Low-Wage Workers & the Internet Industry

What are the overall impacts of tech companies on occupational structures, employment patterns, and labor practices? This question is large, complicated, and vital.[1]

To engage it, a meaningful starting-point pertains to low-wage workers. As well-compensated engineers and entrepreneurs have been raised up as the Internet industry’s public face, low-wage workers have become a mere afterthought. The very terms that analysts use to characterize this category of workers suffer from ambiguity and imprecision: “flexible,” “independent,” “temporary,” “contingent,” “freelance,” “casual,” “precarious.”  The International Labor Organization (ILO) states, simply, that such workers fall within a “non-standard form” of employment.[2] Two facts, however, are certain. First, low-waged workers are crucial to the business models that are being advanced by Internet companies.  Second, low-wage workers in the “new economy” are increasingly pursuing “old-economy”-type job struggles and demands.[3]

To press ahead from here, a conception of the labor process is essential.

The Labor Process

Identified and explicated forty years ago by Harry Braverman,[4] and further clarified by historians and political economists, the labor process provides an irreplaceable analytical fulcrum. Both to cheapen costs and to augment control,[5] capital has continually attacked the labor process as it exists, with the aim of altering and even reconstituting everything from the content and sequencing of specific job-tasks, to the technical division of labor within companies and industries, to the location of production processes. Beginning during the 1970s, a new and expanded cycle of innovations around networks and other ICT tools permitted capital to intervene in the labor process across an unprecedented range, which encompassed an increasing number of information-processing jobs.[6] Making explicit, aggregating and codifying what had been workers’ tacit knowledge, and/or generating and collecting new categories of data, corporate suppliers and corporate users of networks worked to standardize more tasks and to quantify more outputs. Managers, as Huws explains, gained new freedom to disaggregate and reorganize work, and to relocate or contract it out in line with their varied corporate strategies.[7]

Prominent recent examples of this much wider trend include Uber and its rival, Lyft, alongside rental platform Airbnb, labor outsourcer TaskRabbit, the Instacart grocery delivery service, and the dry cleaning service Washio. Such companies invade existing industries by deploying network resources to compile, codify, rearrange and contract out existing labor processes. In the process they extract data from, and push costs onto, workers and users alike.

Uber is known for the development of its “innovative” app that allows pretty much anyone who owns a car to become part of the company’s workforce – “instant” employment without a fuss. Uber drivers and riders directly connect through the Uber app, using GPS data to show riders the closest drivers. UberX, the service where drivers use their own cars, formulates its costs both per mile and per minute with base fares set by the company; these inputs vary in different cities. Moreover, Uber deploys a dynamic (or “surge”) pricing model so the fare depends on the supply of service and the demand for it; the company charges more when there is greater demand. Uber fares are not always cheaper than taxis, but many users are willing to pay for the convenience and flexibility of using Uber.[8]

Uber takes a 20{17f48941629941408d54a014d0f93d93b36accbdc22b35d759326eee58f33f56} cut from each fare in exchange for the use of its app and infrastructure. However, this is not the full picture of Uber’s business model. In fact, its profit mechanism hinges on thousands of contractor-workers – whom Uber does not reimburse for fuel, car, or insurance and does not pay for sick days and payroll taxes.[9] Uber, in other words, has shifted a large portion of its operating costs onto its drivers – whose “flexible” jobs thus may be seen as the tent pole of its business.

The rapidity with which this one company has built up its scale is testimony not as much to its entrepreneurial genius, however, as to the dismal jobs picture. Uber boasts that it has 1.1 million drivers – over a million low-wage, disposable workers – spread across 250 cities in 53 countries. [10] In the United States alone, it claims to have 400,000 drivers.[11]  The company promotes its business to drivers wanting to earn “extra” cash in their “spare” time; according to Uber’s own survey, however, the reality is that one-third of its drivers enlist “while looking for a steady, full-time job.”[12] Being an Uber driver is not a hobby to make “extra” income; for many people, it is part of a struggle to make ends meet.[13]

Today’s enlarged low-waged labor pools of course have not been tapped solely by Uber. E-commerce giant Amazon, which employs 154,100 full-time employees, relies on 40,000 warehouse workers – and tens of thousands of “seasonal” workers[14] – whose working conditions have been described as grueling and pervasively controlled.[15] Amazon also contracts with no less than a half-million so-called “mechanical turks” around the world[16] to perform various micro-tasks that computers are not able to accomplish, under rigidly prescribed conditions. Mechanical turks earn between $1.20 and $5.00 an hour.[17] TaskRabbit – a platform that outsources various odd jobs from mundane errands to wrapping gifts to assembling IKEA furniture – aggregates and auctions off fragmented labor around the world. It’s like eBay, but vetting labor instead of products. As of 2014, TaskRabbit supplied 30,000 workers in 19 cities in the US and London[18]; and it is trying to figure out ways to circumvent labor laws and expand its business to Paris, Dublin, Zurich and Munich. And, while Airbnb has garnered extensive media coverage for the violent gentrification it has helped to engender in many cities, its labor record has received less scrutiny. The company has spawned parasitic businesses such as house cleaning, greeting services, check-in/check-out, and property management etc. which are outsourced to individuals or through other third-party services like TaskRabbit and its ilk.[19]

Might these low-wage workers, however, be merely a transitional phenomenon – a fleeting perturbation – because the future belongs instead to a hugely escalating process of automation?

