SocialismToday           Socialist Party magazine

Issue 202 October 2016

Trade unions and the gig economy

The gig economy is capitalism’s latest attempt to screw even more profit out of low-paid workers: CEOs get workers without the expense of meal breaks, sick pay, delivery vehicles or pensions. But, as ROB WILLIAMS reports, recent industrial action is opening up a significant new front in trade union and workers’ struggle.

"We are free, don’t work for 3!" This was the chant of striking UberEats couriers who rode their mopeds to the company located at the end of an alley near to London Bridge. Just as with Deliveroo two weeks earlier, workers had walked out after management had looked to replace hourly rates with straight payment per delivery, in the case of UberEats a miserly £3.22!

These disputes have lifted the lid on the so-called ‘gig economy’. It has been portrayed as another beneficial product of new technology because the service (or gig) is ordered by clicking on an app on a mobile phone, laptop or PC. However, far from being some glamorous techno breakthrough, the actual service is pretty low tech – Deliveroo workers deliver meals via a moped or bicycle that they have to provide themselves. This is why it is also called the ‘on-demand’ or ‘sharing’ economy, although the last thing that is being shared is the wealth!

Not for the first time in its history, capitalism is constantly developing new methods of exploiting workers. In fact, in this period of crises, the capitalists do not use technology to develop the productive forces and drive society forward – its historic mission that it was able to do in its more progressive period – but instead acts in a parasitic manner. So the development of computer technology is used to retreat into the worst exploitative methods of the Victorian age.

In his momentous work, Capital, Karl Marx showed how capitalism developed the productive forces with blood on its hands. Workers maintained the growing mills, collieries and foundries at a huge price in terms of deaths and injuries and often in a state of virtual starvation. Child labour was endemic. Marx exposed how schools were set up with ‘teachers’ who could barely read and write themselves, to get round regulations that stipulated that children had to be educated and out of the workplace for a token amount of time.

Workers also suffered from casualisation, with dockers in particular infamously facing a daily fight (sometimes literally) for work. Even outside of the working day, workers faced the exploitation of the ‘truck’ system where they were paid their wages in credits that could only be used in company shops, which sold goods at extortionate prices.

Increased exploitation

The last three decades has seen a counter-revolution by management as the capitalist ruling class went on an all-out offensive against the working class to boost profits through increased exploitation. On the favourable historical terrain of the collapse of Stalinism (1989/90), the major imperialist powers strengthened their hold of the world market through globalisation and deregulation. In Britain, the leaders of the trade union and labour movement, which had already suffered the significant defeats of the miners’ strike (1984/85) and printers (1986), moved further to the right. The Labour Party became a pro-market party.

A survey by the Trades Union Congress (TUC) found that in 1975, the proportion of national income that went to wages was 64.5%. By 2007, this had fallen to 53%. Since the economic crisis that year, the average worker’s income has fallen by 13% in real terms. It is estimated that, had wages kept pace with economic growth, in 2010 they would have been £7,000 higher! In contrast, the share going to profits has increased from 24% in 1981 to 28% in 2011. Similarly, the richest 10% now receive 9.6 times the income of the poorest 10%, up from seven times 30 years ago.

This is not just a case of paying workers less. The counter-revolution has also been about creating the conditions to attack historic gains of workers. Central in this has been the privatisation and out-sourcing of public services and of ‘indirect’ functions, such as cleaning and security to private companies. Alongside the decline of manufacturing and heavy industry, they have all been factors in the decline of trade union membership from 13 million in 1979 to six million now. This has opened up the opportunity to get rid of collective bargaining over pay and conditions, which has declined from over 80% of workers being covered to less than 20% over the same period.

In particular, we have seen the systematic casualisation of labour with the expansion of the use of temporary and agency workers to zero-hours contracts and, increasingly, bogus ‘self-employment’, a central feature of the gig economy. On one of the Deliveroo picket lines, a worker highlighted how virtually no-one in the company was directly employed, including in the office they were lobbying!

As workers facing this in construction and other sectors have long known, this means that the liability is all on the workers’ shoulders. The employer avoids responsibility for holidays, sick-pay, redundancy and pensions. Workers get paid for the hours they work and, more and more, the work they do. This is because the gig economy is particularly well-suited to piecework. In the UberEats dispute, one of the management team blandly admitted in a TV interview that the proposed new terms meant that the work was only for students! However, he was interrupted by angry striking couriers when they discovered that the interview was taking place just round the corner from the company office!

