The Erosion of Labor Rights in the Gig Economy
Being your own boss ain't all it's cracked up to be.
We all live in the gig economy. Many of us work in it, too. And itβs easy to see the appeal at a glance: βBe your own boss. Set your own hours. Build your business from scratch, and reap the benefits.β Who wouldnβt want those things?
Problem is, the gig economy sets workersβ rights back about a full century.
(Lack of) labor rights in the late 19th and early 20th centuries
During the industrial revolution, workers were subjected to horrendous conditions: long hours, poor safety, and child labor were rampant. In response, early labor movements began to coalesce, demanding better conditions and fair treatment for workers.
The Factory Act of 1833 was one of the earliest pieces of labor legislation, aimed at regulating child labor and working conditions in textile factories in the UK. The act limited the working hours for children and required factories to have safety measures, setting the stage for future labor regulations.
The Triangle Shirtwaist Factory fire of 1911 was a tragic event that led to substantial reforms in the United States. The fire resulted in the death of 146 garment workers, mainly young women, due to inadequate safety measures. Public outcry led to significant changes in labor laws, including stricter building codes and labor protections, illustrating the powerful role that tragedy can play in spurring reform.
The Fair Labor Standards Act (FLSA) in 1938 was a monumental piece of legislation in the United States that established minimum wage, overtime pay, and child labor standards. It laid the foundation for modern labor rights and has been amended several times to extend protections to more workers.
Labor unions played a crucial role in improving the conditions of workers throughout the 20th century. Collective bargaining agreements negotiated by unions led to higher wages, safer working conditions, and job security. For example, the United Auto Workers (UAW) union in the United States helped automotive workers secure better wages, benefits, and working conditions, demonstrating the power of organized labor.
In Europe, labor movements have been instrumental in establishing strong social safety nets, including universal healthcare, generous parental leave, and unemployment benefits. Countries like Sweden and Germany are often cited as examples of the positive impact of strong labor movements on workers' rights and social welfare.
The idea of an eight-hour workday and the weekend was not easily accepted by the capitalist society of the late 19th and early 20th centuries. Employers and industrialists, who had a vested interest in maximizing productivity and profit, saw the demands for shorter workdays as threatening the very foundations of the industrial economy.
The common workday was often 10 to 16 hours long, six days a week, leaving workers with little time for rest, family, or personal growth. Employers argued that reducing work hours would lead to economic collapse and disrupt the progress of modern industrial civilization.
Despite the resistance, labor movements persisted in their demand for an eight-hour workday. One of the most iconic moments in this struggle was the Haymarket Affair of 1886 in Chicago. A peaceful rally in support of striking workers led to a confrontation with police, and ultimately, the event turned tragic when a bomb was thrown into the crowd. Several people, including police officers, were killed.
Although the push for an eight-hour workday had been underway before Haymarket, the event galvanized national attention and eventually contributed to the labor reforms that followed.
The idea of a weekend β two days off at the end of the workweek β was also a revolutionary concept. Labor movements pushed for this to allow workers time for leisure, religious observance, and family.
The Ford Motor Company was one of the first major companies to adopt a five-day, 40-hour workweek in 1926, and others gradually followed. Contrary to employers' fears, the reduced workweek did not lead to the collapse of industrial civilization but rather contributed to increased productivity and worker satisfaction.
Over time, the eight-hour workday and the weekend became more accepted and even institutionalized through laws and regulations. The Fair Labor Standards Act in the United States, for example, codified the eight-hour workday and established overtime pay for additional work, setting a precedent for labor rights that many other countries would follow.
Despite initial resistance, the eight-hour workday and the weekend have become cornerstones of modern labor rights, actually boosting productivity and contributing to a more balanced society.
The nature of work in todayβs gig economy
One of the defining features of the gig economy is the contractual or temporary nature of the work. Unlike traditional employment, which often involves a long-term commitment and job security, gig work is generally project-based or task-specific.
This means that workers are usually hired for a particular job or a short period and are not considered employees of the company they work for. As such, they lack the long-term benefits and protections afforded to standard employees. The nature of gig work appeals to those seeking flexibility but poses many risks for people seeking stable employment and financial security.
Gig economy jobs offer a wide variety of pay structures, from per-task payments to hourly rates to commission-based earnings. For example, ride-share drivers may be paid per ride, freelance writers might earn per article, and salespeople may work solely on commission.
While this can offer the potential for high earnings during peak times, it also creates an income instability that many find challenging. Unlike a traditional job with a consistent salary, gig workers often experience dramatic fluctuations in their earnings, making financial planning more difficult.
