Abstract
Mary Van Kleeck was an American industrial social worker who became a radical critic of the New Deal and Wagner Act in the 1930s (Daniel, 1980). She warned that government regulation would necessarily redound to the detriment of the labour movement under capitalism. In the absence of significant constraints on capital, owners would retain advantages that would render worker gains insecure. While her position was doctrinaire, she was right to suggest limits to the emancipatory implications of the Wagner Act and comparable legislation around the globe. Two impressive volumes, Labor in the Age of Finance and Labour Law and the Gig Economy, lend credence to Van Kleeck’s fears about the precarity of labour power. Worker protections in labour law have not been an adequate match for ‘financialization’, which has shifted power from management and collective bargaining to capital markets. This process has undermined many of the achievements of collective bargaining. The increasing power of shareholders has reduced labour income and advantaged capital. More recently, financial institutions have facilitated the construction of highly exploitive, vertically integrated digital enterprises, as reflected in the Gig Economy.
Sanford Jacoby, a Labor and Industrial Relations Professor at UCLA, provides a detailed account of a variety of US labour campaigns to contend with this ‘financialization’. Some union-friendly pension fund managers (e.g. those at the California state pension system) sought to improve corporate governance practices in the firms in which they held stock. (Jacoby calls the labour agenda here the ‘cookbook’, emphasizing greater transparency in governance.) Others attempted to combat unfair labour practices, create good union jobs, or build membership through stockholder initiatives. Unions experimented with capital strategies, seeking to employ the increasing power of stockholders to the advantage of labour. New investor coalitions brought former adversaries into new relationships.
In the tumultuous 1980s, unions also introduced the corporate campaign, an effort to mobilize investors, banks and the public in corporate boycotts. Critics of the Service Employees International Union like Jane McAlevey (2016) argued that the gains won through corporate campaigns and neutrality agreements generated ‘sweetheart agreements’ and top-down unionism. The SEIU was one of the few unions to score memberships gains.
There was considerable experimentation with the new model of labour advocacy across enterprises, governments and financial institutions to respond to the challenge posed by the decline of stakeholder-responsive corporations. Jacoby finds the results of these union campaigns modest at best. He notes that, while union investors helped alter the governance of some of the nation’s largest corporations, labour continued to lose power.
However, one might argue that the outcomes of labour’s capital strategies have been varied and difficult to characterize broadly. US industrial relations, at least, is differentiated, with labour influence absent in some states and industries, and substantial in others, and in flux. One cannot dismiss the value of pushing pension trustees to considering the employment consequences of financial decisions (rather than merely advancing the cookbook). Moreover, labour-based housing investment trusts have expanded the supply of moderate-income housing. For example, the Sustainable Investment Hub for Industrial Appalachia, AFL-CIO Housing Investment Trust, and the West Virginia Labour Federation are collaborating to build a housing complex in a depressed community with union jobs. This demonstrates a model that can be dramatically extended.
The Steel Valley Authority represents another set of capital-related initiatives through which steelworkers around Pittsburgh have sought to preserve employment and enterprise. This is a Sisyphean task but at the very least it builds labour expertise and promises future successes.
The diffusion of these precedents will take time. The development of worker influence on investment decisions is a worthy goal that will ultimately require more profound institutional experimentation. Unfortunately, Rifkin and Barber’s vision of social transformation through pension funds (Rifkin and Barber, 1978) remains distant.
Jacoby’s Labor in the Age of Finance is an excellent piece of scholarship illuminating decades of industrial relations transformation. Interpreting the complex of developments is difficult and as a matter of existential hope, I choose to see the outline of an experimenting labour movement developing capacity to meet the perilous moment.
Jacoby’s book underscores the continuing problem of the scope of collective bargaining, which contracted in the years following the New Deal in the US, as property rights secured the loyalty of jurists and policy-makers. (For example, the employer’s right to permanently replace strikers played an important role in the destruction of unions in the 1980s.) The now dominant power of finance has sought relief from collective bargaining in a variety of ways and the digital economy promises to dramatically expand the sphere of independent contractor and gig worker protections. This latter problem is the concern of Labour Law and the Gig Economy.
