Professional taxicab drivers are fighting for survival in a new economy which is looking hungrily to replace them with other means of transporting customers. New business models like those of Uber and Lyft are threatening drivers, customers, and bystanders alike; while at the same time offering potentially lower fares (outside of peak business hours) and wait-times. However, cab drivers are joining a long list of people replaced by new technologies: grocery-store clerks, dockworkers, retail employees (especially from book, music, and video stores), etc. As the twenty-first century proceeds, it is replacing jobs with apps; and concentrating more and more wealth at the very top. The “trickle” of wealth to the lower classes by way of employment is rapidly drying up, as global information networks insulate the wealthy from the working classes through new lower-wage and even jobless models of business. There are three problems at work, which are creating a new jobless economy, and are associated with, respectively, the business models of Uber, Wal-Mart, and Amazon.
The Uber Problem
The first problem with our transitioning economy is the Uberization of the work force and of our business models; replacing well-paid, full-time, professional workers (and the labor organizations that protect them) with lower-paid amateurs. While Uber drivers bring in somewhat more revenue per hour for short shifts than do cab drivers (who make much more money per hour for long shifts than for short ones), they are also entirely self-financing (car, gas, insurance, maintenance, etc.), unlike most cab drivers (who depend on their companies to provide some or all of their operating costs). Such jobs are often intended by car-owners to supplement other income, or while looking for a better job, rather than (as for most cab drivers) serving as a long-term profession. The Uber model of transportation has been deconstructing the regulatory environment designed to keep us safe, allowing drivers to work without undergoing local police investigation (generally required in most places for cab-driving licenses). They also drive cars that are not inspected by any authority, in contrast to expensively inspected taxicabs. Uber drivers have been involved in many physical and sexual assaults on passengers and bystanders, an ugly reality that existing regulations for taxi companies (which do not apply to new app-based amateur driving companies) have until now helped to prevent.
Unfortunately the dangers posed by Uber to our communities are not limited to the immediate physical dangers posed by improperly licensed and unvetted drivers, operating uninspected vehicles, and with no police intervention in the employment of potentially dangerous individuals (with criminal backgrounds, or with high accident rates). Uber is also teaching passengers that any idiot with a car can replace a professional driver operating an expensively fitted, inspected, and insured vehicle. Uber is teaching us to disrespect professional means of income-earning, and to prefer a cheap but dangerous alternative. Uber is teaching us to prefer a less effective and less prosperous economy, and offers us discounted car rides in return for our safety, our jobs, and our souls. As the Uber model passes (as it ultimately will) to cargo transport and other business sectors, our economy will replace more full-time jobs with low-pay, part-time work. Wealth will be created for the designers of Uber, Lyft, and other services. But such services are also transforming middle-class jobs of the 20th century into lower-class jobs of the 21st century. Uberization is driving our income inequality to new heights, concentrating wealth and diminishing jobs as drivers themselves make less money and consume less, driving demand and production down as well.
Uber is not alone, nor is it the first manifestation of this problem. From the 1950s through the 1980s, grocery-store clerks and cashiers earned income levels closer to the middle class. Such workers had to memorize many prices and categories of products, and operate complicated registers. They required training and experience to do their jobs properly; and could only be fired at the expense of the investment in training a new employee. However, the development of bar-codes and scanners enabled grocery and retail stores to hire lower-paid workers, and to deploy new workers with little training and experience (enabling bosses to replace more easily those wanting raises or organizing for benefits). A career profession became merely an entry-level job for adolescents; and a job capable of supporting a small family became a minimum-wage job pushing the professional into looking for work elsewhere.
A similar phenomenon took place in the 1960s, when factory farming began replacing family farming. Factory farms employ low-wage workers with little to no experience (often illegal immigrants, including young children), and provide consumers with cheap food that also pushed family farm workers into seeking work elsewhere (perhaps becoming grocery-store clerks, or cab drivers). While few would argue that high food prices are good for a population, the path from that step led to the replacement of other middle-class professions with part-time and/or lower-class pay rates, such as our retail workers and cab drivers. Uber is merely the latest nail in the coffin of the middle-class worker, a coffin we have been building since the middle class first expanded so successfully in the middle of the last century.
