Silicon Valley has been treating workers ‘miserably’ since the 1970s | Innovation

Don’t blame Uber for the problems of the gig economy — they didn’t start it, economic historian Louis Hyman says.

“Uber is the waste product of the service economy,” Hyman said on the latest episode of Recode Decode. “It relies on a bunch of people who don’t have an alternative.”

Hyman is the author of a new book called “Temp: How American Work, American Business, and the American Dream Became Temporary.” He told Recode’s Kara Swisher and Rani Molla that the number of people who have to rely on temporary, freelance or other “alternative work arrangements” has been growing since the 1970s, when the era of bloated corporations gave way to businesses that optimized for short-term profits and began treating workers as disposable.

“The alternative to driving for Uber is not a good job in a factory with a union wage or working in a stable office job, it’s slinging coffee at a Starbucks where you may or may not get the hours you need,” he said. “That is what people are shoring up. They’re shoring up getting enough hours, trying to make ends meet. Oftentimes, people talk about the gig economy as ‘supplementary income’ … It’s not supplemental if you need it to pay for your kids’ braces, or food, or rent.”

Hyman argued that this phenomenon could be traced back to the legions of undocumented migrant laborers who built early computers, before those manufacturing jobs moved overseas.

“They were born subcontracted in a way that really portends the way that corporations are organized today,” he said. “It was the rehearsal for what was to come.”

You can listen to Recode Decode wherever you get your podcasts, including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts and Overcast.

Below, we’ve shared an edited transcript of Kara and Rani’s conversation with Louis. You can read a full transcript of the interview here.

The history of “temporary work”

Kara Swisher: Louis, welcome to Recode Decode.

Louis Hyman: Thanks for having me here today.

KS: How did you get started on this? Give us a little bit of your background. I think people want to understand how you got to this topic.

Well, my first two books were about equally unhappy topics, the history of personal debt in America. As I was writing those books I noticed that really the story of finance in America is also the story of work. I decided for my next project, I wanted to write about the history of how, not just our finances became insecure but also our work became insecure.

What I wrote about in the book was how there was this creation after World War II of secure work, secure investment, big corporations, stable jobs, and how that all fell apart starting around 1970. To understand not just the fall of that older model of the workplace, but also the rise of what came next — consultants and temp workers and undocumented migrants — and how those were all pretty central to the remaking of capitalism since 1970.

Rani Molla: Do you want to talk a little bit about Silicon Valley’s history of temporary work? Because that didn’t start 10 years ago, either.

Yeah, it’s very important to realize that Uber is the waste product of the service economy.

KS: Oh, I like that, what do you mean by that? Waste, product. Shitty, in other words.

Ehh, I don’t use these kinds of words, but yes.

KS: I just did.

I did too.

KS: You may use them on this program. You may curse at will.

Okay, good. Awful. So the why Uber is the waste product is that it relies on a bunch of people who don’t have an alternative. This is the thing you have to realize, that the alternative between driving for Uber is not a good job in a factory with a union wage or working in a stable office job, it’s slinging coffee at a Starbucks where you may or may not get the hours you need.

That is what people are shoring up. They’re shoring up getting enough hours, trying to make ends meet. Oftentimes, people talk about the gig economy as “supplementary income.” It’s only as supplementary … It’s not like …

KS: Well, the companies talk about it like that. “Freedom, the supplementary income, you can do it on your own time.”

RM: Yeah, “make your own schedule,” yeah.

Yeah. It’s not supplemental if you need it to pay for your kids’ braces, or food, or rent. I think when we talk about the gig economy, it’s very easy to say, “This is awful,” and people point to it. But really, those kinds of awful problems are already present and have been since the 1970s.

The working Americans have faced increasing income volatility, income inequality. This is just reified in the so-called app-based, digital …

KS: The gig economy.

Gig economy, yeah.

How workers became disposable

RM: So, what’s causing the income volatility? What’s causing people to actually take these gig jobs?

One of the things I argue in the book is that there was a wholesale move away from how corporations thought they should be organized, from both business leaders and policymakers and investors, right after the so-called “conglomerate craze” at the end of the 1960s. In the 1960s, corporations were making tons of money, just like now. Corporations were making tons of money and they were buying up lots of other companies.

But because of anti-monopoly laws, they were buying these unrelated companies and then creating more profits. So a small electrician buys his way to being the 25th largest company in America. It turns out, they were all terribly run.

KS: How could you run them?