Labour Law and the Gig Economy, edited by Jo Carby-Hall (University of Hull) and Lourdes Mella Méndez (Universidade de Santiago de Compostela) is an impressive international survey of the emerging problems of the ‘Gig Economy’, digital platform enterprises that permit vast economies at the expense of workers’ wages and status. Algorithm-based enterprise greatly accelerates the trend towards contingent employment, now ‘just-in-time’, a highly flexible employment system particularly to the advantage of owners. The gig sector brings new challenges for organized labour and labour standards regulation, and more disruption to traditional brick and mortar enterprises.
As the 13 chapters of the book indicate, the platform enterprise is emerging across the globe. The authors cover developments in the United Kingdom, Russia, India, China, Portugal, Egypt and other Arab states, Spain, Belarus, Poland, France and elsewhere. I have seldom seen a volume with such comprehensive international coverage. The editors provide a detailed introduction and conclusions to enhance the collective project.
The book’s contributions reveal a technological revolution that is global in dimension. It is the ‘fourth industrial revolution’, digitalization. It follows the previous three: the mechanization of production with water and steam, mass production and electrification, and automation facilitated by information technology.
The reader will find multiple vexing dilemmas emerging from the application of digital technologies. With technology facilitating on-demand employment, the worker potentially loses desirable elements of traditional employment, including living wages, benefits and meaningful worker input. Employers are in many cases misusing the concept of the ‘independent contractor’, declaring that employees tied to the platform are the equivalent of independent entrepreneurs. Blockchain and other advanced technologies enhance opaque regimes of technical control that may conceal abuse and compromise privacy. Virtual employment increases the danger of working time displacing family time. Digital technologies have the tendency to create an uninterrupted connection of the employee to the enterprise. The wide availability of social networks has led employers to seek to exercise control outside the workplace, and even to penalize employees for trivial violation of non-compete agreements.
Digital technologies may facilitate the assembly of evidence to justify employer discipline and discharge. The courts must consider the legality of the acquisition of the evidence as well as the elusive ‘balance’ of the interests of employers and employees.
Many worry of the automation of a large subset of low-skill jobs, vast unemployment and declining income. Digitalization potentially produces an acceleration of automation and organizational transformation. Routine and ‘low-skill’ jobs (as well as some professional work) may disappear: self-driving cars and AI are growing in importance. Some of the authors worry that significant subsets of national populations will face impoverishment. Income support and retraining initiatives will become globally critical. In individual nations and in the European project, political systems are being tested: will workers’ social protections be fundamentally eroded?
One interesting detail of these two books is that US Supreme Court Justice Louis Brandeis appears in both. In Jacoby’s Labor in the Age of Finance, Brandeis appears as an advocate of labour banking. In Labour Law and the Gig Economy, he is cited as an early proponent of the right to privacy. His interests in worker cooperatives might also be mentioned.
This leads to a contradictory reality not acknowledged by the Gig Economy scholars. While several argue that national policies have generally not kept pace with the profound technological change of digitalization, and that employers are able to remove employees almost entirely from the sphere of labour protection, neither Van Kleeck nor Brandeis would have been at a loss for institutional remedies.
Chapter summaries
In the first chapter, Jo Carby-Hall evaluates the 2017 Taylor Review of Modern Working Practices in the UK, an important effort to grapple with gig work and other contemporary developments in employment. He indicates that he is sceptical of the value of wholesale change in employment legislation and satisfied that common law and labour tribunals can cope with modern problems. However, he is supportive of statutory clarification of genuine ‘independent contractor’ or ‘self-employment’ status.
Daria Chernyaeva addresses the significance of blockchain technologies: direct interaction between computers, distributed data management processes, without a single human authority. One might argue that the absence of self-interested actors would facilitate the enforcement of legal standards and accuracy in the processing of documents but there are not necessarily any mechanisms that prioritize the protection of workers. Notably, Russia is employing blockchain for human resource management but proper regulations lag.
Durgambini A Patel writes of India, whose economy has dramatically expanded with the acceleration of outsourcing. India now has a 37% share of global outsourcing jobs. On the other hand, the author explains that these jobs are insecure and at the expense of local enterprise and culture. As in other countries, digitalization contributes to the automation of routine jobs and increasing inequalities.