The Wal-Mart Problem
Another effect impacting our economy is its growing Walmartization. Wal-Mart has sought to provide low-cost products to consumers by encouraging (some have said, “forcing“) American manufacturers to push manufacturing jobs to overseas locations. In order to gain customers, Wal-Mart has deliberately deconstructed the American middle class by shipping overseas the jobs on which we depend. Consumers giving their money to Wal-Mart pay for the privilege of exporting and eliminating our jobs, our economic security, our union rights, our tax revenues, and our social services.
As with Uber, Wal-Mart is of course not acting alone. Since the 1990s NAFTA has helped to globalize American manufacturing. And the US has been bleeding manufacturing jobs for decades, as foreign nations have seen increases in educational levels, technical familiarity, physical health, and political stability; while also remaining below US rates of income (all things encouraging ever more investment in new overseas plant capital). However, Wal-Mart developed a specifically targeted plan for pushing manufacturing overseas, and at the same time earned opprobrium for keeping its own workers at low wages (forcing many to seek government-funded welfare and social support), and for combating workers in their attempts to organize. The company has not only exported middle-class American jobs; but also maintains pressure on the labor market to keep wages at or below poverty levels. The company’s workers become absolutely dependent on companies like Wal-Mart for their cheap food and products, the only products they can then afford. Wal-Mart cooperates with Uber and other sectors in deprofessionalizing the labor market (by continuing to push retail wages lower), and in depressing wages and income. Wal-Mart has been steadily converting the middle class into the lower class (driving down consumption and demand and production); and the working class into the unemployed.
The Amazon Problem
The final effect driving us toward universal unemployment is the Amazonification of business; and the related automation of all work areas. Amazon has amassed an enormous financial empire by replacing “brick and mortar” businesses with instantaneous touch-screen or keyboard shopping by computer, phone, or tablet. In the process, the “Amazon Effect” has put out of business bookstores (including major chains like Borders), record stores (also killed by iTunes and other music-sharing technologies), and video stores (with an even more forceful shove by businesses like Netflix). These impacts have hurt large companies and family-owned businesses alike; and they have killed off more jobs than the growing empires of Amazon and other such companies have created. Amazon’s deconstruction of “brick and mortar” retail operations did not merely (like Uber) push middle-class jobs into the lower class; or (like Wal-Mart) push middle-class jobs overseas. Instead, the jobs lost to the Amazon business model (and to data services that replace stores providing books, music, and video) are lost completely, and forever. For example, Netflix has effectively replaced video stores across the nation; and yet it currently employs fewer than 4,000 people (Netflix has also, in contrast to Wal-Mart, been lauded for its exemplary treatment of its employees; but that is a standard that only a relative few can enjoy).
Some businesses have survived the scorched earth left by the “Amazon effect” by emulating the workerless e-commerce model (like Barnes and Noble, which while still maintaining physical book-stores sells a great deal of its merchandise through its automated online ordering system). Other businesses have survived by becoming tributary fiefdoms of the Amazon empire, selling their products through Amazon’s order processing service (which provides small businesses with a potentially global clientele). But the failure of 20th century, labor-intensive retail to compete with 21st century, information-intensive business models tells the full story. Even though some businesses have held on by bowing to the inevitable, the inevitable has killed far more business opportunities and actual jobs than it has created. Those opportunities created on the information super-highway have largely been monopolized by a few powerful corporations like Amazon, Netflix, Apple, etc.
As with Uber and Wal-Mart, Amazon did not create this phenomenon, but jammed its foot down on the accelerator of the process already underway. Other technologies have also helped to decimate the work force while creating – and concentrating – wealth for those at the top. In the 1960s, for example, the development of the now ubiquitous “TEU” (“twenty-foot equivalent unit”) steel shipping container revolutionized cargo transportation (especially at the links connecting road, rail, and sea transport). Since the container was first used, sea cargo traffic has exploded, carrying a vastly greater tonnage of cargo across the seas than ever before – and has literally decimated the dockworkers as a work force, replacing hundreds of thousands of manual laborers with about a tenth of their number of automated crane specialists and software engineers. Some of the income changes from the container revolution have strengthened the middle class; the few longshoremen working today are very well paid. But roughly nine times that number have had to retire or find other work. A great deal of wealth has been concentrated into a smaller population by the containers, which helped to trigger globalization, as the costs of ocean shipping fell to preposterously low levels. Wal-Mart could never have pushed manufacturing overseas without the container’s effect on almost eliminating shipping costs from the equation. But that wealth has also been insulated from the lower classes by the container revolution of the 1960s; and by the information systems of the 21st century.
