I’m midway through investigative journalist Eyal Press’s excellent book Dirty Work, which examines the often appalling conditions faced by people doing society’s toughest, most thankless tasks, such as slaughterhouse workers.
“How we think about this work,” Press writes, “reveals something fundamental about our society — our values, the social order we unconsciously mandate, and what we are willing to have done in our name.”
This warning was on my mind as I reported the story below. Delivering meals for DoorDash might sound a lot less brutal than slaughtering cattle. And the rise of the “gig economy” has brought unprecedented levels of convenience for better-off consumers. But it is reshaping the labour market in ways that create a precarious existence for large numbers of low-paid workers. Labour law needs to evolve in response.
Our next Moral Money Forum deep-dive report will explore how business and finance are approaching biodiversity risk. We want to hear from our readers. Please share your thoughts through this brief survey.
The ‘working poor’ employed by big US companies
During my recent trip to New York, I had lunch with Olivier de Schutter, the Belgian legal scholar serving as the UN special rapporteur on extreme poverty and human rights.
De Schutter had just delivered a speech at the UN headquarters in which he warned of the dire situation facing the world’s “working poor”, who are below the poverty line despite being employed.
Their ranks include millions of struggling workers in developing nations, he noted — but also people working for some of the biggest and most profitable companies in the US.
In letters made public this week, de Schutter wrote to ecommerce giant Amazon, retailer Walmart and food delivery service DoorDash, highlighting allegations about inadequate treatment of workers, especially those without permanent contracts, including “gig workers”. He also wrote to the US government to highlight the allegations, as well as wider concerns about the situation of low-paid workers in the country.
By the time de Schutter made the letters public on Monday, having given the recipients two months to reply, only Amazon had responded. Its reply — and the silence from Walmart and DoorDash — underscore the problems with relying on voluntary action by companies, rather than reformed law, to safeguard workers’ rights in the growing gig economy.
In his letter to Amazon, de Schutter raised concern that its minimum wage of $15 per hour was below reasonable estimates of the “living wage” in some parts of the country, and that it was avoiding obligations to workers by treating many of them as “independent contractors”. He highlighted reports that some employees were unable to afford proper accommodation, or were on such low incomes that they relied on government food stamps to support themselves.
Amazon replied that its average hourly pay “for regular front-line employees” was now above $20.50. It didn’t provide a corresponding figure for the “independent” workers highlighted by de Schutter, but contended that it “offers a multitude of jobs and shifts, giving employees the ability to pick the opportunity that’s best for them”.
At least Amazon replied — unlike Walmart and DoorDash (and the US government). The silence from the latter parties may be another sign of what looks to many like the waning clout of the UN. It also highlights an uncomfortable question for supporters of the environmental, social and governance agenda: how much does a reputation for responsible business really matter to a company’s bottom line?
A good deal, according to upbeat reports such as this study from McKinsey, which found that companies that talk a good game on ESG seem to enjoy higher sales. Yet US consumers’ relentless appetite for shopping on Amazon, despite extensive media coverage of complaints by its workers, suggests otherwise. So does the decision by Walmart and DoorDash not to bother replying to the UN’s request for information around their workers’ human rights.
DoorDash did respond to my request for comment (Amazon referred me to its reply to the UN; Walmart did not respond to my email). The company told me that its “dashers” in the US earned “over $25 per hour on delivery”, and mostly relied on DoorDash for only a portion of their income. “We will be engaging with the special rapporteur in the coming weeks to correct these blatant misconceptions about dashing,” it concluded.
De Schutter’s letter to DoorDash had cited allegations that its delivery people were not guaranteed a basic level of pay and could even receive less than the federal minimum wage of $7.25 an hour, since workers are paid only for “active time” spent on a delivery, which doesn’t include time waiting for orders. DoorDash also had to pay $2.5mn, he noted, to settle a 2019 lawsuit that accused it of taking workers’ tips.
What can we learn from this episode? Clearly, appeals from the UN won’t be enough to change big companies’ approach to their workers, especially the precarious “gig workers” on whom they — and the wider economy — increasingly depend. Serious movement on that front will happen not through voluntary corporate action, but through change to the law. As de Schutter told me, “for the most part, it’s true, they don’t act in violation of the legislation. But that’s because the legislation is far from being perfect.”
One obvious move would be a big increase in the federal minimum wage, which has been stuck at $7.25 per hour since 2009 (it should be tripled, says de Schutter). It’s also long past time to kill the separate minimum wage for “tipped workers”, which is as low as $2.13 per hour in several states. This is a uniquely regressive system, which originated with businesses’ refusal to pay proper wages to African-American workers after the abolition of slavery.
Yet minimum wage rises would only begin to address the problems highlighted in de Schutter’s letters, which point to a larger task facing leaders in the US and beyond. The rise of the gig economy has been a boon for corporate profits and consumer convenience — and companies such as DoorDash are right to say that some gig workers benefit from the opportunity to work more flexibly.
But there is a clear need to update labour law to give proper protection for the millions of people working in the gig economy without the security or benefits of permanent employment. Relying on companies’ concern for their ESG credentials won’t cut it.
Efforts to introduce such reforms have run into fierce corporate opposition — witness, for example, the furious lobbying in California by ride-hailing companies Uber and Lyft to avoid taking more responsibility for their drivers. Advocates of reform will need to find ways to persuade voters of the need for change — even if it hits middle-class consumers with higher costs for online deliveries and Uber rides. “The key issue here,” de Schutter said, “is how much inequality do we feel we can tolerate?”
Smart read
Supply chain inflation and rising interest rates have created a crunch moment for the offshore wind sector.
Read the full article here