Compared to other countries, American households still make a good living, despite rising healthcare costs, globalization, technological change, and the decline of unions. According to the Pew Research Center, over half of American households occupy the world’s highest income bracket, living on more than $50 per day.
But if you look at America as a whole, many people express dismay at the decline in employment prospects and the rise of contractor work in the new so-called “sharing economy.” Attempting to harness popular anger over the issue, and capture some of that Bernie Sanders passion, Hillary Clinton is expected to publicly express skepticism over the social value of companies like Uber and Airbnb.
Many people use Uber and Airbnb to make some money on the side, but the cost of this, economists argue, is the displacement of more stable industries like traditional taxi and hotel companies. Those industries are less flexible than tech startups, and therefore ripe for “disruption” and “innovation.” But are the companies getting rich off the backs of their employees? Well, they don’t even have employees, technically speaking.
If you drive for Uber, rent your rooms using Airbnb, or have a part-time job that offers some flexibility in your work schedule, you’re probably not an employee, but an independent contractor. That’s a classification that Uber drivers have successfully challenged in court, obliging the company to pay drivers’ expenses and a majority of their social security taxes. Once classified as employees, workers are also eligible to receive unemployment benefits.
But not everyone agrees that the “employee” v. “contractor” debate is worth having. At the Harvard Business Review, John Boudreau argues that our focus on “jobs” has come at the expense of “work.” Talking about jobs, he argues, presumes everyone wants the stability that traditional full-time employment provides, “yet, a study of 33,000 employees in 26 countries showed that independent workers were more satisfied, innovative, and engaged with their clients than regular employees, even those regular employees designated as high potentials.”
No matter what words we use to label workers, equality and security will remain central concerns. Will the Sharing Economy really share wealth as well as goods, or will it create a class of super-rich individuals? And in a more flexible labor environment, will families have the financial security necessary to raise a family, i.e., dependably spend lots of money on tiny people who cannot legally earn an income?
Jaron Lanier, a computer scientist, composer, visual artist, and author, argues that the sharing economy must benefit everyone and not merely entrench the super-rich who design the technology that supports it.
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