The Uberization of the economy

The tidal wave sweeping through the American economy has already reshaped the political landscape — from the rise of an anti-Wall Street movement on the left to the Tea Party on the right — and is sowing frustration among a large mass of voters.

“Whether America will be America or not hinges on whether we have a downward spiral around wages,” said Neera Tanden, president of the Center for American Progress, a think tank closely aligned with Mrs. Clinton. “People know things are changing. They don’t feel like anyone has a handle on it. There’s a yearning for a political vision that addresses that.”

In retrospect, the Uberization of the economy began innocently enough back in the late 1970s.

David Weil, who runs the Wage and Hour Division of the United States Labor Department, describes in his recent book, “The Fissured Workplace,” how investors and management gurus began insisting that companies pare down and focus on what came to be known as their “core competencies,” like developing new goods and services and marketing them.

Far-flung business units were sold off. Many other activities — beginning with human resources and then spreading to customer service and information technology — could be outsourced. The corporate headquarters would coordinate among the outsourced workers and monitor their performance.

Cost was unquestionably an advantage of the new approach: Workers were typically cheaper when off the corporate payroll than on it, and the arrangement allowed a company to staff up as needed rather than employ a full complement of workers at all times.

But simply cutting costs wasn’t the primary motivation. The real advantage was to enable the organization to focus on what it did best rather than distract itself with tasks for which it had little expertise and which were not especially profitable.

Since the early 1990s, as technology has made it far easier for companies to outsource work, that trend has evolved beyond what anyone imagined: Companies began to see themselves as thin, Uber-like slivers standing between customers on one side and their work forces on the other.

Chosen excerpts by Job Market Monitor. Read the whole story at Growth in the ‘Gig Economy’ Fuels Work Force Anxieties – The New York Times.