The gig community, which is on a path to quickly becoming a majority, needs the collaborative protection that the labor movement originally provided.
Society has spent more than a century fighting over the value of human labor. In The Wealth of Nations, Adam Smith links a society’s potential for greatness to the removal of inequitable impediments. Smith employs a first principles approach to demonstrate that in a world free of the artificial economies created by the inefficiencies associated with historic trade guilds or government subsidies all value is derived from the world’s true, base currency: an individual’s time.
These concepts were subsequently carried forward into the late 19th century’s neoliberal economic jungle to build the labor protection principles that have been enshrined in our culture ever since. As we see Randian neoliberals engage in union-busting crusades for the purpose of securing the kinds of inequitable impediments enabled by big data that Adam Smith warned us will kill the free market, it is important to realize that it is neither recent leadership inadequacies nor public apathy that have doomed the average labor union. The demise of the labor union is directly tied to a fundamental, intellectual error: believing that a human hour has an intrinsic value.
The modern labor movement grew out of the need to protect the “human robots” who emerged in the 19th century. Much like the robots putting laborers out of work today, when standardization and automation began to creep into industries like shipbuilding, the historic trade guilds had no interest in protecting the low-skilled, immediately replaceable laborers putting skilled craftsmen out of work. In the 18th century, the quality of a pulley block delivered to the Royal Navy was directly related to the skill and experience of the craftsman making it. By the following century, every pulley block became effectively equivalent no matter who made it. This predictability enabled owners to start calculating revenue as a rate. Each hour saw a known number of pulley blocks of a known quality that could be sold at a known price, giving each hour the appearance of an intrinsic value.
Accepting this assumption that each hour has an intrinsic value is killing the labor movement.
The modern labor movement works to protect its members using one commoditized approach: collectively negotiating salary schedules that are applied equally across all of its members and extracting known, long-term commitments from the employer. But because the products produced by these “human robots” were measured in revenue per hour, this approach separated the value of labor from the value of its output. This approach meant that the value produced by a younger member was subsidizing the value extracted by an older member. And this approach meant that, as companies’ commitments are now only as good as their next quarterly earnings report, the labor movement incentivizes members to make plans based on promises that ownership knows it will not keep.
In our gig economy, remuneration is too complex to fit into a salary schedule. Opportunities come and go too quickly for long-term commitments. And big data is not just tipping the scales in favor of large corporations during compensation negotiations, it is systemically driving down compensation values because the individual is comparatively in the dark during compensation negotiations. The gig community, which is on a path to quickly becoming a majority, needs the collaborative protection that the labor movement originally provided. But that protection can no longer come from collective equality at each company. It must come from each gig worker’s efficient application of collectively sourced compensation insight.
Whether or not we like the current state of the world, we no longer work in stable, easily defined groups. We work as individuals who can often represent multiple interests all at the same time. Whether or not we like the current corporate focus on quarterly earnings, we can no longer count on a company we do not control taking the long-term view. We must expect that a commitment longer than 90 days will not be honored. And whether or not we like how we are viewed, we are no longer assets to our companies. We are commodities whose value is found through continual, high-velocity price discovery.
An hour never had an intrinsic value. Each hour is worth what we make of it. And we will only receive what we are able to negotiate for it. To achieve compensation equity, we must decouple work from time, separate our personal needs from our corporate associations and tie compensation to productivity. We must collectively harness big data, which is currently being deployed by employers as an inequitable impediment to the free market for which Adam Smith advocated, to re-level the negotiating table.
As neoliberals continue to prevent collective action taken by the whole that benefits the individual, we must shift our strategy and support the individual for the benefit of the whole, which means we must reconfigure the labor movement accordingly.
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.
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