Governments Reacting to the Failures of the Gig Economy

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According to economists the economy is the labour market is fine as unemployment is relatively low. The truth is different from the on-paper measurements. High employment numbers don’t mean much if the jobs don’t pay well and the working conditions are miserable. The modern “gig economy” is to blame for this counterintuitive economic situation. Governments are starting to catch on that these “modern” jobs aren’t nearly as beneficial to workers or the economy as more traditional jobs were. As a result new laws are being passed to prevent workers from being exploited by the likes of Uber and other gig economy giants.

AB 5’s reclassification provision would also allow gig workers to unionize, granting them a modicum of protection. Big Tech greeted previous unionization efforts with outright hostility. In November, Google publicly fired five engineers involved in union activity. Other companies, like Uber, use antitrust law to bar drivers from collective action to address their concerns.

A more radical approach would be to break up the Big Tech monopolies that have such a tight grip on California and its economy, making it more difficult for these companies to dictate the terms of employment. Presidential candidates such as Bernie Sanders and Elizabeth Warren have vowed to dismantle giants like Facebook and Google if elected. Sanders’s plan, arguably the most ambitious, would order companies to offer workers more benefits and higher wages and pensions. Workers would also need to make up at least 45 percent of companies’ board memberships, ensuring that they would have a seat at the table when executives make decisions that affect their livelihood.

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