[Plura-list] Worker misclassification is a competition issue

Cory Doctorow doctorow at craphound.com
Fri Feb 2 14:47:38 EST 2024

Read today's issue online at: https://pluralistic.net/2024/02/02/upward-redistribution/

Today's links

* Worker misclassification is a competition issue: Corrupt employers created a market for lemons.

* Hey look at this: Delights to delectate.

* This day in history: 2004, 2009, 2014, 2019, 2023

* Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading


🏊🏽 Worker misclassification is a competition issue

The brains behind Trump's stolen Supreme Court have detailed plans: they didn't just scheme to pack the court with judges who weren't qualified for - or entitled to - a SCOTUS life-tenure, they also set up a series of cases for that radical court to hear.

Obviously, *Dobbs* was the big one, but it's only part of a whole procession of trumped-up cases designed to give the court a chance to overturn decades of settled law and create zones of impunity for America's oligarchs and the monopolies that provide them with wealth and power.

One of these cases is *Jarkesy*, a case designed to allow SCOTUS to euthanize every agency in the US government, stripping them of their powers to fight corporate crime:


The argument goes, "Congress had the power to spell out every possible problem an agency might deal with and to create a list of everything they were allowed to do about these problems. If they didn't, then the agency isn't allowed to act."

This is an Objectively Very Stupid argument, and it takes a heroic act of motivated reasoning to buy it. The whole *point* of expert agencies is that they're *experts* and that they might discover new problems in American life, and come up with productive ways of fixing them. If the only way for an agency to address a problem is to wait for Congress to notice it and pass a law about it, then we don't even need agencies - Congress can just be the regulator, as well as the lawmaker.

If there was any doubt that Congress created the agencies as flexible and adaptive hedges against new threats and problems, then the legislative history of the FTC Act should dispel it.

Congress created the FTC through the FTCA because the courts kept misinterpreting its existing antitrust laws, like the Sherman Act. Companies would engage in the most obvious acts of naked, catastrophic fuckery, and judges would say, "Welp, because Congress didn't *specifically* ban this conduct, I guess it's OK."

So Congress created the FTC with an Act that included a broad authority to investigate and punish "unfair methods of competition." They didn't spell these out - instead, they explicitly said (in Section 5) that it was the FTC's job to determine whether something was unfair, and to act on it:


The job of the FTC is to investigate unfair conduct *before* it becomes such a problem that Congress takes action, and to head that conduct off so that it never rises to the level of needing Congressional intervention.

Now, it's true that since the Reagan years, the FTC has grown progressively less interested in using this power, but that's broadly true of *all* of America's corporate watchdogs. But as the public all over the world has grown ever more furious about corporate abuses and oligarchic wealth, governments everywhere have rediscovered their role as a public protector.

In America, the Biden administration altered the course of history with the appointment of new enforcers in the key anti-monopoly agencies: the FTC and the DOJ's antitrust division. But more importantly, the Biden admin created a detailed, technical plan to use *every* agency's powers to fight monopoly, in a "whole of government" approach:


Now, this can give rise to seeming redundancies. Take labor issues. The NLRB is a (potentially) powerful regulator that had been in a coma for decades, but has awoken and taken up labor rights with a fervor and cunning that is a delight to behold:


At the same time, the FTC has *also* taken up labor rights, using its *much* broader powers to do things like ban noncompetes nationwide, unshackling workers from bosses who claim the right to veto who else they can work for:


But the NLRB doesn't make the FTC redundant, or vice-versa. The NLRB role is principally reactive, punishing wrongdoing after it occurs. But the FTC has the power to intervene in *incipient* harms, labor abuses that have not yet risen to the level of NLRB enforcement or new acts of Congress.

This case is made *beautifully* in Alvaro Bedoya's speech "'Overawed': Worker Misclassification as a Potential Unfair Method of Competition," delivered to the Law Leaders Global Summit in Miami today:


Bedoya describes why the FTC has turned its attention to the problem of "worker misclassification," in which employees are falsely claimed to be contractors, and thus deprived of the rights that workers are entitled to. Worker misclassification is *rampant*, and it transfers *billions* from workers to employers every year. As Bedoya says, 10-30% of employers engage in worker misclassification, allowing them to dodge payment for overtime, Social Security, workers' comp, unemployment insurance, healthcare, retirement and even a minimum wage. Each misclassified worker is between $6k-18k poorer thanks to this scam - a typical misclassified worker sees a *one third* decline in their earning power. And, of course, each misclassified worker's boss is $6k-$18k *richer* because of this scam.

It's not just wages, it's workplace safety. One of the most dangerous jobs in the country is construction worker, and worker misclassification is rampant in the sector. That means that construction workers are three times more likely than other workers to lack health insurance.

What's more, misclassified workers can't form unions, because their bosses' fiction treats them as independent contractors, not employees, which means that misclassified construction workers can join trade unions and *demand* health-care, *or* safer workplaces.

Contrast this with, say, cops, who have powerful "unions" that afford them gold-plated health care and lavish compensation, even for imaginary ailments like "contact overdoses" from touching fentanyl - a medical impossibility that still entitles our nation's armed bureaucrats to handsome public compensation:


Cops have far safer jobs than construction workers, but cops don't get misclassified, so they are able to collect benefits that no other worker - public or private - can hope for.

Not every employer *wants* to cheat and maim their employees, of course. In Bedoya's speech, he references Sandie Domando, an executive VP at a construction company in Palm Beach Gardens. Domando's company keeps its employees on its books, giving them health-care and other benefits. But when she starting bidding against rival firms for jobs funded by the covid stimulus, she couldn't compete - two thirds of those jobs went to other firms that were able to put in cheaper bids. Those bids were cheaper because they were defrauding their workers by misclassifying them. Thus, publicly funded projects were overwhelmingly handed over to fraudulent companies. Fraud becomes a fitness-factor for winning jobs. It's a market for lemons - among employers.

