Sunday, June 28, 2015

George Mason professor tries to tell us that the Uber is good for workers

If there’s a false argument to be made in support of corporate interests, Professor Tyler Cowen of George Mason University is sure to make it. Cowen specializes in spinning dispassionate sounding short articles that sell economic nonsense in the better mainstream media, such as The New York Times, Wall Street Journal and Foreign Affairs. 

A year ago, Professor Cowen was embarrassing himself with a series of articles that purported to disprove the findings of Thomas Piketty in his Capital in the 21st Century. Cowen’s argument tended to follow the pattern of staring at the trees so you won’t see the forest, which in this case means believing that the fact that individual families gain and lose wealth through generations proves that over time more wealth does not tend to accumulate into fewer hands. By focusing on the trees—individual wealthy people, Cowen ignores the forest—the class of the wealthy—who have accumulated more and more of the wealth of the world and the United States over the past 35 years.

Cowen now uses the same trick of ignoring the group to perform another feat of corporate justification in a New York Times article titled “In an Uber World, Fortune Favorsthe Freelancer.” Cowen asserts that some workers—those who hustle, i.e., “are willing and able to turn their spare time to productive uses,”—will do very well in the freelance economy created by sharing services such as Uber and Airbnb.  

The good professor creates hypothetical situations to assert that workers who are more educated will be more likely to take advantage of the opportunities to freelance as a driver, dog-watcher, private tutor or whatever, and therefore make a lot of money. He never proves this point, but he does make a clear implication that some individuals will thrive in the sharing economy.  

Of course, Cowen never defines what thriving means—will these successful freelancers make $150,000 a year, or will they just do a little better than average for the driving, delivery, baby-sitting and other semi-skilled, low-wage labor that constitutes a large part of the sharing economy. Surely Cowen isn’t talking about freelance attorneys or accountants, who tend to make less than their peers with real jobs. 

The hidden premise behind Cowen’s argument—one that right-wing economists and social thinkers never tire of making—is that those who thrive will deserve to do so, while those who don’t will deserve their fate.  This argument is an important foundation stone of our free market system, because it justifies the obscene wealth that a few possess—they earned it and they deserve it, just as much as that young go-getter who is delivering your package to the airport for $5.00 an hour. 

Now maybe some of the trees in the forest of the shared economy will grow to the clouds, but what about the rest of the forest, which in this case comprises most people trying to scrape a living together on freelance and part-time jobs.  Cowen neglects to tell us what’s going to happen to the group of workers who don’t thrive in an entrepreneurial environment. They will make less money and will always be in competition with fellow workers for every little job.  Their work world, always brutal, becomes more so in an apps-driven world. 

That the Times accepted Cowen’s article should disappoint anyone who believes in high journalistic standards. In making his case, Cowen cites two studies, one sponsored by Uber and partially written by an Uber executive and the other paid for by Airbnb. When I was a journalist, we tried not to depend on research paid by parties who had a vested interest in the research results. For a scholar to accept such non peer reviewed research is surprising, unless Cowen is feeding at the same corporate trough as those who took Uber and Airbnb’s money. For the New York Times not to ask Cowen to remove the research from his article is equally as disconcerting. Don’t the editors remember all the bogus research that the tobacco industry generated for decades?  

As with all labor and wage challenges, Cowen finds the answer to the dilemma of some workers not thriving is to give them greater education and training.  He avers that the educated shared economy worker will provide better service and get higher ratings, and thereby get more jobs and make more money. As usual, Cowen never considers the conundrum of what happens when every worker is better educated. Interestingly enough, Cowen manages to get a tiny plug into the article for for-profit education when he proposes that in the future going through an Uber training program might serve as a legitimate educational credential on par with “those of some lower-tier colleges and universities.” 

Cowen hides the brutal fact that the sharing economy hurts workers in several ways. It either replaces the stable income and benefits of full-time work with a precarious freelance existence or it floods labor markets with people who may or may not be qualified, thus driving down rates. It creates dangerous situations, such as the apartment that’s really a sub-standard hotel or the unsafe driver. It takes profit out of the hands of those who do the actual work. It makes it much harder for workers to organize into unions. 

But none of that matters to Cowen, who prefers to force a smile and focus on those who will succeed in the sharing economy. If he looked at the whole forest, he would see that the wage-suppressing nature of the sharing economy creates a major economic challenge for the country, as more and more workers fall into permanent economic insecurity.


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