The lack of a long-term employment contract is a critical characteristic that differentiates gig work from traditional employment. Gig workers are generally classified as independent contractors, which means they are responsible for their own taxes, health insurance, and other benefits that would typically be covered or subsidized by an employer.
This classification has far-reaching implications for workers' rights and social protections, leaving many gig workers vulnerable to financial and health risks.
One of the most contentious issues in the gig economy is the legal classification of workers. In the United States, many gig economy companies classify their workers as βindependent contractorsβ rather than βemployees.β This classification enables companies to sidestep many labor laws and obligations such as minimum wage, overtime pay, and benefits like health insurance.
This aspect has been scrutinized and critiqued for potentially exploiting workers, denying them rights and benefits they would otherwise be entitled to as employees.
In short, gig labor has created loopholes in the worker protection legislation our ancestors fought for in the early 20th century. A company isnβt allowed to make employees work 12-hour days or seven-day weeks. An employer canβt deny employees paid leave or health benefits. But as long as those workers are laboring βvoluntarilyβ as βusersβ of an app, then theyβre not technically employees β even when theyβre working full-time, or more than full-time, for a company like Uber or DoorDash.
This loophole has set labor rights back a full 100 years. Many βvoluntary usersβ working overtime to put food on the table are just as unprotected as laborers in 19th century factories were. The good news is, laborers and lawmakers around the world are waking up to this reality, and are demanding change.
Recent legislation and court battles
One of the most notable legal battles in the United States regarding gig workers was California's Proposition 22. Passed in November 2020, Proposition 22 allows companies like Uber and Lyft to continue classifying their drivers as independent contractors, rather than employees.
The proposition passed after companies invested millions in a campaign to secure its approval. While it does provide some benefits like a minimum earnings guarantee and vehicle insurance, critics argue that it falls far short of the protections and benefits that employment status would confer. As a result, many states are now discussing adding mandatory protections for gig laborers to their legislation.
In addition to Proposition 22, several lawsuits and regulatory challenges have taken aim at reclassifying gig workers as employees. For instance, the UK's Supreme Court ruled in 2021 that Uber drivers should be classified as "workers," entitled to minimum wage and other employment benefits, a landmark decision that could set a precedent for other countries.
When compared to other countries, however, the United States lags behind in labor protections for gig workers. In European nations like France, Germany, and the UK, the legal systems are more geared toward worker protection. For example, in 2020, France's highest court ruled that an Uber driver should be considered an employee, not an independent contractor, and ordered Uber to pay $18 million in damages β setting a significant precedent for gig workers in the country.
Similarly, some Scandinavian countries like Sweden and Norway have incorporated gig workers into their robust social welfare systems, offering a broader range of benefits and protections.
What you can do to help
It's imperative for society to reevaluate how it perceives different forms of labor. The erosion of labor rights in the gig economy is not just a legal issue but a societal one, raising fundamental questions about how we value work and workers. By putting short-term gains or conveniences over long-term sustainability and fairness, we run the risk of creating an economy that's increasingly divisive and exploitative. It's time for a collective rethinking that values all labor β be it traditional employment or gig work β as deserving of fair compensation, dignity, and protection.
The gig economy affects us all, either as consumers, workers, or members of a community. Here's how you can make a difference:
Stay informed: Knowledge is power. Keep up to date with the latest studies, legislation, and news surrounding gig work. Use this information to inform your decisions and conversations.
Support gig worker movements: Whether it's joining a protest, signing a petition, or simply sharing information online, your voice adds to the collective strength of those fighting for gig worker rights.
Advocate for policy changes: Reach out to your representatives, engage in public discourse, and vote for policies that protect workers in the gig economy. Your advocacy can contribute to legislative changes that extend labor rights and protections to gig workers.
By taking these steps, you're not just supporting gig workers β you're contributing to the creation of a fairer, more equitable society for everyone.
Studies on the economic and health impacts of the gig economy
βUber Happy? Work and Well-being in the βGig Economyββ (University of Oxford) β This economic study found that while Uber drivers value the flexibility of their work, they also face challenges like income volatility and lack of benefits.
βAlgorithmic Labor and Information Asymmetries: A Case Study of Uberβs Driversβ (International Journal of Communication) β This report delves into how Uber drivers feel controlled by the company's algorithms, contradicting the marketed idea of complete freedom and autonomy.
βThe Gig Economy and Contingent Work: An Occupational Health Assessmentβ (Journal of Occupational and Environmental Medicine) β This study points out the physical and mental stresses that gig economy workers, including food deliverers, face due to the nature of their work
βThe Gig Economy: Research and Policy Implications of Regional, Economic, and Demographic Trendsβ (Brookings Institution) β This study looks at how freelancers on platforms like Upwork have to deal with high fees and maintain client ratings, often creating stress and job insecurity.