How could you run them? This engulfs about 95 percent of the Fortune 500. They all fall apart. Then people begin to cast about for alternative models. They blame the corporation, the postwar corporation, the postwar world of work for this. Into that intellectual void come consultants and business gurus who sell a new idea of how to run the corporation — leanly with only limited commitment to their workers and employees.

Et voila, you have the origins of today’s firms. To understand the history of today, it’s not just about technology. The real technology that changes is not the phone, it’s the corporation, how we organize people.

KS: But that’s different in Silicon Valley, though, how they were organizing people. Because this would be teams that grow up for a single purpose, essentially.

So, the history of Silicon Valley is really important. I write a lot about Silicon Valley in this book because Silicon Valley emerges as the leading sector of the economy in the 1970s. By 1980, it’s the most profitable part of the economy.

KS: That’s even before the boom, the really big boom?

It’s before the first Silicon Valley semiconductor and manufacturing boom. It is really, really reliant on a very different kind of manufacturing. Silicon Valley is never unionized the way that Detroit is unionized. Silicon Valley never provides good pay for its frontline manufacturing workers. Silicon Valley, actually, was reliant on hundreds of thousands of undocumented migrants, who are outside of those new laws that emerge in the early ’70s called OSHA. All the environmental standards, all the environmental standards …

KS: This is to create the chips.

… to create the chips. They were born subcontracted in a way that really portends the way that corporations are organized today. It was the rehearsal for what was to come.

The histories of Silicon Valley, as you know, are largely about Steve Jobs, or the Woz, or these other kinds of …

KS: Right, in their garages.

The garage men and their innovations. But they’re reliant on hundreds of thousands of mostly immigrant women. So every time somebody says “robot” in Silicon Valley, they usually mean woman, generally woman of color. In the book, I trace how this idea of automation is used to justify … this idea of progress is used to justify treating people miserably, workers miserably.

RM: Yeah, you make this really interesting point about how people right now perceive of Uber and you compare it to Etsy. They both are similar things, they’re platforms that are selling other people’s work that aren’t necessarily indebted to the people who are working for them. Everyone gets mad at Uber and not so much for Etsy. You said, “The reason for it is because we don’t value women’s labor.”

Absolutely. I think the fundamental question is, who counts? In the postwar period who counted were white men and everybody else didn’t. If you were a woman, if you were a person of color, if you were living here but not an American citizen, your rights didn’t matter as much to the people who wrote the rules and ran the companies.

That’s certainly true today, as well. I think that this is how we get upset about Uber, because men were taxi drivers and women were not taxi drivers. It’s okay for Etsy.

What human jobs can survive?

KS: It inevitably leads the fact that less people are needed. I always say anything that can be digitized will be digitized, and everyone’s like, “oh, that’s interesting.” Like, no, no. Think about that. Like think about it very carefully and walk it out. Not just the fact that we’ll have self-driving cars, but we won’t have mechanics. You won’t need a mechanic, you won’t need an insurance company. You won’t need … The way retail is done. It will not be at malls. What about the mall people?

RM: Podcasters.

KS: No, that’s hard. It’s hard! Rani, I’m in jobs where you … So creativity is the only thing that matters, really.

I mean, I think being curious and being creative, in short being human, is what matters. So things that aren’t human are things that a machine should do. I write in the book that no human should do the work of a machine. And to me, that’s not a bad thing. The optimistic futurist in me loves the fact, loves this, but I think the question is, well, what do we do with people? And we have a system set up, an educational system and economy that has treated people like machines for 100 years. That’s what industrialization is.

KS: Right. And in fact, the original computers were people, were women.

Were women, which is not to be ignored. Right? So this is, you know, why are we surprised when the robots finally come to take our jobs? And you know, it’s a godsend. It could be the end of paperwork, which I think all of us hate.

KS: Or mining.

Or mining or all the other things, but it does mean, what do we do politically and socially to make sure that our societies aren’t ripped asunder between a new kind of digital ruling class? And that’s where the dystopian and utopian visions, and it’s why history is so important. Because when you talk to people in Silicon Valley, as much as I love them, they are people who have largely just read sci-fi novels.

KS: That have no historical underpinnings whatsoever. No humanities, no …

Yeah. And they think of the transition from the agricultural economy to the industrial economy as a smooth line rather than, in 1877, railroad cars with machine guns reconquering parts of Pennsylvania when the workers rose up and destroyed the tracks and overthrew the bosses.

RM: So sometime in the near future, or depending on how long you think it’s going to be, everything’s going to be automated, a lot of us are going to lose our jobs. What are the jobs of the future?

KS: And what aren’t?

