Essay Transcript: The Modern Labor Movement’s Technology Hurdle

Darryl Weng, University of Southern California, 15 October 2023

DISCLAIMER: Views expressed DO NOT reflect the author's views...Academic Purposes Only

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While the rise of tech giants and conglomerates in the modern era has changed many lives for the better, the American labor movement found itself caught in a new, harsh legal and corporate landscape. Addressing this issue, two influential figures in union organizations, Sarita Gupta and Joseph Lerner, and Georgetown University Professor Joseph A. McCartin joined forces in a Boston Review article arguing for the labor movement and workers to adapt to the future in the fight for economic justice and fair working conditions - quitting the antique strategy of collective bargaining and union-exclusive organized efforts (Gupta et al.). Thomas A. Kochan, MIT Sloan School of Management Professor, responded to the article by highlighting the utmost importance of integrating technology in the workers’ decision making process to combat innovations threatening to replace human labor. Kochan correctly notes that the new labor movement needs to aid workers in technological skills whilst also utilizing negotiations quickly with the already fading importance of wage workers (Kochan). Yet, by proposing that the movement simply offer workers as many opportunities to be adept in technology, Kochan ignores the impending time limit placed on workers’ rights efforts. The labor movement cannot aid workers alone - it must push legislative efforts as far as possible. Along with advancing the workers’ skills to be safe along the innovation curve, the labor movement must temporarily slow down innovation through heavy regulation to protect worker livelihood.

Neither articles fully display the urgency of the labor issue. The rate at which technology is advancing is far greater than that of the workers’ ability to gain tech skills. While many low-level workers from specific industries have not been displaced for decades, more and more jobs from all industries are being cut over decreased wages and less demand. Although the occupation of a taxi-driver is not categorized as low-income or minimum wage, taxi drivers are among those whose jobs and wages have been adversely affected by the technology boom. In 2009, Uber was founded, becoming a new Silicon Valley obsession. While Uber has been revolutionary and become ingrained into our daily lives, the software-taxi company nearly killed the traditional taxi industries globally (Meyer). Lund University Professors Thor Berger and Carl B. Frey, along with economics expert and lecturer Chinchih Chen, analyzed Uber’s effects on the taxi industry as a whole and found a 10% reduction in traditional taxi driver wages with the initial Uber introduction to the industry (Berger et al.). While 10% appears to be minor, the effect was large enough to upend many of the traditional taxi services and transitioning new employment into Uber drivers. Although Uber provides its own drivers with higher income on average than the traditional taxi driver, Uber’s research and development division and executives have continued efforts to innovate Uber further to automation and away from human employment (Meyer). A few years back, Uber publicly shared its ambition to replace human drivers to run the car services completely autonomous, noting that their “biggest expense was its drivers” (Metz and Conger). Lawrence Mishel of the Economic Policy Institute highlighted Uber’s driver compensation as of 2018, noting that on-paper wages Uber drivers earn roughly less than 90% of all workers earn and Uber itself takes additional fees that subtract roughly a third from driver compensation (Mishel). Unsurprisingly, this aligned with Uber’s goal of automation in 2018, reducing compensation to favor a transition. While Uber is not anywhere near implementing self-autonomous driving cars in the near future, the company has shown its eagerness for transition through a history of decrease in driver benefits.

Uber is a prime example of how the rapid rise of technology is swallowing jobs. In cases such as Uber, there is no time for workers to adapt as they please - especially to react to sudden technological changes in an instant. Even Uber’s own employees face the challenge, where Uber continues to innovate to promote the concept of autonomous taxi service. Likewise, the labor movement does not have the leading tech minds to anticipate innovation for workers to be right along with the technology curve. Kochan appears to have ignored the episodes of innovation vs. human labor within the past two decades. He does highlight the need for a “discussion of quality” where the quality of worker skills are vital in negotiations to avoid the faults of classic collective bargaining (Kochan). However, Kochan ignores the tumultuous process of workers gaining technical skills and knowledge capable of taking on conglomerates.

