Global Glance: May 31, 2016

A quick look at intriguing international stories

By John Bostwick, Managing Editor, Radius

Welcome back to Global Glance. This week we look at:

• How the Pew’s digital economy survey shows a divided America
• How Senator Warren’s speech on the gig economy sparked a global debate
• The ongoing labor unrest in France

The Pew’s Digital Economy Survey Shows a Divided America

Earlier this month, the Pew Research Center released the results of a survey on the digital economy, its first such report. 4,787 American adults responded to questions about whether they had ever used 11 shared or on-demand services such as online ticket resellers, home-sharing sites and ride-hailing apps. The great majority of respondents (72 percent) indicated that they had used at least one of these tools. But a more detailed look at the findings reveals (among other things) that our country is divided along socioeconomic lines in this area as in so many others.

A handy Pew summary of the findings indicates that “intensive users are disproportionately likely to be college graduates, to be under the age of 45 and to have relatively high household incomes.” Moreover, “urban residents are seven times as likely as rural residents to have used a ride-hailing app.” The survey found one outlier here, in the area of online clothing rental and the rental of other products. In contrast to the other 10 services, lower-income Americans were found to be more likely than higher-income Americans to use these online rental services. Given that product-rental sites are designed in part to attract customers who don’t have the means to actually purchase products, this finding is arguably consistent with the rest. (It’s also worth noting that online clothing and other product-rental services are not popular, with only 2 percent of respondents indicating that they had used them.)

An article in NBCNews.com addresses the Pew survey’s findings. The article points out that the digital economy exists in part because it provides economic opportunities to those who can’t find traditional jobs or who don’t have the money to start a business. The digital economy, however, “seems to be benefiting mainly those who are well educated and better off. American households earning upwards of $100,000 a year are three times more likely to use an on-demand service than those earning $30,000.”

Interestingly, while the use of shared and on-demand services is widespread in America, the neologisms that put them into context are relatively unknown here. A stunning 73 percent of survey respondents weren’t familiar with the term “sharing economy,” and 89% weren’t familiar with the term “gig economy.” This lack of familiarity with associated terms is a little surprising, especially in light of the fact that 85% of ride-hailing users said they “had heard something” about the regulatory debate over whether drivers should be contractors or employees, with 39% responding that they had “heard a lot about” that debate. I’m not sure what conclusions to draw from those seemingly paradoxical numbers, other than that Americans may be disinclined to deeply investigate the regulatory, economic and general cultural ramifications of the technologies they adopt. (Of course, Global Glancers aren’t that sort.)

Senator Warren Speech on the Gig Economy Sparks Global Debate

Coincidentally, on May 19, the very day the Pew released its survey, Massachusetts Senator Elizabeth Warren delivered a speech on the gig economy to the New America Foundation in Washington. It will come as no surprise that the left-leaning politician calls for new and evolved government regulations to protect workers in the face of ongoing global economic forces. The gig economy, she observes, has contributed to a rising tide of jobs that have “sharply limited protections and benefits” for workers. Gig jobs like driving for Uber are, she notes, similar to 1099 independent contractor jobs, low-wage jobs, just-in-time staffing, part-time jobs and “stripped-down full-time jobs” in that they have helped undermine worker rights established over the last century in the wake of the industrial revolution.

Senator Warren is right to put gig jobs into this historical context and to emphasize the need for updated regulations. The issue of benefits and protections for Uber drivers and other gig workers is frequently lost in discussions about the sharing economy, which often focus on safety issues, how gigging affects established industries, supporting technologies or company valuations. It’s also fair to say that Warren’s message of ensuring protections and benefits for all workers is balanced by the recognition that the sharing economy and allied technological advances have provided many benefits to customers and workers, and given much-needed competition to hidebound industries like taxicabs, which have been, she says, “riddled with monopolies, rents and inefficiencies.”

