We live at a time of great social turmoil. The populous is not happy with the establishment. This is hardly limited to the United States. It is a global matter because millions of people around the world have lost a lot of economic and retirement security over the last thirty years. Globalization, like any process, has winners and losers. The American rust belt and West Virginia are some of the major losers in this process. So are the British working classes in former industrial towns, as well as Mexican small farmers.
Globalization ultimately is the end process for human organization systems. If you take a very long view of history, societies have evolved from bands of hunters and gatherers to global connections. Why? We have great efficiencies of trade and global communications. However, the way we achieved this is leaving a lot of people behind, whether it is because industrial jobs moved to cheaper production zones, or robots taking over factory jobs. Due to the climate emergency, we need to change our energy sources as well. This will also leave behind coal miners, and sooner than we expect, the gas patch workers and the oil patch workers. This process is deeply underway in the carbon patches of West Virginia.
People are under pressure because familiar secure well-paying jobs are ending and they see their future at risk. Also, and this is not limited to the United States, wages across the OECD countries stagnated. According to the organization:
Unemployment rates are below, or close to, pre-crisis levels in most countries. Job vacancies have also reached record highs in Japan, the euro area, the United States and Australia. The OECD unemployment rate is predicted to continue falling, to reach 5.3% at the end of 2018 and 5.1% the following year. Yet the picture continues to be mixed in terms of jobs quality and security, while poverty has grown among the working age population, reaching 10.6% in 2015 compared to 9.6% a decade earlier.
Wage growth remains remarkably more sluggish than before the financial crisis. At the end of 2017, nominal wage growth in the OECD area was only half of what it was ten years earlier: in Q2 2007, when the average of unemployment rates of OECD countries was about the same as now, the average nominal wage growth was 5.8% vs 3.2% in Q4 2017.
Specifically to the United States, the de-coupling of wages and productivity occurred in 1973. This had serious consequences. We know that the minimum wage is very low, to the point that it is not enough to do anything with it. But this goes for wages in general since this has depressed wage scales in the economy. The current generation will do worse than their parents. Baby Boomers were the last generation where most did better than their parents. Ergo, the American dream is dead for many.
Then there is the universal rise of the Precariat. This is an amorphous mass of workers, who do not have a permanent job. They are hired as private contractors and are paid a percentage of earnings from a major company. If you think I am describing Uber, you are correct. However, this includes a lot of independent work done for small providers, or for that matter freelance work. It is far from secure, tends to be low in real earnings, and leads to job insecurity and retirement insecurity. None of these jobs come with medical benefits, or for that matter, labor rights.
This is not just limited to the United States or Europe. For example, the first place I saw Uber Eats, was not in an American city, but in Mexico City. I also know people who drive for Uber in Mexico City, where the hustle is as real as in any American city. So is the conflict with taxi drivers who have to meet a series of requirements that Uber and Lyft drivers do not meet. Like the United States we have seen violence between both sides. What Uber and Lyft did was disrupt the industry, but also created a mass of workers that are at will, and have higher rates of insecurity than even independent taxi drivers.
I also know why many drivers stop after a short time. Their pay is low, but they assume all the responsibility of maintaining their vehicles in good order. Meaning, that their take-home pay tends to at times be under the minimum wage. This is directly responsible for the recent strike in Los Angeles, and other American cities. By their account, some are making $3.75 an hour, which is well under the federal wage of $7.25. The federal wage has not gone up since 1991.
According to the Guardian:
For over a year Rob Mead has worked as an Uber driver in Reno, Nevada, to supplement his income as a public sector worker. Now he’s wondering if it is worth it. “After gas, added monthly rideshare insurance, wear-and-tear, constant oil changes and taxes that $300 for 30 hours of work I thought I made in a week actually averages down to about $90 after expenses,” said Mead.
“A few weeks ago I drove four passengers in a one-hour period. I looked at my profits and I made only $12 It was snowing, traffic was crazy and I basically risked my life to make that $12. After expenses I made $3.75 that entire hour.”
Mead’s wages contrast sharply with the fortunes that the executives at the rideshare companies Uber and Lyft are about to reap. This week Lyft started its investor roadshow as it prepares for its stock market listing. Lyft’s cofounders, Logan Green and John Zimmer, stand to make hundreds of millions from the sale, currently valued at $23bn. Uber plans to follow Lyft’s initial public offering (IPO) in April — a share sale estimated to be worth $125bn that will create a new generation of millionaires and billionaires from its executive class.
Both companies plan to use some of that money to develop autonomous vehicles — technology Lyft has conceded is likely to lead to the “loss of income to human drivers”.
Since drivers are considered independent contractors, once autonomous vehicles hit the streets, most of these drivers will be displaced. Since they have no rights, it will be as simple as deactivating them from the system. This is why many of them are organizing. They also want better labor conditions, which are worst than the taxi drivers they are in direct competition with. Never mind that taxi drivers do not make a lot of money. However, until cities started opening the number of permits, called medallions in many cities, those were so valuable that they were sold for thousands of dollars.
Guy Standing writes in The Precariat:
A central aspect of globalisation can be summed up in one intimidating word, ‘commodification’. This involves treating everything as a commodity, to be bought and sold, subject to market forces, with prices set by demand and supply, without effective ‘agency’ (a capacity to resist). Commodification has been extended to every aspect of life — the family, education system, firm, labour institutions, social protection policy, unemployment, disability, occupational communities and politics.
In the drive for market efficiency, barriers to commodification were dismantled. A neo-liberal principle was that regulations were required to prevent collective interests from acting as barriers to competition. The globalisation era was not one of de-regulation but of re-regulation, in which more regulations were introduced than in any comparable period of history. In the world’s labour markets, most new regulations were directive, telling people what they could and could not do, and what they had to do to be beneficiaries of state policy.
This process hobbled organized labor, as well as any other form of resistance to this new economy. This is why attempts to organize workers, such as Uber drivers, are met with open hostility from those who benefit from the current form of globalization. This is also why we are seeing a resurgent labor movement, which includes the Fight for 15, which intends to raise the federal minimum wage. While we are told that $15 would be a living wage, in areas like California this would have to go all the way up to anywhere from $20 to $25 dollars an hour.
This brings us back to Trump, as well as other forms of resistance to this. Brexit is also a symptom. So are the attacks on global institutions by populists around the world. They are promising to bring back the world that was. Alas, that world does not include the means of resistance and organization of the Industrial Age. Many of the old institutions, such as Labor Unions, were attacked and discredited by the new masters of the universe.
In my view, the problem with the current form of globalization is the way it’s occurred, where a few have benefited greatly. Whether it is Carlos Slim in Mexico after the State Telephone company was sold at basement prices, or for that matter the board at Lyft and Uber that are making out like bandits while their drivers need food stamps and Medicaid. We all have become a commodity to be used, exploited and discarded as needed. The planet itself has become disposable.
In effect, we are at a historic crossroad, and on the edges, a new economic system is starting to take shape. So is the resistance to the commodification of everything. In the meantime, populist on both the right and the left will rage against the swamp, the establishment, the way things are done. People desperate for a better future will listen to them because many remember an idealized past when they had a better life.