Algorithms Are Replacing Unions As The Champions of Workers

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Algorithms Are Replacing Unions As The Champions of Workers

Quality of life is perhaps the single largest factor underpinning human happiness, and that quality is largely determined by one’s job. It should be no wonder then that so many activists and politicians have made improving work a key element of their advocacy for generations. The history of America is, in many ways, the history of work.

So when I look around the world today and observe who are the next champions of workers, I surprisingly don’t see them where you would normally expect. Unions were once the bastions of progressive improvements for labor, but they have been relegated to defending the status quo and are facing serious irrelevance in the United States today. Politicians as well seem almost ignorant of the changes underway in our economy, proposing laws that do little to help people and everything to help their campaign donors.

They have been replaced. The people with the most potential to fundamentally improve our jobs over the next ten years are in fact much more familiar to us. With the rise of the On-Demand Economy, Silicon Valley is taking the lead on building a better environment for work. Through labor marketplaces and mobile apps, we are creating a world where workers are fundamentally in control of their economic lives, while simultaneously questioning society’s deep-seated notions of what work should look like.

The algorithm today could do for workers what unions did in the 19th century: provide a vastly improved market for work, one that is simultaneously more convenient, safe, and lucrative. For a region that deeply loves its technology, we are witnessing the first time that engineers and founders are engaging on truly human issues, and the potential is limitless.

I have certainly been a critic of this movement over the past few months, describing Silicon Valley as “Public Enemy #1”, debating the ethics of labor marketplaces as well as critically analyzing the Valley’s forays into both credentials and education. Such criticism is incredibly important, because it sets the boundaries for what is fair and just in these systems, and the stakes are high for workers who are relying on startups for their livelihoods.

But criticism itself cannot substitute for a real vision on how to improve our jobs. The rise of the on-demand village economy, while not without controversies, has been an absolute boon for workers. Uber and Airbnb are the most prominent examples here, but dozens of others are in the early stages of building their own services. If we can continue the momentum, there is an opportunity to fundamentally rewrite society’s rules about work and talent for the better.

Two-Sided Convenience in the On-Demand Economy

At the heart of this movement is the right of workers to choose how and when they work. Uber, for instance, doesn’t require strict hours for drivers, instead letting them choose schedules that match their needs. If a driver wants to take a two-hour lunch break or pick up their kids after school and only work late mornings and evenings, the system provides them the flexibility to do that. Carefully-tuned algorithms provide incentives through prices to ensure that the market is meeting the demand of customers and workers. The same flexibility holds true for most on-demand startups including TaskRabbit, Postmates, oDesk, Crew, and Guru.

Such convenience used to be the exclusive preserve of elite talent. Professionals like lawyers, doctors, engineers and consultants have had the flexibility in their work to take vacations and use “flex time” policies for many years now. Such policies make it easier to do everything from building a family to improving one’s skills through education.

Flexibility isn’t just about convenience, though, it’s also about health. One of the most celebrated studies in public health is known as the Whitehall study, which investigated the social determinants of health. Researchers at University College London tracked a cohort of civil servants at Whitehall, the administrative center of England, to analyze a host of factors including how job function at work correlated with health.

Given all of these changes, it’s disappointing — albeit unsurprising — to see that unions are embracing old modes of work rather than adapting to this new world.

Their results are extensive, and it’s worth reading all of the studies that have come from this research. But one simple conclusion was that control over one’s work dramatically reduced stress at home, leading to significantly better health outcomes. Workplace flexibility can literally extend a worker’s life expectancy.

Ironically, this improvement to the condition of workers used to come from unions, which staunchly advocated for an eight-hour workday as part of their historical labor platforms. The concept of “the weekend” is actually a quite recent innovation, as is the idea of paid medical and parental leave time. Unions, working in concert with companies and other activists, constructed an image of full-time employment with breaks and a retirement at the end, a conception of work we have had for almost a century and widely held by the generation now holding political office.

These days, there is a substantial challenge to this model from students and younger workers in the workforce who hold very different values than previous generations. They are more likely to pursue “passion careers” and thus, they desire a job that is flexible and pays decently well to allow their other goals to succeed. They also want a job that is more “fun,” and many startups have rebuilt old ways of doing work to provide more engagement. Lyft, for instance, encourages its drivers to have conversations with passengers to break the silence.

Perhaps most importantly, younger workers value these characteristics of jobs even more than they value higher salaries. This can seem like heresy to the parents of these younger workers, but my generation has also seen what cutthroat competition and a persistent focus on material acquisition has done to our parents’ generation. We don’t want to simply repeat history.

The New Talent Market

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There is a long-tail to labor markets that startups are finally exploiting. Maybe I want to do a mix of cooking, Egyptian hieroglyphic travel blogging, and some regression analysis of health data. In the past, that would mean getting a job in marketing and living a corporate life until such time that one could quit and pursue their interests. Today, it is entirely possible to stitch together a set of opportunities to bring all of those passions together.

Startups are facilitating a much greater diversity of work options, allowing everyone to choose the right mix of passion, salary, engagement, flexibility, and performance that meets our needs. As much as modern economic theory promotes specialization, the reality is that few people want to specialize in one topic and be ignorant of the rest.

Startups move at the speed of light, and iterating on a product when someone’s livelihood depends on it is always going to elicit vituperative feedback.

The ability to integrate multiple types of knowledge is increasingly valuable in our economy, and this new talent market is facilitating the creation of high-impact, high-value workers. The economy has always had what might be called “long-tail jobs,” but now we have the ability to match those positions with equally long-tail workers.

