Tech Boosts Corporate Profits. What’s It Doing for Workers?

By  |  January 24, 2020, 9:53 AM  |  Techonomy Exclusive


The promise of new technology is often sold as an upside for everyone: more products, faster service, and a higher standard of living. But while tech has been transformative for consumers, unless you’re a fabulously wealthy heir, you probably still work every day. And for most of us, tech has narrowed our choices at work. In fact, it’s tipping the scales toward corporations and away from working people.

With new technology, corporations easily outsource and subcontract jobs to avoid providing basic protections, benefits, and rights. It contributes to stagnant wages and disappearing jobs. Corporations are using tech in nefarious ways to spy on employees and keep them guessing about their schedule from week-to-week, or day-to-day, making it nearly impossible to plan their lives.

While businesses have been shifting work from employees to subcontractors for decades, tech is turbocharging that process. Subcontractors aren’t considered employees under the National Labor Relations Act, so they don’t have the same protections and benefits as other employees, leaving them vulnerable to abusive and exploitive corporate practices.

Today, you can walk into a hotel, be greeted by a concierge, say hello to the cleaning crew in the hallway, enjoy a meal in the hotel bar and never encounter an actual employee of the hotel, because many are subcontractors, or temps. Technology makes this “workplace fissuring” process easier, as companies can use digital networks to manage constellations of subcontracted workers, even if they don’t work in the same physical location as the company’s management. The ride-hailing services Uber and Lyft are the most widespread example of this practice. Drivers aren’t considered employees of these companies, despite the fact that these people are very clearly working for them. Such practices extend far beyond the so-called “gig economy.”

Many of the industries in which technological change has had the biggest impact on working conditions and job quality are low-wage industries, which disproportionately staff blacks, Latinos and women.

The unfortunate truth is that technology has created information imbalances that reduce worker power. Workplace surveillance technology has evolved so much that managers can electronically monitor workers and track productivity down to the keystroke, putting enormous time pressure on workers and limiting their ability to exercise discretion in the workplace. For example, Amazon delivery drivers—who are contractors—have reported feeling pressured by the company-provided navigation software and delivery routes. The pressure to finish work on time has led to drivers speeding and even urinating in bottles, rather than stopping for restroom breaks. Increasingly, digital platforms are replacing central, physical places of work, through services like Instacart or Handy. Because your coworkers aren’t in the same workplace and organizing on company forums opens them to surveillance, communicating about pay and working conditions is very difficult. Yet, finding common problems is critical for organizing for workplace change.  

Companies are using new technologies to make work and life more difficult for employees. People who are paid low wages—such as  food service employees, retail, domestic and hotel housekeepers—are increasingly managed through software that makes on-demand scheduling easier and more disruptive. Corporations use real-time data to decide when to schedule employees to maximize profits and minimize costs. That then allows the companies to keep people on-call without pay, seamlessly cut back on hours, and reduce hours without notice. The result of this precarious environment is that people often don’t know their schedules and so can’t find additional employment, further reducing their wages and bargaining power. And, when sales are down, the most vulnerable people bear the financial cost.

Women and working people of color bear an outsized share of these developments. Many of the industries in which technological change has had the biggest impact on working conditions and job quality are low-wage industries, which are disproportionately staffed by African Americans, Latinx people, and women. And the flip side makes it a dual barrier: Gaps in digital literacy for low-income women and immigrants makes it more difficult for them to find work online and risks pushing these marginalized people out of the job market altogether.

We can reverse these trends and put power back in the hands of the people whose success is what drives a truly healthy and strong economy. To bring more accountability, antitrust regulation should be updated to reflect the growing power of corporations in the labor market. Regulators should consider the effects of mergers and acquisitions on the labor market, not just the prices paid by consumers.

We can also give more power to working people directly. Policymakers should consider redistributing the gains of tech-driven profits to help finance policies that provide a stronger economic floor for workers, like portable or universal benefits, which would give people alternatives to their current employer and increase their bargaining power. Additionally, reasserting the right to bargain collectively over wages and work conditions would go a long way toward giving people the tools to push back on the encroachments from technology. 

Albert Einstein once noted that it had become “appallingly obvious that our technology has exceeded our humanity,” and his point stands stronger than ever in today’s workplaces. Taking these steps won’t solve every challenge that technology presents, but it would add some humanity back into the workplace.

Joelle Gamble is a principal at Omidyar Network, where she focuses on building the power of working people and shaping a new economic paradigm.

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