Sweating Labor in the Gig Economy and People by Tech

Photographer: Simon Dawson/Bloomberg

New Orleans      In a piece about climate change, one author quoted a commonplace statement that the corporate business model in a capitalist economy puts no inherent value on public resources like land, air, and water, so that the costs are for acquisition, extraction, marketing, and delivery without concern for the after affects like global warming, downstream water or air pollution, and the like.  The burden then falls on the commons, the public, and the government to force regulation or cost recovery, often too little and too late, especially when wealth is increasingly concentrated, and people with lesser income cannot afford the price of restoration.

I’m really not talking about climate change though.  It seems to be that within that business model, app-based and other tech companies fit squarely, if we add people themselves as a natural resource in the same list with land, air, and water, and likely even valued less by many.

Take the business model for Facebook and the rest of the tech companies that is based on selling people’s privacy for their own and corporate billions without paying anything for it, and without being accountable or, until very recently, worrying about the consequences.   Take as another example the continued resistance to dealing with the ubiquitous consequences of enslaving millions that still reverberates throughout every level of the American economy and culture.  Democratic presidential candidates are quick to agree to study reparations, but take my word, oil companies will pay for climate change and Facebook will give us a residual payment on using and selling our data way before reparations are paid for slavery.

In the run up to Uber going public, the company offered a slightly lower opening price valuation than investors had placed on it privately, because they continue to lose literally billions.  A sidebar noted that like Lyft, the company has said they might pay between $100 and $10,000 to longtime drivers, that they don’t acknowledge as employees by paying benefits, social security or unemployment or anything else, but increasingly are finding it harder and harder to recruit in a tight employment market.  Here is another business model that tries to sweat a common resource, people, without paying in order to extract rents or excess profits from their labor for free.  There was a long story of a fulltime driver for Uber and sometimes Lyft in the Bay Area who was barely making it because despite his share of the fares, the fact that he was classified as an independent contractor though totally dependent on the company and their arbitrary division of income, he had to pay all the cost for the vehicle, gas, and maintenance which was clearly unsustainable.

This problem is global as well.  An organizer in Buenos Aires shared with me this week the embryonic efforts to organize personas de platformas or gig workers there.  We have organized multi-union and multinational meetings of bicycle delivery drivers in Europe, but everywhere the organizing problem continues to be the lack of leverage.

Air, water, and land are voiceless.  In modern economic labor, people doing the work are becoming as voiceless as the clickers and likers on social media.  Simply another natural resource to be exploited for as long as they can get away with it.  None of this is sustainable, but stopping it is another matter.


Houses aren’t Homes for the Flippers

New Orleans       No matter how much sugar they put in your coffee, be very prepared to be worried about an additional trend in corporate housing speculation:  flipping is back, bad and hard!

In a contradictory, “what me worry,” “how can this be bad” story in the Wall Street Journal the reporter noted that the in the last quarter of last year the level of house flipping, defined as properties owned less than two years before being sold, is up to almost the same level as they were leading into the housing meltdown at 10.6% in 2018 of total sales now compared to 11.3% in 2006.  Gulp!  The sugar liberally applied then argued that the profits were twice as high on flipping this time around, the flippers were more “professional,” and the homes were averaging ten years older.

I’m still worried, aren’t you?  We’re supposed to not be as worried because the margins are better for the pros, because in reporter Laura Kusisto’s florid, superficial and prejudicial analysis, “Flipping has evolved from the days when cocktail waitresses and cabdrivers lined up to purchase lots in new subdivisions in places like Las Vegas and Phoenix.”  Her comment is a flashing red light of not only class and geographical bias, but a reveal that the reporter has read virtually nothing about the housing market or the ins-and-outs of the crash, which had nothing to do with cocktail waitresses and cabdrivers.

What panics me about the “new flipping” is exactly what the Journal finds reassuring.  Kusisto reports that “Corelogic notes that the flipping market has become more institutionalized.  Corporate sellers made up more than 40% of the flippers in the fourth quarter of 2018, the highest level in CoreLogic’s data and nearly three times the share of the market they had during the last boom.”  Recent articles even in the Journal have pointed out the emerging force of corporate ownership, including huge private equity and hedge funds, in many markets, and this is now crystal clear evidence of their role in unsettling home markets and jacking prices, which is how profits double. Duh!  How can it not be the case that these are profits directly attributable to foreclosures of family homes that were then auctioned off in tranches by Fannie Mae and Freddie Mac to many of these gluttonous operations?

Another clear signal is the fact that ground zero is Memphis, where this kind of corporate ownership has become epidemic.  Memphis is now “the second most popular market for flipping…behind only Birmingham.”  The Journal underscores a Tennessee-based company called Memphis Invest which is buying “a 1000 properties a year in Tennessee, Texas, Missouri, Arkansas, and Oklahoma,”  Their business model is to renovate, rent, and then resell as rental properties to absentee landlords in “expensive markets” like the Bay Area “who can’t afford to buy a home where they live and want an investment property instead.”

What new hell is this?!?  How can we not be worried to the bone about a business model that corporatizes homes into rental units for inexperienced, absentee landlords, forced to jack up the rents on tenants in order to profit from their investment?  This won’t end well for families, cities, or anybody other than a couple of greedy companies and a few of their investors.   The Journal may be right in saying that this is not the same as what helped trigger the Great Recession.  It may be worse.