Automation

For two centuries, automation – the replacement of human workers by machines – has been a continually growing trend within capitalism. Recent reports have underlined that a renewed, much-expanded program of automation now threatens an unprecedented range of jobs.[20] Computer- and electronics products; electrical equipment and appliances; transportation; and machinery industries are leading the trend.[21] More generally, jobs once exempt from substitution are quickly coming into the line of fire.

It’s within this widened context that we may reevaluate some of the same companies that we’ve just considered. In early 2015, Uber announced that it was developing self-driving cars which could replace drivers who are struggling to gain permanent – rather than contract – employment status and bargaining rights.[22] And Google, a major Uber investor, is launching its own self-driving taxi service in San Francisco and Austin, Texas. Mayor Bill de Blasio in New York City has already signed a contract with Google to replace the city’s yellow cabs with Google’s driverless cars. 5000 driverless cabs are expected on New York City streets by the end of 2016.[23]

Meanwhile, Amazon is investing millions of dollars in warehouse automation, deploying robots and drones for fulfillment and delivery. In 2012, Amazon acquired automatic warehouse-robotics company Kiva for $775 million and it now deploys 15,000 robots to fill orders faster than human labor in its warehouse facilities[24] – reducing fulfillment costs by $450 million to $900 million in North America in the process.[25] The company is also deploying drones for delivery.  The costs of coordinating the airspace in which drones operate are to be externalized, at least in part, and borne by taxpayers rather than by Amazon and other commercial drone-users.

Capital’s current automation drive is indeed now itself arguably a government priority. A company called SoftWear Automation is developing machines for the garment industry, whose women workers typically toil under unsafe and heavily monitored conditions.[26] The U.S. Defense Advanced Research Projects Agency’s 2012 contract awarded to SoftWear Automation was small ($1.25 million), but it served an ambitious purpose: “complete production facilities that produce garments with zero direct labor is the ultimate goal.”[27] U.S. military robots of course are a more expensive and wide-ranging endeavor.[28] Across the Pacific Ocean, in low-wage China, capital is likewise attempting to shift from labor-intensive manufacturing to more automated production systems. Perhaps the most well-known instance concerns the Taiwanese company Hon Hai, or Foxconn, the world’s largest electronics manufacturing contractor. In its push for factory automation in China and elsewhere Foxconn boasts that, by 2020, it will replace 30{17f48941629941408d54a014d0f93d93b36accbdc22b35d759326eee58f33f56} of its million-strong workforce with many of its new “foxbot” robots.[29]

Once more, automation is arriving not only to drive down costs but also as a means of restoring capital’s power – amid burgeoning protests by low-wage workers. Automation is not an ineffable byproduct of “the market” but, rather, a concrete strategy that is often pursued in a context of class struggle.

In China, labor conflicts have increased for over a decade; workers have protested in several industrial cities.[30] Foxconn became an especially well-publicized target between 2009 and 2013, when its brutal working conditions and unfair pay practices engendered a spate of worker suicide-attempts.[31] More concertedly collective forms of worker organization and protest are evident also, in China, the United States, and Europe. The Seattle City Council recently voted to allow collective bargaining rights to drivers for Uber;[32] Amazon warehouse workers in Germany went on strike repeatedly throughout 2013 and 2014;[33] Facebook shuttle bus drivers voted in November to join Teamster Union Local 853 in San Leandro, California,[34] and Apple and Yahoo drivers followed them.[35] Warehouse and shipping workers at Google’s delivery service, who are supplied by a temp company, likewise voted in 2015 to unionize.[36] Meanwhile, existing taxi service drivers in San Francisco, Boston, Philadelphia, and across Europe are protesting against Lyft and Uber, demanding that their city governments regulate or completely shut down both interlopers.[37]

It is imperative, finally, to comment briefly on the fact that network-enabled alterations of the labor process – incorporating both low-wage workers and automated tasks – are feeding into dynamic processes of working-class recomposition.

