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David Cay Johnston: Forget Job Security in the Gig Economy

Investigative journalist David Cay Johnston and KALW-FM “Your Call” host Rose Aguilar discuss the “gig economy” at Impact HUB San Francisco. Photo by Noah Arroyo / San Francisco Public Press

A recent program took a hard, unforgiving look at the so-called gig economy and how it affects freelance and contract workers. Rose Aguilar, host of  “Your Call” on KALW public radio, interviewed Pulitzer Prize-winning investigative journalist David Cay Johnston. The wide-ranging conversation, followed by a lively Q&A session, dissected how this new economic reality had changed the traditional workplace of salaries and benefits, and had undermined safeguards for working conditions and wages. Johnston, however, did suggest how people and the government could provide possible solutions.

The program, “Are Independent Contractors Being Shortchanged? Job Security in the Gig Economy,” was part of the Sustainable SF series in partnership with San Francisco Public Press and KALW Public Radio, and was hosted by Impact HUB San Francisco

The discussion began with defining the terms, and Aguilar frowned on the use of “sharing economy” and instead opted for the “gig economy.” The term describes workers who toil as freelancers or independent contractors, typically in jobs such as driving for Uber, delivering and providing goods and services, e.g., for TaskRabbit, and freelance writing. 

Both agreed that the demand for such labor is there. 

“I found that you can order a house cleaner, a chef, someone that will stock your bar and bartend for you, a personal shopper, a masseuse, you can pay to have your packages shipped,” Aguilar said.

She cited a recent survey by Emergent Research that found that the number of independent contractors would double by 2020, from 3.2 million now to more than 7.6 million — figures that appeared to be on the low side for Johnston and Aguilar.

“The number of people in that kind of employment is going to see a rise because that’s what the legal system is allowing to happen,” said Johnston, author of the just-published "The Making of Donald Trump."

The issues of fair wages and worker benefits are nothing new, he pointed out. 

“We have trial records from 3,500 years ago in Egypt. The ancients figured out all this stuff a long time ago," said Johnston, who teaches property, tax and regulatory law of the ancient world at Syracuse University's schools of law and management. "We have always had legal issues about how do we pay people, what’s fair in paying people, and what are the rules of how you pay people.”

Even as far as back then, he said, there were dire warnings about putting too much power into the hands of an employers.

Johnston then turned his attention to the here and now — the plight of the gig worker. It is an economy where workers live paycheck to paycheck and have no benefits, and where employers’ responsibility toward worker is diminishing and labor laws are being dismantled. 

Aguilar pointed out that independent contractors surveyed said that while they like some of the flexibility in their schedules, what they didn’t like was lack of a guaranteed a wage, paid family and sick days, and health insurance.

Not exactly a rah-rah for the gig economy, circa 2016. 

Johnston made it very clear that he is an advocate of salaries, and not of the hit-and-miss income fluctuations typical in the gig economy. 

Properly paid employees are free because they pay for themselves, he said, adding later that salaries provide a steady, reliable source of income. The only way a gig economy works is if you don’t have full employment, he noted, pointing to  San Francisco employers’ difficulty have in finding workers because many cannot afford to live in the city. 

“People show up for a salaried job. And, by the way, if we don’t do that, how are people going to afford a mortgage?" Johnston said. "How are they going to afford anything if they don’t have a steady, reliable source of income? …  Most human beings want to get a paycheck every week.”

He blamed the erosion of salaried employment on post-Ronald Reagan laws. 

Labor laws in America have changed dramatically in the 36 years since the beginning of  age of Reagan, according to Johnston.  During this time, he said, workers’ rights have been reduced along with the responsibilities of of employers toward workers. 

Aguilar’s questions then zeroed in on the following issues. 

Is there hope in unionizing?

Johnston was pessimistic about what unions can do to improve salaries and benefits for gig workers. Anti-labor laws proliferate, he said, cutting into union-organizing efforts. Instead of unions, he suggested that the government should be the stand in for workers’ rights. The government should impose laws that, for example, establish a minimum wage or, as a condition of contracting with the government, employers should  be required to pay fair wages and provide benefits. The government can set the rules, not the employers, Johnston said. 

He stressed, too, that it is important  to vote — people can vote out of office the politician who goes against their economic interests. He waxed elegiac, veering into the biblical: It is evil to take from the widow and give to a king, according to the Bible, he said. Some of that evil could be seen in the actions of the Koch brothers and their monetary influence in a Wisconsin that is now run on what he called "Kochian principles." 

He did cite victories for workers and the forces of change: the Civil War ended slavery, child labor was outlawed, women got the right to vote, and local governments are raising the minimum wage. 

But what about Uber? Aguilar said, pointing out its popularity. Johnston, however, cautioned people to look at the big picture. Salary stability and benefits are left behind in this digital age, and, unfortunately, he said, we’re stuck with antiquated rules and haven’t yet figured out how to apply them to a digital world. 

Are lawsuits — filed by independent contractors to be salaried employees — the answer?

Johnston, again, was pessimistic. He noted how advocates like Ralph Nader were seen as a threat by Republicans who then appointed much of the judiciary. The problem, he said, is you have to have judges who don’t follow some ideological pattern and weren’t picked for that, they were picked for their devotion to the principles of law” — and that situation is becoming increasingly rare.

The spirited Q&A session followed the interview, further airing the issues of the gig economy.

To learn more about wage-and-hour issues, read the San Francisco Public Press fall 2014 Special Report “Minimum Wage.”

Video by Hyunha Kim / San Francisco Public Press

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