A new low

A recent Organisation for Economic Co-operation and Development (OECD) report found that more than 50% of all new jobs created in the advanced capitalist countries since the mid-1990s were what is called ‘non-standard work’. The United Nations agency, the International Labour Organisation (ILO), characterises these as "jobs that fall outside of the realm of standard work arrangements, including temporary work, temporary agency or dispatched work, dependent self-employment, as well as part-time work, including marginal part-time work, which is characterised by short, variable, and often unpredictable, hours". The OECD reported that a third of all jobs fall under this description. Incredibly, however, in the UK it accounted for all net jobs growth since 1995.

The ILO further comments: "Over the past several decades, in both developed and developing countries, there has been an important increase in the number of persons who are employed under alternative contractual arrangements. In some instances, these new forms of contractual arrangement have led to a blurring of the employment relationship, making it difficult for workers to exercise their rights at work, or gain access to social security benefits".

The latest figures from the Office for National Statistics show a 20% rise in the number of workers on zero-hours contracts to 903,000, or 2.9% of the employed workforce. TUC analysis shows that the average worker earns 50% more an hour than those on zero-hours contracts. The median hourly rate for a zero-hours worker is £7.25 compared with £11.05 for all employees.

The couriers are the most obvious and visible expression of the gig economy but similar terms are being used throughout the economy. In his article for the Guardian (‘The Gig Economy Is Here To Stay. So Making It Fairer Must Be A Priority’, 4 September), Will Hutton describes how, initially, independent TV production companies had been offering job contracts on these terms when fulfilling work for the mainstream broadcasters. However, now the BBC and ITV themselves are more and more operating on this basis, "creating a contractualised workforce required to bid again and again to continue doing a job that used to be full-time, tenured and part of a career. No more". Hutton goes on to argue that the proposed new junior doctor contract contains gig terms.

A Financial Times article (‘Gig Economy Poses Benefits Challenge’, 24 August) reported on the estimated one million workers in the USA who work in this ‘grey zone’. A handyman admitted that his new work was "originally a stopgap", and that "it has been enough to live on, but not something to retire on".

This is a new low in the attempt by the capitalists and their governments to further atomise the workforce. Not only are public sector jobs outsourced and parcelled off to a parasitic private sector privateer, but single workers can become an entity that has to bid for work from a company that is more a provider or facilitator than a firm. But the worker only gets paid for the actual work done. Even worse, just as miners before the nationalisation of the coal industry in 1946/47 had to pay for their tools, the Deliveroo couriers have to pay £1,100 for their own moped. Many of them work for both Deliveroo and UberEats to make enough to live on. Some work up to 70 hours a week.

Flexibility con-trick

The neoliberal ideologues will argue that this means freedom for workers – ‘freelancers’ or ‘contractors’ as they would rather call them – just as they tried to convince workers on zero-hours contracts that they were benefitting from flexibility. This is just an extension of when many construction workers became self-employed in the 1980s and were told that they were ‘their own boss’. But of course their relationship to the main contractor was still one of boss and worker, only one where the boss had been strengthened at their expense and they had to hire their own accountant to calculate what tax they had to pay!

In the Financial Times article on the US, the reality facing workers is well understood by them. These contracts are not a choice but a brutal day-to-day struggle to get by in a parasitic capitalist system. One such worker, clearly a master of understatement, said: "Would I like someone to be covering healthcare, a retirement plan, other benefits? Yes, that would be nice". We do not agree with the pessimists who believe that these brutal exploitative methods are here to stay, as Will Hutton believes.

He argues that unions could "develop into fully fledged worker co-operatives hiring out workers to gig employers and providing benefits as members of the co-operative". It depends on what is meant by this. We do not agree that trade unions should become merely another employment agency. However, particularly in sectors where employment is fluid – such as workers in construction maintenance at oil refineries, power stations, etc – the idea of a register of labour under the control of the trade union has been a demand, backed up by action if necessary to enforce it.

It was raised by the Socialist Party in the Lindsey oil refinery dispute in 2009 to defend the National Agreement for the Engineering and Construction Industry with the approval of many of the workers to ensure that longstanding union activists were not blacklisted from the industry. In 2012, construction workers walked out at Runcorn thermal power station for the very reason that local victimised workers were being passed over for jobs.

Taking action

While workers and unions have to operate in the reality that exists in the here and now, there is a growing anger that can and is being mobilised to throw off these terms, just as the worst of the bosses’ attacks have been historically, from the docks to the mines. John Harris in The Guardian (‘Does The Left Have A Future?’ 6 September) goes even further in seeing the expansion of the precariat via the growth of zero-hours contracts and the gig economy as being fatal for the unions and the left. Unsurprisingly, there is no mention of the disputes in Deliveroo and UberEats.

