Quote of the Day: The ‘Sharing’ Economy is Screwing Us All

While tech billionaires and sycophantic journalists who report on them laud the hipster friendly ‘Sharing Economy’, the reality is, this is just a buzzword for a new economy that badly screws the poor. Writes Robert Reich:

It’s estimated that in five years over 40 percent of the American labor force will have uncertain work; in a decade, most of us.

Increasingly, businesses need only a relatively small pool of “talent” anchored in the enterprise –  innovators and strategists responsible for the firm’s unique competitive strength.

Everyone else is becoming fungible, sought only for their reliability and low cost.

Complex algorithms can now determine who’s needed to do what and when, and then measure the quality of what’s produced. Reliability can be measured in experience ratings. Software can seamlessly handle all transactions – contracts, billing, payments, taxes.

All this allows businesses to be highly nimble – immediately responsive to changes in consumer preferences, overall demand, and technologies.

While shifting all the risks of such changes to workers.

As a small business owner myself, technological advances make running The Daily Banter far less costly. In fact, it’s probably the only thing that makes us viable. This does not sit well with me as I would dearly love to have a well paid staff of writers, tech developers and administrators, but given the astonishing size and wealth of our competitors (think Gawker, Huffington Post, Buzzfeed etc), it is simply impossible. Giant corporations can afford to spend more on their staff though, but corporate culture now dictates that they don’t.

Michael Moore portrayed this devastating trend in 1989 with the documentary ‘Roger and Me’, where he tried to interview General Motors CEO Roger Smith, who had laid off more than 30,000 people in Moore’s hometown of Flint, Michigan, despite the company being massively profitable. Moore’s documentary revealed the human cost of the sudden loss of employment for such a large number of people, and it was not a pretty sight.

The Sharing Economy is not without merit – it has brought vital sources of income and a degree of flexibility to people who would otherwise be unemployed or underemployed, but it cannot be the driving force of a modern economy. The huge insecurity and volatility of one’s earning capability has a terrible effect not only psychologically, but economically. With no fixed income, no benefits and no sick days, you must literally work every hour possible just to make rent and pay for groceries. Buying a house, investing in education and planning ahead become seriously impractical, and day to day survival becomes the norm. For artists, entrepreneurs and writers, this lifestyle is nothing new. We choose it over conventional careers and accept the insecurity as a trade off for doing something we genuinely love. But for those just trying to have a good career, pay bills, and have a family, it is a complete nightmare. The thought of 40% of the population being subjected to this type of existence is truly horrifying.

As usual, the only winners in this new economy are the ultra rich who profit immensely from worker insecurity and disposable jobs. And as usual, we are supposed to accept it as law because markets supposedly know best. Even when it is crystal clear that they do not.

Ben Cohen is the editor and founder of The Daily Banter. He lives in Washington DC where he does podcasts, teaches Martial Arts, and tries to be a good father. He would be extremely disturbed if you took him too seriously.