Class Reorganization

A gigantic and multiform process of class reorganization has been set in motion. Wrapped up in it are structural changes that extend far beyond networks per se – notably, the collapse of socialism and the rise of a truly global capitalism. China’s reintegration into the capitalist political economy provides the most often-cited illustration. In a matter of a few decades, tens of millions of rural subsistence farmers have turned into factory wage-earners who manufacture everything from toys and clothing and household goods, to iPhones and other consumer electronics products.[38] However, this process spans beyond China: from Brazil and the old Soviet Union to India and South Africa, wage-earning working classes have recently become much-enlarged. Digital capitalism has engendered proletarianization on a historic scale.[39]

Seen from the perspective of the boardroom, this process shrinks down to a re-articulation of commodity chains[40] in which digital systems and services are decisive: through networks, big corporations become able to coordinate production and distribution across dozens of nationally dispersed labor- and product markets. Seen in less constricting terms, however, we are living amid a global remaking of class identities and class relationships – and this involves far more than networks. Moreover, it cannot be grasped as a passive phenomenon, that is, merely “in terms of an enlargement or reshaping of the global wage-earning class.”  Instead, “the recomposing working class also has been the bearer of this transformation, actively experiencing, pondering, communicating, and, at points, contesting it.”[41]

Spearheaded by capital’s radical transformation of labor processes and its related program of automation, employment that can be replaced, automated or offshored at a moment’s notice is increasing. Walmart workers and Uber drivers, mechanical turks and garment workers, Amazon warehouse employees in Germany and worker-peasants toiling in factories in China – all are part of the makeup of recomposing working classes.

What may be signified, as these enlarged and reorganized working classes alter in experience and consciousness? – For the moment, it is enough simply to point to the necessity of posing this question. Answers will continue to arrive.

[1] Scholars such as Richard Maxwell, Ursula Huws, Catherine McKercher, Vincent Mosco, Jack Qiu and Christian Fuchs join both of us in working to clarify the status of labor in digital capitalism.  There are significant points of controversy.  Richard Maxwell, The Routledge Companion to Labor and the Media. New York: Routledge, 2016; Ursula Huws, Labor in the Global Digital Economy: The Cybertariat Comes of Age (New York: Monthly Review Press, 2014); ShinJoung Yeo provides an extended case study of occupational structures and employment practices in the search engine industry, in her dissertation titled “Behind the Search Box: The Political Economy of a Global Internet Industry” (PhD diss., University of Illinois Urbana-Champaign, 2014).

[2] International Labor Organization, World employment and social outlook 2015: The changing nature of jobs, International Labor Office, 2015.

[3] Susie Cagle, “Tech’s low-wage workers disrupt the disruptors,” Aljazzera America, October 18, 2013 ; S.E. Smith, “Silicon Valley’s Labor Uprising: Unions are spreading like wildfire through tech’s low-wage workforce,” In These Times,  September 7, 2015.

[4] Harry Braverman, Labor and Monopoly Capital: The Degradation of Work in the Twentieth Century (New York: Monthly Review Press, 1974).

[5] Tessa Morris-Suzuki, “Capitalism in the Computer Age,” in Cutting Edge: Technology, Information Capitalism and Social Revolution 1997, ed. by Jim Davis, Thomas A. Hirschl, Michael Stack (London; New York: Verso 1997), 57.

[6] Dan Schiller, Digital Depression: Information Technology and Economic Crisis (  Urbana: University of Illinois Press, 2014), 15-26.

[7] Ursula Huws, Labor in the Global Digital Economy: The Cybertariat Comes of Age (New York: Monthly Review Press, 2014), 95.

[8] Maya Kosoff, “Researchers have found the dollar amount you need to spend to make an Uber cheaper than a taxi,” Business Insider, Mach 17, 2015 ; “Data Mining Reveals When a Yellow Taxi Is Cheaper Than Uber,” MIT Technology Review, March 16, 2015.

[9] Allison Moddie, “Hillary Clinton criticises the Uber business model for exploiting workers,” Guardian,’ July 14, 2015.

[10] Ian Kar, “Uber is trying to lure new drivers by offering bank accounts,” Quartz, November 3, 2015; Steven Greenhouse, “Uber: On the Road to Nowhere,” American Prospect (This article will appear in the Winter 2016 issue of The American Prospect magazine) ; Carolyn Said, “Lyft, Uber drivers’ turnover high, wages low, survey finds,” SF Gate, October 23, 2015.

[11] Ibid.

[12] Brian Solomon, “The Numbers Behind Uber’s Exploding Driver Force,” Forbes, May 1 2015.

[13] Pat Garofalo, “Last Ten Years Of Wage Gains Lower Than During The Great Depression,” Think Progress, June 30, 2011.

[14] Jessica Hullinger “13 Secrets of Amazon Warehouse Employees,” mental floss, November 4, 2015; Adam Satariano & Spencer Soper, “What Amazon Wants for Christmas: 100,000 Temps,” BloombergBusiness, December 10, 2015/

[15] Nathaniel Mott, “Don’t be surprised at how Amazon treats its workers,” Gigaom, August 18, 2013 ; Jodi Kantor and David Streitfeld, “Inside Amazon: Wrestling Big Ideas In A Bruising Workplace,” New York Times, August 15, 2015

[16] Jeremy Wilson, “My gruelling day as an Amazon Mechanical Turk,” Kernel, August 28, 2015; Illy Irain, “The Cultural Work of Microwork,” New Media & Society, 17(5) (2015): 720-739.