Alaa Eltamimi covers much of the Arab world and notes that, amid unrest and revolution, policies to address technological change have not been developed. Trade unions played a role in the Arab Spring but have not had the capacity to address this problem. Eltamimi finds the impact on youth unemployment a particularly vexing issue. Inequality remains a critical dilemma.
Duarte Abrunhosa e Sousa explores social networks in employment and the employers’ possible abuse of them to police non-compete clauses. For example, can an employee update her status on LinkedIn without triggering employer scrutiny and legal action? In this case, as in many others, employers have sought to leverage new technology to substantially enhance their powers.
Julia Tomassetti contributes a particularly valuable chapter on expansive definitions of property rights and their impact on workers’ rights. She contends that scholars have examined the interpretation of property rights as they apply to collective bargaining but not in relation to the law of employment generally. For example, Uber seeks to exempt its riders from legal protection by asserting the ‘integrity’ of the platform and its algorithms and to deny that the corporation itself directs the drivers. Uber renders its control less visible by emphasizing property over contract. In order to make sense of the property/contract distinction, Tomassetti examines US National Labor Relations Board decisions and argues for a return to a contractual regime.
María Carmen López and colleagues address the need for limitations on video surveillance and the use of private detectives with respect to employees. The European Court of Human Rights has promulgated a standard of ‘proportionality’ in this sphere and the proper balance of employer and employee interests remains elusive across member nations.
Artur Rycak considers privacy in chapter eight (also under the jurisdiction of the European Court of Human Rights). He notes that digital technologies pose a growing challenge to employee concerns for privacy and work/life boundaries. As he and other contributors suggest, digital technologies potentially erase the concept of ‘time off’, requiring some level of attention to platform directives throughout the day. Digital connection can inhibit human interaction in the real world and exacerbate isolation. Chapters nine, ten and eleven, by Tatsiana Ushakova, Sarai Rodríguez González and Loïc Lerouge, respectively, provide additional detail on the struggle to protect work/life balance and establish a right to digital disconnection in France, Spain and Europe more generally.
Lourdes Mella Méndez introduces the issue of digital evidence (email or digital audio, for examples) in judicial proceedings in the human resource management context in chapter twelve. Email and digital audio are increasingly important as forms of evidence. The author examines termination decisions relying on or buttressed by digital evidence. Evidence obtained in violation of workers’ rights undermines the employers’ case for termination (unless the case is based on prior evidence lawfully acquired). In the final chapter, Francisca Ferrando García, Monserrate Rodríguez Egio and Antonio Megías-Bas further explore email as a form of evidence in worker control and discipline. These contributions among others make for a long, detailed and complex book that is best suited for selective reading based on particular interests.
Conclusions
Labour Law and the Gig Economy is a valuable reference work. The editors provide a useful synthesis in the introduction chapter, but the reader may miss the sort of broad institutional analysis that Jacoby provides so well in his book. Of course, Labor in the Age of Finance has only one nation to consider. An international volume complicates this task unless one is happy with the vague generalities of some world systems theories.
A number of the chapters reveal possible deficits in the European social model. The ‘balancing’ of rights under loose European principles has indeterminate results. Possibly more substantive justice will emerge at the national and municipal level, where labour and social movements may have the capacity to innovate, both in policy-making and in the development of alternative cooperative enterprise.
Nowhere in the volume is there a clear acknowledgement of the role of private equity and financialization more broadly in stimulating the growth of the Gig Economy. Private equity focuses substantial energy on start-ups, seeking opportunities to build and quickly sell enterprises with limited interest in sustaining for the long term (Lenhard and Winterberg, 2021).
While it is not primarily an issue of labour law, an important tool for the protection of workers’ rights in gig enterprises is the platform cooperative. Trebor Scholz at the New School is a scholar and advocate in this sphere (Scholz, 2016). Governments can advance platform cooperativism by improving access to capital and prioritizing such enterprises in procurement.
Labor in the Age of Finance and Labour Law and the Gig Economy are essential reading with respect to contemporary labour problems. Each provides a rich account of closely related dimensions of labour’s current plight. Neither provides an adequate roadmap to the reconstruction of labour power in the current environment, but anyone who seeks to do so will need to consider these volumes.