Do Airbnb And Uber Herald The End Times?

When we've been warning readers in San Francisco about Airbnb there were numerous reasons. This week former Secretary of Labor, Robert Reich, took on the whole idea of the sharing economy-- aka-- the "gig economy" or the "on-demand economy"-- and the inherent dangers at least in the transition. Obviously, it's not just Airbnb. Another example everyone is aware of is Uber (as well as Lyft). Reich is concerned because so few people are talking about what it'll mean for the social safety net built in this country, built with so much effort, over the past century. "In five years," he insists, "this new economic trend will encompass 40% of American workers"... in a society where "already 2/3s of American workers live paycheck to paycheck."

He wrote to his followers that "that's why it's important that we take action now to figure out how to provide critical labor protections, even as our economy undergoes massive changes. We have to help make sure the changing economy works for workers by preventing the elimination of worker protections such as unemployment insurance, health insurance, worker safety, family and medical leave, and more."

In this holiday season it’s especially appropriate to acknowledge how many Americans don’t have steady work.

The so-called “share economy” includes independent contractors, temporary workers, the self-employed, part-timers, freelancers, and free agents. Most file 1099s rather than W2s, for tax purposes.

...This trend shifts all economic risks onto workers. A downturn in demand, or sudden change in consumer needs, or a personal injury or sickness, can make it impossible to pay the bills.

It eliminates labor protections such as the minimum wage, worker safety, family and medical leave, and overtime.

And it ends employer-financed insurance-- Social Security, workers’ compensation, unemployment benefits, and employer-provided health insurance under the Affordable Care Act.

No wonder, according to polls, almost a quarter of American workers worry they won’t be earning enough in the future. That’s up from 15 percent a decade ago.

Such uncertainty can be hard on families, too. Children of parents working unpredictable schedules or outside standard daytime working hours are likely to have lower cognitive skills and more behavioral problems, according to new research.

What to do?

Courts are overflowing with lawsuits over whether companies have misclassified “employees” as “independent contractors,” resulting in a profusion of criteria and definitions.


We should aim instead for simplicity: Whoever pays more than half of someone’s income, or provides more than half their working hours should be responsible for all the labor protections and insurance an employee is entitled to.

In addition, to restore some certainty to people’s lives, we need to move away from unemployment insurance and toward income insurance.

Say, for example, your monthly income dips more than 50 percent below the average monthly income you’ve received from all the jobs you’ve taken over the preceding five years. With income insurance, you’d automatically receive half the difference for up to a year.

It’s possible to have a flexible economy and also provide workers some minimal level of security.

A decent society requires no less.

You uncomfortable with all the Trumpf supporters now? This is a trend that will inevitably bring a lot more of the kind of anger, frustration, anomie and hopelessness that turns ordinary people into Trumpfists.