So far, this post hasn’t had much of a global bent, but the subjects Warren addresses in her speech are relevant in virtually every country in the world. The rise of the so-called global precariat speaks to eroding worker rights everywhere. (The precariat is a class of mostly young workers who get by on disjointed temporary work assignments that offer no benefits, even in places like Europe with traditionally strong worker protections.) And indeed, I was alerted to Warren’s speech not by some lefty American journal, but by the staid, UK-based, international Financial Times, which published an opinion piece last Monday titled “The Gig Economy Needs a New Bargain for Workers.”

The Times piece contends that “the fact that online platforms can attract workers in large numbers despite relatively unappealing conditions is an indictment of the labor market in many of the countries where they operate,” and that “policymakers in many countries would do well to pay heed to” Warren’s agenda for enhanced worker protections.

While the Times editorial was mostly supportive of Warren’s speech, it did generate a response from a labor advocate. The response was published in the paper last Thursday and written by John Evans, General Secretary of the Trade Union Advisory Committee to the OECD. (Evans wrote his response from Paris, further underlining the global nature of the debate sparked by Warren’s speech.) Evans writes that the Times editorial “does not do full justice to the speech,” in part because it negates Warren’s “insistence on the need for collective bargaining for all workers.” He notes that “trade unions in the US and beyond are seeking to ensure that 21st-century technology does not result in 19th-century working conditions for platform workers.”

French Labor Unrest Intensifies

The Trade Union Advisory Committee that John Evans heads is based in Paris, and France now happens to be the global epicenter of labor unrest. Tens of thousands of French workers are striking and otherwise protesting labor reforms proposed by President François Hollande’s government. The International Business Times explains: “The labor standoff is over a reform that aims to boost hiring by making France's 35-hour workweek more flexible. It is reportedly set to make it easier to fire workers and in turn weaken the power of the unions. Some labor groups say the measures will remove the protection guaranteed to workers and mainly benefit big businesses.”

The Wall Street Journal also reported on the story last week, noting that French union workers walked out of the nation’s 19 nuclear power plants and blocked oil refineries and oil and gas import terminals, affecting international markets. Some of the demonstrations have been violent, with injuries to police and activists reported in a Paris union protest that drew, according to the Journal, between 18,000 and 19,000 people last week. The Journal writes of the current situation: “Faced with protests in April, Socialist President François Hollande watered down his plans to shake up the labor code, leaving him now with little room for maneuver without completely dropping the bill.”

For a more comprehensive take on the situation, check out Time’s “France Could Be Immobilized by Massive Protests Over Labor Law Reforms,” also published last week. The article notes that the ongoing standoff between protesters and the government shows no signs of abating, in large part because French workers “have always taken for granted their right to lavish benefits and iron-clad job protection.”

On the other side, President Hollande has vowed not to stand for reelection unless he spurs economic growth and lowers unemployment rates, both of which are unlikely without the implementation of the reforms. Time explains: “Economists largely blame the weak economy on the restrictive labor legislation, including laws obligating companies to pay huge taxes for each employer, and which bind them to their staff, no matter the economic conditions. Under current law, it can take years for a company to fire someone, with special labor courts sometimes awarding settlements of up to hundreds of thousands of euros to one laid-off employee.”

For a take on French employment law and the ongoing protests that may surprise you, read the New York Times opinion piece, “The Miserable French Workplace.” The author, Pamela Druckerman, explains that a French job can be hellish, even one that is virtually guaranteed for life under an agreement known as a “contrat à durée indéterminée,” or CDI.

Druckerman writes that workers under a CDI can feel trapped by circumstances and may be subject to bullying. As an example she notes an illegal French workplace practice known as “le placard,” or the closet, that’s fit for the pen of Jean-Paul Sartre. Basically, since companies can’t fire workers with a CDI, they may try to make their lives so intolerable that they quit. Druckerman quotes a friend who fears he is on the threshold of the closet: “’What happens next is, I’ll lose my team and my staff, and therefore I’ll have nothing to do,’ the man predicted. ‘You still have to come to work every day, but you have no idea why.’”