The container revolution and the “Amazon effect” are the results of automation and the improvement of technology and software. Grocery stores also automate and eliminate jobs by using self-checkout lanes (enabling a smaller work force to manage larger numbers of customers and products). Apps replace workers and specialists. Expensive farming technology pushes small farms into larger, automated corporate farms employing less than 2% of the US labor force. Computer-controlled 3D “printers” are projected in the next two decades to replace many current manufacturing models – as well as the workers employed by them. Expanding technologies are going to increase also the number and diversity of jobs lost to automation and applications, including many previously seen as “untouchable” (requiring too much dexterity, skill, creativity or intuition, etc.; all of which are now being surpassed by better technologies and software).
In the next decade, self-driving cars are going to replace many of today’s cars. The self-driving car will launch the next work-force revolution. Customers frustrated by sketchy and unstable Uber drivers (who by then will have out-priced cab drivers into obsolescence) will enjoy new services which simply send them self-driving car-bots. Owners of self-driving cars will realize that having their car sitting in the driveway, or in the parking lot at work, is a lost opportunity to have the car make money. New apps will enable owners of such cars to release their cars to leasing services until they need them back. Fewer and fewer people will own (and buy) cars, as it becomes easier and cheaper to simply share cars through such systems. And fewer people will make them. Soon, no one will be driving cars for a living. And in the meantime, the information revolution will find other, new ways for the rich to make money without having to share profits with pesky employees.
Into the Jobless Economy We Go!
These three effects are combining to create the new, jobless economy of the 21st century. Uberization and related effects are helping to deconstruct middle-class incomes and our respect for middle-class professions. Walmartization is transferring ever more jobs overseas, and maintaining ever more poor people on low-level incomes that force their dependence on government assistance. Amazonification and automation are reducing and eliminating the work force entirely, insulating wealth from the need to employ people at all. These effects are progressively transforming capitalism from a labor-intensive means of generating wealth (which “shares” at least a portion of the wealth with the working classes responsible for actually creating it) into an information-intensive model no longer requiring workers. Conservatives have longed argued against the maintenance of welfare systems, insisting that the poor are somehow encouraged to avoid work and stay poor if such supports are available. They conclude that the poor should instead be encouraged to “pull themselves up by their bootstraps” through productive employment. This argument is rapidly approaching the same obsolescence faced by dockworkers, retail workers, and cab drivers, in an economy hemorrhaging jobs as rapidly as it concentrates its remaining wealth at the top.
The jobless economy also inhibits the formation of small businesses by those without inherited or pre-established wealth. Small businesses cannot compete on the information superhighway with major corporations able to make and exploit new applications and technologies (and economies of scale) which push their operating costs below those of local businesses. Local businesses are dependent on many other large businesses to move outside and attract global clientele. As the century progresses, both work and entrepreneurial opportunities are going to be increasingly monopolized at the top, and are going to be increasingly absent at the middle and bottom.
Ultimately, there are three places these effects can lead us. The first is the realization that, if people are not going to have either work or business opportunities available to them, then the state is just going to have to provide them with food, clothing, housing, medical care, etc. This will create the conservatives’ ultimate nightmare: the total welfare state. An uglier option is a dystopian future of mass hunger, disease, suffering, and death – as well as controls by the state of reproduction, to keep the useless unemployed from breeding. Finally, a third path takes us through violent revolution by the hungry masses; although that option will likely still lead to one or the other of the first two (welfare state, or dystopia of hunger and death). Are you ready to explore these exciting new vistas? Then, hop into an Uber car, load up your Kindle, and enjoy the ride!
Headline image from ClubZone, “Uber vs Taxi vs Driverless Cars?“