Yeah, I think it’s really hard to guess in advance. I mean, I don’t think “podcaster” was a job that you could have predicted 10 years ago, but we do know what those will be. They will be these things that stake out what it is to be human, to be curious and creative and also caring.

So I think that the jobs of the future will be us sort of caring for — liberate us to do the things that humans like to do naturally that we don’t have to be corralled into doing. You know, you have to corral someone into going into a dark mine and getting black lung. You don’t have to corral someone into taking care of their children.

KS: Talk about more of the jobs that are going. What are the areas? Retail?

Yeah.

RM: Which ones are going first?

I think the most important one is retail. Certainly for working people, the people who are already skilled in ways that they can’t access higher-paying jobs, retail. The places where people go as entry-level positions. Retail’s gone. Anything that can be done three times, has to be done three times in a row, will be automated.

RM: Right.

And I think part of this acceleration I wrote about in the book is this idea of digital migrants. So sometime in the next few years, we will see robots that are tele-operated by somebody else, and I think people aren’t as attentive to this as they need to be. The intersection of machine learning, virtual reality and robotics. I’ve already seen robots that you can …

RM: Can you explain that a little bit?

Yeah, unpack it a little. It’s a little … It’s really interesting to me. I went to a lab a couple of years ago at Berkeley, and you could put on virtual goggles. Like we all now have these — well, I guess six people have the Oculus Rift or whatever. And you can run a robot body through that. And people there were very excited about this towel-folding robot that could see a towel and fold it. And I sat there for an hour waiting for this towel to be folded and it never could. I hate folding so I was super excited to see this. And I put the goggles on and I could fold the towel almost instantaneously, even though I’ve never …

RM: So using the robot, you could fold the towel.

I could reach the robot’s arms and fold the towel. And I realized when I did this it was like, oh wow, I could do this anywhere. And so I can easily imagine the next couple years, some entrepreneur offering very cheap house-space robots the same way that Tesla used its own drivers to train its Autopilot, to use just hundreds of thousands of people around the world through some kind of online labor program in putting on virtual reality goggles somewhere in Bangladesh or Mexico. And then operating these robots.

And then because of machine learning, the robots would learn how to do all kinds of manual tasks. So all that physical labor that we now think can’t be put oversees, all those migrants that people …

RM: So even the digital migrants would lose their jobs.

So even though the physical migrants would lose their jobs, but then the digital migrants would then be replacing themselves.

Universal Basic Income

KS: So talk about UBI, I’ve had a lot of UBI. This is Universal Basic Income. How do we pay for this?

Yes, so the Universal Basic Income is very exciting to people who think that automation is going to get rid of all humans. All current human work.

KS: No, there’s some interesting views, Chris Hughes is interesting. I just did … Annie Lowrey wrote a book about it. It’s a big … Sam Altman is all over the place with it.

Yeah, there’s a lot … and whether or not there’s a space for people going forward. I think people will always be valuable. We’re so versatile. We’re creative in a way that machines are not.

There’s tricks to UBI, right? And there’s different ways of doing it. You can either have a tax and redistribute, you can have something where everyone … The model I favor hearkens back to the early 19th-century model, the corporation, where you couldn’t have a corporate charter unless it fulfilled a social good.

And right now, as people often say, we have socialized risk and privatized profit. I think that people should get a cut of that profit. So every time you issue a stock, some public holding company gets a share of that stock and we all get a cut of that, rather than a direct payment. Because I think it’s important to not feel like we’re just giving money away to people. I think that purpose and autonomy matter a lot to people.

And I do worry what happens if we just start giving people money out. You see the kind of hopelessness that comes with that kind of direct payments. Whereas if we had a sense of shared ownership it would tap into older American values.

RM: You had a different term for Universal Basic Income or a different idea, you called it something like an “investment.”

Yeah, I think it’s an investment in each other. I think that’s a better way to think about it instead of as Universal Basic Income. I think it should be, because you go talk about “Ready Player One,” again, the sci-fi vision where people are living in The Stacks, stacked houses, and it’s all very bleak. Well, I don’t want to live in that world. And the danger of automation is not just losing your job but losing purpose.

So figuring out how we can liberate people from tedium and drudgery, which of course is what most people have at their job every day, still. But figuring out how to enable them, not everybody will be able to be a research scientist, right? Full stop. That’s just not how humans work.

KS: Well, you’re removing tedium and drudgery but your not replacing it with anything else. So tedium and drudgery is better than nothing.

Tedium and drudgery is better than starving, but it’s not better than taking care of elders or children or making art.