Despite the terminology, the ‘independent contractors’ who rode to the London headquarters of UberEats felt very much like workers and the stoppage had an uncanny resemblance to a strike, although a very mobile one. These recent disputes should give trade unionists optimism that workers can see beyond the myth-making. Not only that, but that they understand the need to be organised in a union and, if necessary, to take action to defend themselves.

Ultimately, because of their strike and its effectiveness, management had to negotiate with the couriers’ union – the small Independent Workers of Great Britain (IWGB) – which had no actual recognition agreement and therefore no official dispute. Just as with the junior doctors this year, a group of workers with little trade union knowledge went through an intense concentrated experience and learned very quickly what a union was and how to conduct a strike. Without the weight of a union bureaucracy and the memory of defeats, they were able to act in a direct and militant manner. In Deliveroo, they have won a victory, at least for now, by forcing the company to suspend the imposition of the harsh new terms to replace the hourly rate for basic pay by delivery.

It has been more complicated in UberEats, with the company sacking – or, in the new terminology, ‘deactivating’ – one of the IWGB reps. But whatever happens, an example has been created that other bigger trade unions need to follow. The militant Bakers Food and Allied Workers Union (BFAWU) has taken the impressive step of seeking to organise workers in the fast food industry who are currently more in temporary employment than on gig terms, but it is easy to see that it would be a tempting option for McDonald’s or KFC. How soon before we see workers being paid per Big Mac?!

For inspiration, the BFAWU (supported by organisations such as Youth Fight for Jobs and the National Shop Stewards Network) have looked to the $15Now campaign in the US which has been at the centre of global fast food strike days of action. So, too, has the New Zealand Unite union, which successfully led the campaign to have zero-hours contracts banned in that country. Unite in London is organising among hotel workers while others, including the PCS civil service union and the Rail Maritime and Transport union are organising outsourced cleaners. Another small union, the United Voices of the World, led a successful 58-day strike of low-paid migrant cleaning workers in the City of London this summer.

There is an element here of the ‘new unionism’ of the late 19th century in Britain and the 1930s in the US, when unskilled workers flooded into the unions that until then had mainly been the preserve of skilled tradesmen. As then, the workers in the gig economy, labouring under the harshest conditions and at the sharp end of the class struggle, can play a leading role in the emerging trade union movement.

Socialist ideas

Marxists had a key role to play in both of these historic developments. In London, Eleanor Marx, a leading socialist and activist – and daughter of Karl – helped draw up the formal rules of the Gasworkers’ Union and the first half-yearly report and balance sheet for 30,000 members. In the US, the Communist League of America, a Trotskyist organisation, was central to the Minneapolis Teamsters’ strike of 1934, immortalised in the book Teamster Rebellion, by Farrell Dobbs.

The $15Now campaign had a massive nationwide boost when a $15 an hour minimum was agreed in Seattle. The election of Kshama Sawant for Socialist Alternative (US co-thinkers of the Socialist Party) onto the city council gave a mighty impulse to this struggle. She also played a key role in the city passing ground-breaking legislation last December to open the door for workers in Uber and others in the gig economy to form trade unions and win collective bargaining.

Kshama’s speech in the council debate totally exposed the exploitative reality of these companies: "I want to start my comments by echoing the comment by my sister Marsha Botzer when she said, ‘Uber does not share, and does not care’. I think that is absolutely correct. The sharing economy, the so-called ‘sharing economy’, is nothing new. It is not innovative. Ever since sharecropping, the sharing economy has meant sharing in one direction – that is, workers have the privilege of sharing what they produce with their bosses. And just like in the past, these workers have to take out loans to buy a car to use for work, and then they are trapped by debt into the sharing economy".

Kshama acknowledged that the legislation was only a start: "The next step for drivers is far more difficult. Drivers will have to put in the long hours to actually build a union. You will have to go around talking to your co-workers. You will have to answer the big lies and myths that big business will continue to use to disrupt your efforts. You will continue to be risking deactivation, and other intimidation tactics. But when you win, you will win a decent life for yourselves and your families, and will be doing a huge service for other workers".

As in the US, the task in Britain is to organise workers in this most precarious of sectors into the trade union movement. But Kshama Sawant’s election shows that political representation is also necessary. Jeremy Corbyn’s Labour leadership re-election campaign has again seen him put the fight for a £10 an hour minimum wage and opposition to zero-hours contracts on his banner. But rapacious capitalism will fight all and every attempts to constrain it. That is why, alongside union organisation, a socialist programme that has a perspective of replacing capitalism with an alternative socialist society is essential.

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