The Fight for Employment Status for App-workers Broadens

Amsterdam      The Department of Labor under the Trump administration is doing all it can to assure app-based tech companies from Uber, Deliveroo, and others that they will bend over backwards to shield them from classification as directly employed workers rather than independent subcontracts.  Government agencies in an even greater acrobatic twist in the US are saying that they will give employers a “free pass” if they misclassify workers as subcontractors, seemingly encouraging them to do so until caught without making proper payments for taxes and benefits.

California once again acting as the bulwark against such offenses despite being the home state of many of the tech giants specializing in play-pretend work practices around the fiction of independent contracts is on the verge of passing a bill that would clearly determine such workers to be employees rather than contractors.  Besides the Ubers, Lyfts, and wannabes hiding behind apps, it is well known that Google, Facebook, and the rest work hundreds of thousands of contract workers side by side with regular employees in order to save money and keep them out of employment status and benefits.   The companies are playing hardball and threatening to raise $20 million to put any law that is passed on the ballot to California voters to overturn it.  I haven’t seen the polling, but regardless of the tech war chest, I would bet the odds are not naturally in their favor.

This isn’t just a domestic issue, and the going may be rougher in fact elsewhere in the world.  Sitting with colleagues in Amsterdam in preparation for a more extensive meeting, one told how taxi strikes had pushed Uber out of Barcelona recently when they visited and talked to local activists in Spain.

An official from the Netherlands Trade Union Federation (FNV), the largest union in the Netherlands, had successfully engaged Deliveroo and its delivery driver exploitation.  In Netherlands, achieving a certain threshold, unions are able to negotiate collective labor agreements for entire sectors.  FNV argued that delivery was covered under their sector agreements for retail and warehousing.  The government had stalled, claiming the need for study and saying it was complicated.  FNV sued and easily won the case.  The government is still foot dragging he reported, and Deliveroo has challenged the ruling in their own suit, but right now the union clearly has the whip hand and is using it well.

In Mumbai, India, these delivery operations both international like Deliveroo and locally-based are facing a different kind of problem.  Smaller restaurants are banning together and striking in their words by refusing to accept orders.  Their issue is the exorbitant fees, often 25%, being charged by the delivery companies for their service which are forcing the food establishments to lose money on every order.  Our own social enterprise, Fair Grinds Coffeehouse, walked away from all delivery inquiries after a one-month trial with Uber Eats that quickly convinced us that there was no way it benefited the coffeehouse, workers or anyone but the Uber people.

The business model seems predicated on worker exploitation to save money and sourcing exploitation on unprovable claims of customer expansion.  Customers may enjoy transitory cost savings and convenience, but the model ultimately seems unsustainable when based on such sinking sand.


Contracts for Deed Dominate Midwest LMI Housing Purchases

New Orleans     Ann Carpenter works with the Federal Reserve Bank in Atlanta.  Her work in understanding the challenges and predation for lower income families trying to buy homes has been outstanding.  Almost exactly two years ago, the ACORN Home Savers Campaign met with her in a conference room at Georgia State University in an amazing meeting in which she shared her insights from the data research, and we shared what we had learned on the doors as organizers with the help of GSU social work students.  We have eagerly awaited seeing her full report which has now been released with co-authors Taz George of the Fed in Chicago and Liza Nelson with the Cleveland Fed.

In their report, entitled “The American Dream or Just an Illusion?  Understanding Land Contract Trends in the Midwest Pre- and Post-Crisis,” they invaluably look at the prevalence and impact of land contract sales by individual families rather than institutional investors in communities of color, low income communities, and distressed housing markets.  Accessing a huge database, they were able to focus on the years since the recession in six states:  Michigan, Ohio, Wisconsin, Minnesota, Indiana, and Iowa.

You’re not going to read their full report, but here are the highlights:

  • Land contracts are still the wild west where families without access to other credit sources have little protections. They found that Florida, Maryland and Oklahoma have protections equivalent to standard mortgages, while Texas, Illinois, and Ohio offer some level of protections after a certain percentage of the contract is fulfilled including return of down payment and repair investments in some cases.
  • Their database showed that 69% of land contracts were in these six states with Michigan holding 25%, Ohio 13%, and Wisconsin 11%.
  • They caution that though these states require recording, this data likely understates the level of land contract activity, reflecting perhaps at most only 25% of actual transactions.
  • The median level for land contract sales was $74,000 with more than 70% at less than $100,000.
  • 45% of the sales were less than half of the price of standard mortgage sales in these markets after the recession.
  • In Wayne County, containing Detroit, 49% of the contract land sales were less than $53,000 in 2005 and increased to 57% in 2016, and credit narrowed.  A report chart showed that contract sales where overwhelming compared to banks’ sales under Home Mortgage Disclosure Act (HMDA) reporting.
  • The report shows that land contract sales are dominating the market for $50,000 or below sales price homes.

You get the message.  This is bad business.  Carpenter and her co-authors were Federal Reserve careful in coming to rash conclusions, but even the most cursory reading underscores the fact that lower income families trying to access home ownership at the lower end of the market that they can afford are still being deserted by the banking and normal credit system and herded into land contract sales lacking better, cheaper, and more secure options.