Without a substantial buffer between technological growth and the labor movement’s effort to re-educate workers, the “discussion of quality” will not exist. The most viable strategy to provide such a buffer would be through legislation and lobbying efforts. Having workers’ voices heard right on the legal code allows the labor movement to exert legitimate authority over even the largest of the tech giants - avoiding the need for extensive and uncertain collective bargaining. On an additional note, as Gupta et al. have explained, unions themselves cannot alone fight for legislation - the entirety of the labor community must also be present in the legal efforts. The recent skirmishes between unions and major corporations appear to be a step forward in the goal for a just economy, but the heavy legal constraints prevent any progress. For example, Amazon has had its own series of strikes over the last few years. The media attention and support from the public gave the strikes far more appeal and importance, despite the continued lack of action from Amazon. Even with globally staged strikes and vocal support from politicians, the efforts have amounted to zero actions on the company’s behalf - only consequences that hurt workers even more financially. Amazon had announced in October 2018 that it would increase wages to $15, but did not mention the severe cutback on bonuses and stock options that completely reversed the wage increase (Gupta et al.). As such, despite the Amazon labor unions’ progress, Gupta et al. concluded that Amazon workers have yet to secure true power against the tech giant (Gupta et al.). The lack of a handwritten code to limit the ability of corporate America to infringe upon workers’ rights is preventing any progress within the labor movement.

It is valid for Gupta et al. to have good reason to be skeptical of the importance of law in comparison to the mass participation of workers’ rights advocacy. The writers pointed out the general downwards trend in union membership and strikes/stoppages since the Reagan Administration - “the economy was reorganized wholesale” (Gupta et al.). The result? An unjust global economy. Yet, this does not make legislation “insufficient”. Kate Andrias, Columbia Law Professor and legal scholar at large, responded to the writers’ take on law and argued for the labor movement to integrate and revolve around law reform. She does admit the amount of legal constraint around the labor movement today but emphasizes the importance of legal framework - the rules defining the workers’ rights in how they negotiate and counter the unjust demands/decisions by the employers. For decades, the labor movement revised the legal framework to engage the corporations who seemed unmovable through any sort of negotiations or stoppages. Andrias elaborates on the historical precedence legislation has on the movement’s actions, mentioning the National Labor Relations Act (NLRA). The NLRA was passed in 1935, and like many other labor laws in the 1930s, empowered workers with “legal rights to organize, bargain, and strike” (Andrias). But the labor acts in the 30s were bypassed by recent Supreme Court decisions. Epic Systems v. Lewis “granted employers the authority” to force workers to sign agreements to participate in “illegal” activity that has already been labeled as legal under the NLRA (Andrias). It is true that the timeline of legal events following the labor movement’s efforts have turned from favorable to detrimental, but one theme remains true: the impact of law on the labor movement’s efforts have been enormous - negatively or positively. Law has been key to the decisions regarding labor reforms and, as a result, should have increased attention. Even as the current outlook on the labor movement’s legislative efforts are largely negative, legal efforts could be key to turning the tables completely. Gupta et al. should not be discouraged from advising the labor movement from increasing legal efforts, as Andrias has highlighted the great importance of law.

