Raw Deal | Steven Hill

Summary of: Raw Deal: How the “Uber Economy” and Runaway Capitalism Are Screwing American Workers
By: Steven Hill

Introduction

In Raw Deal, the author, Steven Hill, uncovers the dark side of the sharing economy and its effect on American workers. By discussing the practices of well-known companies like Uber and Airbnb, Hill demonstrates how the sharing economy is not the kinder, gentler capitalism it claims to be. Instead, he illustrates how these companies exploit loopholes in labor regulation, often negatively impacting their workers’ lives. This book summary is your guide to learn how the sharing economy could potentially be screwing American workers, leading to a decrease in job security, and subsequent challenges to the consumer economy.

Peer-to-Peer Economy Critique

The peer-to-peer economy, also known as the sharing economy, is a new business model that is said to offer greater freedom in the marketplace. Supporters hail it as the future of capitalism, but critics raise questions about its impact on society and the economy. One example is Airbnb, which started promoting the idea of homeowners sharing their homes for extra income but eventually became a corporate giant that ignores laws and regulations that protect tenants and communities. The company’s greed has destroyed the original concept of the sharing economy and replaced it with raw capitalism and impersonal transactions.

Uber: The Exploitative Sharing-Economy Giant

Uber, like Airbnb, takes advantage of legal loopholes to make a profit and evade responsibility. By categorizing their drivers as contractors and not employees, they avoid paying social security taxes, licensing fees, and providing security measures. This practice has led to high-profile incidents like sexual assaults by drivers. Uber’s surge-pricing model increases drivers’ wages but leaves low-demand areas with no access to the service. However, instead of blaming the company’s practices, the public often criticizes the drivers. The lack of support from politicians and society leads to weak regulations, resulting in the exploitation of workers and other negative consequences for cities and states.

The Rise of the 1099-Economy

As the job market becomes increasingly reliant on independent contractors, known as the 1099-economy, stable jobs with benefits are disappearing. These contractors are paid hourly and receive no health benefits, retirement plans, or social security, while businesses benefit from outsourcing work to them. Companies have even fired employees to rehire them as contractors with no benefits or reduced wages. This undermines the middle class and is a threat to the economy. Other countries have laws to protect contractors and temp workers, but this is not the case in the United States, where “perma-temps” work for years at the same company without the security or freedom of their coworkers.

The Exploitative Facade of the Sharing Economy

The sharing economy is not as appealing as it seems. The book delves into the precariousness of TaskRabbit as an example and how it exploits people in need. It uncovers the realities behind cheap labor and how it contributes to the “informal economy.” It argues that the sharing economy is a mere façade that often results in untaxed and illegal activities.

The sharing economy has become ubiquitous in our lives, promising quick gains and access to opportunities for those in need. However, the realities of this economy are often disguised by sugarcoated language. For instance, TaskRabbit is a platform that allows people to post a job and give it to the person who makes the cheapest offer. It is sold as a “share-the-crumbs” economy, but it operates on depressed labor conditions that exploit desperate workers.

This auction-based labor market allows a race-to-the-bottom price strategy, which makes it impossible for workers to earn a decent income. They end up being underpaid and undervalued for their work, leading to a lack of economic growth and poverty generation. Even when a decent-paying job comes up, it often is worth much less than advertised when considering the expenses incurred while commuting and searching.

The “informal economy” is the result of this new kind of work, and it is untaxed, uncontrolled, and often illegal. From nannies to black markets, this underground economy is prevalent in many countries, leading to precariousness and exploitation for those involved. It is concerning that in the United States, the value of underground economic activity in 2012 was around 13% of the country’s overall gross domestic product, a number that has doubled since 2009.

In conclusion, the sharing economy is not as appealing and promising as it seems. It is a façade that often results in untaxed, illegal activities. The labor market competition model it fosters makes it impossible for workers to earn a decent income, leading to poverty generation and a lack of economic growth.

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