Perhaps most importantly, workers have the ability to develop their own personalities and brands, an issue that has deeply resonated with me in the past. One of the most insidious ways that employers prevent workers from advancing in their careers is preventing them from having their own voice and being recognized for their accomplishments. Now, startup labor marketplaces are including computational trust and reputation systems from the beginning, ensuring that employers and employees have an incentive to work together and share credit.

We have wanted to see this world built for quite some time, but only recently have we had the algorithms and tacit knowledge to build effective systems. Trailblazing websites like Elance were launched before the dot-com crash, and had to rapidly learn the intricacies of reputation systems, global work management, and payments. Now, such knowledge is much more commonplace, or even better, provided through services by other companies like payment-processors Stripe and Balanced.

Perhaps the best part of this new world is that these algorithms will compete against each other for talent. There has been much debate about Uber and how well its drivers are actually paid, particularly on its ridesharing service UberX. But that discussion blurs an important point: drivers always have the ability to work for other companies, or even to join incumbent taxi companies if they pay better or offer a superior work environment. If Uber’s wages are low compared to the industry average, its drivers will move to competitors. Indeed, many drivers already use multiple apps, providing a strong supply signal to companies about what workers will accept.

Given all of these changes, it’s disappointing — albeit unsurprising — to see that unions are embracing old modes of work rather than adapting to this new world. One of the most prominent unionization attempts in recent memory has centered on the fast-food industry, with unions and activists recently holding a nationwide protest. Yet, a new breed of on-demand food startups has the potential to rebuild fast-food as we know it while vastly improving the lives of workers.

At universities, there is a similarly growing movement to unionize adjunct teachers, graduate students, and even college sports players. Yet, here again, we see a cause that is fighting against the innovative trends in the industry. Students now have the ability to take courses on-demand with the rise of massively-open online courses (MOOCs), and this new technology has the potential to completely transform the way that the modern university is operated.

Unionization efforts are not unfair — fast-food workers and adjunct lecturers are poorly paid and face deeply insecure employment prospects. But trying to mobilize these groups misses a wider point about the future of our economy and the role that technology is playing in it.

We need to improve the future, not the past. Massive advancements in computing, artificial intelligence, and communications are causing the obsolescence of millions of jobs, just in the United States alone. Even Uber drivers are not immune from these displacements, given that we may only be a few years away from the production of autonomous cars. We are reaching a point where, frankly, we don’t need everyone to work a forty or sixty-hour workweek.

It’s time for society to confront this situation head on, rather that trying to eke out a couple more cents from an antiquated full-employment system. We need to further uncouple quality of life from work, so that people can live great lives with only fifteen or twenty hours of work per week. We have had this tremendous improvement to productivity in the economy over the past two decades, and it is well past time that is showed up in our jobs.

All is Fair with Challenges and Criticism

Of course, such systemic issues are going to take significant time to debate. American culture deeply valorizes work, and so the idea that someone should be living comfortably with only a day or two’s worth of work seems alien. We simply can’t wait for our entire culture to adapt to this new talent market before ensuring that workers are protected. There’s a lot at stake.

Criticism of on-demand startups has been brutal this year. Uber has sustained a fairly constant level of attacks over a number of its policies, but they are hardly the only startup that has received the ire of critics. TaskRabbit was excoriated by its taskers for its revamped work system, which prevents workers from customizing their work and instead only authorizes a handful of pre-defined tasks at fixed prices.

Startups move at the speed of light, and iterating on a product when someone’s livelihood depends on it is always going to elicit vituperative feedback. Stability is critical for being able to settle down and raise a family. Even though people across the industrialized world are delaying marriage and child births until later in life, the market has to be built in such a way that stability is a possible outcome for those who seek it.

The reality is that certain iterations of an on-demand product will just have to be delayed a bit, with better feedback to workers on exactly what the changes mean to them. Startups that fail to be forthcoming should absolutely be the targets of negative press.

Nonetheless, this new talent market is going to be much less secure and stable than the old one. Flexibility and control does come at a price. Today, there is rampant insecurity for freelancers and contractors, where wages can significantly change from week to week. As these startups gain scale though, I expect the variances in demand to be better smoothed out for workers, providing them a more stable environment than exists currently.

This is why I defer from some founders on the need for regulation. Our regulatory system is antiquated, but it did serve a purpose at one point, and still does in many cases. Preventing discrimination, ensuring workplace safety, and properly accounting for hours worked and overtime are just some of the areas where laws have helped make lives easier and safer for workers.

Those laws desperately need to be updated to include the kind of work that is becoming more common in our economy. There will be deep debates about what algorithms should be allowed to do, and how much business risk should be borne by workers instead of by a company. But those debates are needed, and everyone in Silicon Valley with an interest in these topics should try to engage researchers and policymakers on these subjects.

Looking even more toward the future, we need to ensure that workers can build a stable work life out of multiple small jobs. Obamacare helped with making health insurance more portable, but the intricacies of the system are still extremely hard to navigate. Our tax laws are extremely complicated for on-demand workers, requiring expensive accounting and tax preparation services just to properly pay them. Wider reform is required if we are going to build a world with better jobs.

These criticisms all deserve to be heard, but they should not detract from the underlying message. The On-Demand Economy portends a great future for everyone in our society. Greater convenience in services can benefit workers just as much as it benefits customers. Few of us want to go back to the corporate grind of the past, with employees sitting in soulless cubicles and waiting thirty years to retire.

We are only in the opening stages of this next revolution, but Silicon Valley and startups are firmly in the lead. We have every opportunity to build a far more creative and dynamic economy, one that quickens the pace of human advancement and bestows a better life on all of mankind.

Robot protest image by Thomas Hawk used under a Creative Commons 2.0 license. Portal 2 Poster image by snck used under a Creative Commons 2.0 license.