In fact, there are a few legal victories out of the spotlight worth mentioning. While federal laws and Supreme Court decisions such as Epic Systems v. Lewis present hurdles, statewide and local governments have made instrumental decisions that have been major victories for the labor movement in an effort to prevent further encroachment on workers’ rights. One example is New York’s Alexandria Ocasio-Cortez who helped lead the major voices to prevent the introduction of a second headquarters from Amazon to move into New York. Amazon decided to create a second headquarter on the east coast where it would stretch its corporate talons to areas of fast technological and population growth. While New York City’s mayor and the state’s governor were initially all for the Amazon deal and providing beneficial government subsidies for the company to bring further growth to the city, figures like Ocasio-Cortez refused, citing false/exaggerated promises and high costs (Fitzgerald and McDonough). There were two fundamental issues regarding the corporate giant’s move-in to New York. The first was the promised jobs. The government-corporate deal usually consists of an initial investment from the government added with tax benefits to invite a corporation that would instigate growth and bring jobs. Due to Amazon’s fallacious reporting of the number of jobs it helped create and failing to hit hiring goals in the past, nearly all of New York’s politicians began questioning the true benefits of having Amazon invited over. Not only was the company’s historical actions a point of critique, but also the amount of money demanded to be compensated for the move-in. In total, Amazon was offered $3.5 billion in government subsidies (Fitzgerald and McDonough). Here, the second case of critique, is simply the sheer amount of subsidies resulting in the hands of a massive corporation. These subsidies range from tax revenue to other fees the people of New York have given from their paychecks to the government. In other words, at the expense of millions of workers, Amazon was most likely going to provide fewer promised jobs than expected whilst gaining incredible funds to spread influence over corporate competitors and politicians. In response, Ocasio-Cortez and a cohort of New York politicians spearheaded the dissent of the Amazon deal to eventually push the company away from taking the benefits. While the labor movement did not gain anything particularly beneficial in terms of combating worker skill sets against encroaching technology herded by innovation giants, the movement avoided a massive loss that could have exacerbated the economic inequality along with devastating worker livelihood. The use of government influence and political advocacy kept the labor movement safe in many areas, saving them from immediate dangers that would have toppled their modern participative efforts.

The path of the labor movement’s success will be extremely daunting, such as adapting to the ever-evolving innovations surrounding their efforts. At the same time, the modern legal constraints and corporate leverage have suppressed traditional union efforts, forcing the movement to develop new strategies. Legislation will mold the entire fate of the fight for economic justice and workers’ rights, but it will be from there that workers must be pushed to adapt and learn along the technology curve to avoid being left behind innovation.

Works Cited

Andrias, Kate. “Labor Law Reform Is Essential.” Boston Review, 6 Jan. 2023, www.bostonreview.net/forum_response/kate-andrias-fixing-law/. Accessed 2 Oct. 2023.

Berger, Thor, et al. “Drivers of Disruption? Estimating the Uber Effect.” European Economic Review, vol. 110, 2018, pp. 197-210. Science Direct, https://www.sciencedirect.com/science/article/abs/pii/S0014292118300849.

Fitzgerald, Colin, and Collin McDonough. “Why AOC Was Right About HQ2.” Data For Progress, Data For Progress, 25 July 2023, www.dataforprogress.org/blog/2020/1/28/why-aoc-was-right-about-hq2. Accessed 2 Oct. 2023.

Gupta, Sarita, et al. “A New Age of Worker Empowerment.” Boston Review, 6 Oct. 2023, www.bostonreview.net/forum/sarita-gupta-stephen-lerner-joseph-mccartin-why-labor-movement-has-failed/. Accessed 2 Oct. 2023.

Kochan, Thomas A. “Technology for the Common Good.” Boston Review, 6 Jan. 2023, www.bostonreview.net/forum_response/thomas-kochan-technology-common-good/. Accessed 6 Oct. 2023.

Metz, Cade, and Kate Conger. Uber, After Years of Trying, Is Handing off Its Self-Driving Car Project, The New York Times, 7 Dec. 2020, www.nytimes.com/2020/12/07/technology/uber-self-driving-car-project.html. Accessed 2 Oct 2023.

Meyer, David. Uber Hasn’t Taken Taxi Drivers’ Jobs But Has Slashed Their Wages, New Scientist, 3 Feb. 2017, www.newscientist.com/article/2119432-uber-hasnt-taken-taxi-drivers-jobs-but-has-slashed-their-wages/. Accessed 2 Oct. 2023.

Mishel, Lawrence. “Uber and the labor market: Uber drivers' compensation, wages, and the scale of Uber and the gig economy.” Economic Policy Institute, 15 May 2018, https://www.epi.org/publication/uber-and-the-labor-market-uber-drivers-compensation-wages-and-the-scale-of-uber-and-the-gig-economy/. Accessed 5 December 2023.