Tag Archives: Gig Economy

The New Normal: Radical Inequality, Suffocating Debt, and Growing Job Uncertainty

By Servaas Storm – The U.S. economy is suffering from two interrelated diseases: the secular stagnation of its potential growth, and the polarization of jobs and incomes. The two disorders have a common root in the demand shortfall, originating from the ‘unbalanced’ growth between technologically ‘dynamic’ and ‘stagnant’ sectors, which—crucially—is bringing down potential growth.

The key mechanism is just this: rising real wages, as during the period 1948-1972, provide an incentive for firms to invest in labor-saving machinery and productivity growth will surge as a result; but when labor is cheap, as during most of the period 1972-2015, businesses have little incentive to invest in the modernization of their capital stock and productivity growth falters as a consequence.

Financial globalization, in addition, enabled the rich to have their cake (profits) and eat it (by channeling them to offshore tax havens or into derivative financial instruments). In this way, trade and financial globalization have been essential building blocks of the dual economy. more> https://goo.gl/5EFndw

The economy is more a messy, fractal living thing than a machine

BOOK REVIEW

In Our Own Image: Savior or Destroyer? The History and Future of Artificial Intelligence, Author: George Zarkadakis.

By George Zarkadakis – Mainstream economics is built on the premise that the economy is a machine-like system operating at equilibrium. According to this idea, individual actors – such as companies, government departments and consumers – behave in a rational way.

Ever since the invention of the assembly line, corporations have been like medieval cities: building walls around themselves and then trading with other ‘cities’ and consumers.

The so-called ‘gig economy’ is only the beginning of a profound economic, social and political transformation. For the moment, these new ways of working are still controlled by old-style businesses models – platforms that essentially sell ‘trust’ via reviews and verification, or by plugging into existing financial and legal systems.

Blockchain technologies promise to replace these trusted third parties with a huge digital record book, spreading out organically across a network of computers that grows and changes but can’t be meddled with.

By getting rid of middlemen, they’re likely to radically reduce transaction costs, and accelerate the mixing of many different actors in the new economy who have been freed from the grip of leaders or institutions. more> https://goo.gl/Gs6f4B

Connecting People to Prosperity in the Exponential Age

By Vanessa Bates Ramirez – “Our assumptions about how economies function no longer seem to hold true entirely because of exponential technology.”

This claim came from entrepreneur and Singularity University faculty member, Amin Toufani.

In what he calls exponential economics or “exonomics,” Toufani breaks the tech-driven changes happening in the modern economy into seven pillars: people, property, production, price, power, policy, and prosperity.

Toufani pointed out that exonomics’ ultimate goal is to connect people and prosperity.

“Technology is empowering all of us, and people seem to be doing what companies used to do and companies seem to be doing what governments used to do,” Toufani said.

The democratizing effect of information technology is enabling small teams to have an outsized impact. He showed a graph of collaboration app Slack’s user growth, and it’s practically a vertical line. A few years old, Slack reaches millions of users, many of whom pay for the service, and was recently valued upwards of $9 billion.

The kicker? Slack was created by a team of 12 software developers. And it’s far from the only such example. more> https://goo.gl/wpBRPz

Uber deal shows divide in labor’s drive for role in ‘gig economy’

By Daniel Wiessner and Dan Levine – Rideshare companies say contracting, rather than employing, workers keeps costs down and provides the flexibility drivers say they want.

But contract workers are not entitled to the same legal protections employees enjoy, including minimum wage guarantees and overtime pay.

Organized labor has struggled with how to react with the new realities of the rapidly growing part of the economy dominated by gig, or temporary and contract, workers. Some union officials have argued it’s crucial to engage in new ways with the changing nature of labor, while others have doubled down on traditional organizing.

The one thing all sides agree on is that the struggle over how to organize labor in the new economy is just beginning, and for some observers, that’s not a terrible thing. more> http://goo.gl/FnAOAy

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See How Big the Gig Economy Really Is

By Katy Steinmetz – Peer-to-peer transactions, numbering in the ­hundreds of thousands each day, bypass the traditional employer-employee relationship in ways that are befuddling regulators in cities and states across the country. The new companies—they often call themselves “platforms”—don’t seem to fit the old models.

This raises many questions, among them:

Can algorithms replace human managers?

Do these business models demand a rethinking of labor laws?

Or are companies just using new tools to get up to old tricks that give them an edge? more> http://goo.gl/dfKASr

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