. Firms would no longer be able to 
shrug off their obligations by changing their status as employers, 
relocating, or defining their precarious workers as ‘self-employed’. 
They would have to pay their fair share.

Individual workers would pay their fair share too. Their contribution to 
social insurance would be calculated according to their income rather 
than their employment or citizenship status, and they would receive 
benefits including pensions, disability and sick pay, leave for 
parenting and other care work, as well as job retraining. These benefits 
would be tied to contributions made to the insurance fund, rather than 
being delivered as a form of social assistance drawn from general 
taxation. In lieu of the patchwork of insurance and assistance that 
characterises the British welfare state today, this version of social 
insurance would encourage the belief that you get back from society what 
you put in. Everyone would have an incentive to work, since the benefits 
would be tied to payment of tax on work done (unpaid care work and 
parenting would qualify). If firms treated their workers well – with 
secure contracts, training, union representation – their tax bill would 
be reduced. To make all this stick, unions would have to work not just 
to secure higher wages for their members, but to handle grievances, 
create family-friendly working environments and lead campaigns against 
challenges like the rise of workplace surveillance.

Crouch’s book is a love letter to the postwar welfare state. It is not a 
critique of capitalism, just of its neoliberal variant. Indeed, he makes 
clear that he believes eliminating the gig economy is necessary if 
capitalism is to be saved. The gig economy is a threat to social 
stability, and if it were to prevail, he writes, ‘capitalism’s own need 
for social reproduction would be severely compromised’; capitalism will 
not sustain itself, he argues, unless it can sustain ‘normal, secure 
family life’. He wants to preserve the social democratic institutions of 
family, home and property, along with the separation between home and 
workplace, work and leisure (a traditional, even nostalgic, but also 
perhaps compelling offer at a time when many millennials find it 
inconceivable they might ever own a home). He also values the work 
ethic, the entrepreneurial imperative, the capitalist emphasis on 
flexibility. His ideal society is one in which everybody works and the 
refusal of work is off-limits (revealingly, the only exception he makes 
is sex work; there are surely other forms of work involving at least as 
much exploitation and drudgery). By insisting that work can pay for the 
family rather than imagining a reduction of work for all, Crouch misses 
the chance to imagine a way of living beyond the one we know. He rejects 
the idea that in the future we may need to break the connection between 
work and income – let alone the connection between profit and income. 
What he is striving for is a path to stability. Will this suffice? The 
real question, perhaps, isn’t whether stability is enough, but whether 
the stabilisation of capitalism is all we want.



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