Trump’s labor department is giving the gig economy a carte blanche | Ross Barkan
Tech companies shouldnt be free to abuse their workforce without real government oversight. But that is exactly what is happening
Two days before May Day, the Trump administration quietly punished the American worker. In a ruling lost in the din of the Mueller report and the 2020 inanity, Trumps labor department determined that an unidentified companys workers were contractors and not employees a decision that could free tech behemoths everywhere to further exploit the people who help generate their titanic value.
The Trump administration ruled that the company, which apparently pays workers to clean residences, did not have to offer the federal minimum wage or overtime, or pay a share of social security taxes. Though the judgment applies only to this single company, it signals the labor department under Alexander Acosta will give so-called gig companies carte blanche to deny their workers any semblance of benefits.
The Obama administration had issued guidance that suggested gig workers were probably employees, a stand that was rescinded shortly after Donald Trump took office. For anyone paying close attention to the Trump government, this was not surprising. A rightwing president masquerading as a populist, Trump has effectively shepherded a conservative policy agenda bred in thinktanks and academic circles over the last 30 years.
While some coastal elites continue to clutch their pearls over Trumps slovenly demeanor and demented tweeting, they know he is good for business and anything but a disruptor. His tax cuts have helped redistribute wealth further to the top. The supreme court ruled last year that government employees who enjoy the benefits of union collective bargaining dont have to pay union dues, overturning a four-decade precedent.
The labor departments determination is fantastic news for Uber and Lyft, the ride-hail giants set to go public. About to vacuum up billions, theyve never turned a profit. In this fantasy economy of easy credit and rule-breaking, they dont have to. Their model is essentially feudal: let poorly paid drivers do all the actual work while the company reaps all the value as angel investors continue to pour cash into the corporation. Many millionaires and billionaires will be minted, and like any good capitalist grift, the workers will be left with virtually nothing.
The tech industrys abuse of the American worker long predates Trump and Democrats should also be recognized for their fealty to industries that view human beings, especially poor ones, as expendable. Democratic politicians championed the explosion of the ride-hail industry, even as cars clogged roads, drove competing taxi drivers to economic ruin, and starved public transit of revenue as more people chose the convenience of a black car over a train or bus. Democrats also beseeched Amazon to pick their locality for a new headquarters, tossing revenue-sapping tax breaks at an anti-union corporation now worth a trillion dollars.
Trumps latest move should be understood both for what it is and in the context it belongs: to a neoliberal swerve away from the battle for worker empowerment that characterized the first half of the 20th century. Uber has estimated recognizing drivers as employees would increase their labor costs by 20 to 30%. They regard this as a travesty: any move that could raise the standard of living of every day people but cut slightly into the corporations valuation is verboten.
Trump, once a shady real estate developer who routinely stiffed his contractors, relishes this kind of amoral hustleLyft, meanwhile, has been battling new minimum wage requirements for drivers in New York and arguing in court it should not be subject to the Americans with Disabilities Act because it is not in the transportation business. Of course, it is, and Lyft knows it. Like Uber, Lyft references transportation in its IPO.
Trump, once a shady real estate developer who routinely stiffed his contractors, relishes this kind of amoral hustle. Take as much as you can and get out while everyone else gets hurt except you. These tech companies know, despite his unpredictable disposition, they have a spiritual soulmate in Trump.
Now they forge on, unencumbered and emboldened. No modern political organization has embraced social Darwinism quite like the Republican party. Trump is their latest creation, arguably the apotheosis of this idea: the rich should stay rich and nothing matters but the bottom line. Tech companies should be free to abuse their workforce without real government oversight.
This will only change with a new administration, one not blind to the enormous power a select few companies wield over the American economy. Democrats must abandon their love affair with big tech too. Only then will they become a party that represents an actual resistance to the status quo.