[17] Ibid.

[18] Sanjiv Bhattacharya ,“TaskRabbit: How an app can relieve you of all your chores,” Telegraph, December 5, 2015.

[19] Samantha Shankman, “The Startup Businesses Built Around the Airbnb Ecosystem,” Skift, November 18, 2015.

[20] Martin Ford, Rise of the Robots: Technology and the Threat of a Jobless Future (New York: Basic Books, 2015); “Automation Angst,” The Economist,  August 15, 2015; Derek Thompson, “What Jobs Will The Robots Take?” The Atlantic,  January 23 2014  ; McKinsey Global Institute, “Digital America: A Tale of the Haves and the Have-Mores,” December 21, 2015.

[21] Paul Davidson, “More robots coming to U.S. factories,” USA Today, February 10, 2015, ; Beth Mattson-Teig, “Automation Propels U.S. Manufacturing Forward,” Area Development, Fall 2013.

[22] Angela Moscaritolo “Report: Google to Take on Uber With Self-Driving ‘Rides for Hire,” PC magazine, December 16, 2015.

[23] Ibid.

[24]  Marcia Kaplan, “Will Robots Take Over Ecommerce Warehouses?” Practical Ecommerce, September 10, 2015.

[25] Ibid.

[26] “A robotic sewing machine could throw garment workers in low-cost countries out of a job,” Technology Quarterly, 2015.

[27] David Szondy, “DARPA looks at developing robots to sew uniforms,” gizmag, June 18, 2012.

[28] Barb Darrow, “Why the Marines Don’t Want Google’s Robots in Combat,” Fortune, December 31, 2015 .

[29] “Foxconn to realize 30{17f48941629941408d54a014d0f93d93b36accbdc22b35d759326eee58f33f56} automation by 2020,” gbtimes, July 3, 2016; Kevin Chan, “Robot revolution sweeps China’s factory floors,” Phys.org, September 23, 2015.

[30] Wong Kam Yan, “China’s Worker Protests: A Second Wave of Labor Unrest?” Solidarity, March/April 2006; Chun HanWong, “China aims to soothe Labor Unrest,” Wall Street Journal, April 8, 2015

[31] Jenny Chan, “A Suicide Survivor: The Life of a Chinese Migrant Worker at Foxconn,” truthout, August 23, 2013; Jack Qui, Inside Foxconn, December 16, 2010.

[32] Daniel Beekman, “Seattle first U.S. city to give Uber, other contract drivers power to unionize,” Seattle Times, December 14, 2005.

[34] “Amazon HQ faces protest by German union,” USA today, December 16, 2013, ; Melisa Eddy, “Strikes at Amazon Warehouses in Germany End for Now,” New York Time, September 24, 2014; Amelia Rosch, “Unionized Amazon Workers in Germany Go On Strike Over Wages And Conditions,” ThinkProgress, December 8, 2014.

[34] Mike Murphy, “Facebook shuttle drivers approve union contract,” Siliconbeat, February 23, 2015.

[35] Gregory Wallace, “Apple, Yahoo bus drivers vote to unionize,” CNN Money, March 1, 2015.

[36] Mark Bergen, “Google Express Workers Vote ‘Yes” To Union, as Warehouses Plan to Shut Down,” re/code,  August 21, 2015.

[37] “Taxi drivers clog Philadelphia street to protest Uber,” San Francisco Chronicle,  December 16, 2015; Alissa j. Rubin and Mark Scott, “Clashes Erupt Across France as Taxi Drivers Protest Uber,” New York Times, June 25, 2015; “London taxi drivers protest against Uber,” CTV London News, September 16, 2015.

[38] Yu Hong, Labor, Class Formation, and China’s Informationized Policy of Economic Development (Lanham, Md. : Lexington Books, c2011).

[39] Dan Schiller, “Labor and Digital Capitalism,” in R. Maxwell, Ed., The Routledge Companion to Labor and Media (New York: Routledge 2015):11-14.

[40] Dan Schiller, “Rosa Luxemburg’s Internet? For a Political Economy of State Mobilization and the Movement of Accumulation in Cyberspace,” International Journal of Communication 7, 2013; Dan Schiller, Digital Depression: Information Technology and Economic Crisis (Urbana : University of Illinois Press, 2014).

[41] Dan Schiller, “Rosa Luxemburg’s Internet? For a Political Economy of State Mobilization and the Movement of Accumulation in Cyberspace,” International Journal of Communication 7, 2013: 10.