Employee misclassification is a pure transfer from workers to bosses. Bedoya recounts the story of Samuel Talavera, Jr, a short-haul trucker who worked for decades in the Port of Los Angeles. For decades, his job paid well: enough to support his family and even take his kids to Disneyland now and again.

But in 2010, his employer reclassified him as a contractor. They ordered him to buy a new truck - which they financed on a lease-purchase basis - and put him to work for 16 hours stretches in shifts lasting as much as 20 hours per day. Talavera couldn't pick his own hours or pick his routes, but he was still treated as an independent contractor for payroll and labor protection purposes.

This lead to an terrible decline in Talavera's working conditions. He gave up going home between shifts, sleeping in his cab instead. His pay dropped through the floor, thanks to junk-fees that relied on the fiction that he was a contractor. For example, his boss started to charge him rent on the space his truck took up while he was standing by for a job at the port. Other truckers at the port saw paycheck deductions for the toilet-paper in the bathrooms!

Talavera's take-home pay dropped so low that he was bringing home a weekly wage of $112 or $33 (one week, his pay amounted to $0.67). His wife had to work three jobs, and they still had to declare bankruptcy to avoid losing their home. When Talavera's truck needed repairs he couldn't afford, his boss fired him and took back the truck, and Talavera was out the $78,000 he'd paid into it on the lease-purchase plan.

This story - and the many, many others like it from the Port of LA - paint a clear picture of the transfer of wealth from workers to their bosses that comes with worker misclassification. The work that Talavera did in the Port of LA didn't get less valuable when he was misclassified - but the share of that value that Talavera received dropped to as little as $0.67/week.

Worker misclassification is rampant across many sectors, but its handmaiden is *technology*. The fiction of independence is much easier to maintain when the fine-grained employer-employee control is mediated by an app (think of Uber):


That's why those scare-stories that AI trucks were going to make truckers obsolete and create an employment crisis were such toxic nonsense. Not only are we unlikely to see self-driving trucks, but *the same investors* that back AI technology are making *bank* on companies that practice worker misclassification through the "it's not a crime if we do it with an app" gambit:


By focusing our attention on a *hypothetical* employment crisis that will supposedly be caused by future AI developments, tech investors can distract us from the *real* employment crisis that's created by app-enabled worker misclassification, which is also the source of much of the capital they're plowing into AI.

That's why the FTC's work on misclassification is so urgent. Misclassification is a scam that hurts workers and creates oligarchic power - and it's also a mass-extinction event for *good* companies that don't cheat their workers, because those honest companies can't compete.

Worker misclassification is having a long-overdue and much needed moment. The revolutionary overthrow of the rotten old leadership at the Teamsters was caused, in part, by a radical wing that promised to focus the Teamsters' firepower on fighting worker misclassification:


This has become a focus of labor organizers all around the world, as worker misclassification-via-smartphone has infected labor markets everywhere:


Bedoya's speech is a *banger*, and it reminds us that labor rights and anti-monopoly have always been part of the same project: to rein in corporate power and protect workers from the insatiable greed of the capital class:



🏊🏽 Hey look at this

* Moral Bankruptcy https://prospect.org/justice/2024-01-31-moral-bankruptcy/

* Rebecca Solnit: How to Comment on Social Media https://lithub.com/rebecca-solnit-how-to-comment-on-social-media/

* KOSA isn’t designed to help kids https://www.zephoria.org/thoughts/archives/2024/01/31/kosa-isnt-designed-to-help-kids.html


🏊🏽 This day in history

#20yrsago Tablature for Super Mario Brothers https://artport.whitney.org/gatepages/artists/galloway/

#20yrsago Unix as she is spoke https://web.archive.org/web/20040215071845/http://www.eeng.brad.ac.uk/help/.faq/.unix/.pronun.html

#15yrsago Comprehensive excoriation of ebook stupidity https://arstechnica.com/information-technology/2009/02/the-once-and-future-e-book/

#15yrsago Disneyland Paris’s smoking area/stroller rental https://www.flickr.com/photos/doctorow/3246021936/

#15yrsago UK to introduce “photograph a cop, 10 years in jail” law https://web.archive.org/web/20090204092654/http://www.bjp-online.com/public/showPage.html?page=836675

#15yrsago Does the Medieval Warm Period mean that climate change isn’t real, dangerous and caused by humans? (No) https://web.archive.org/web/20090306110647/http://www.ncdc.noaa.gov/paleo/globalwarming/medieval.html

#10yrsago Namibia’s vintage guru on fashion, thrifting, and Namibian style https://www.messynessychic.com/2014/01/31/interview-with-the-vintage-fashion-guru-of-namibia/

#10yrsago Australian government to dump 3,000,000 cubic meters of dredged sea-bottom on the Great Barrier Reef https://web.archive.org/web/20140201153321/http://news.discovery.com/earth/oceans/australia-oks-dumping-dredge-spoil-in-barrier-reef-140131.htm

#10yrsago What it’s like to come home to America if your name is “Ahmed” https://www.huffpost.com/entry/why-i-hate-coming-home-to_b_4676404

#10yrsago Writer Naomi Novik explains copyright to Congress https://web.archive.org/web/20140201155647/https://judiciary.house.gov/_cache/files/858bc6ea-8a0d-4ab0-9f6e-1fb8413be179/012814-testimony---novik.pdf

#10yrsago Marx’s prescient predictions for the 21st century https://www.rollingstone.com/music/music-news/marx-was-right-five-surprising-ways-karl-marx-predicted-2014-237285/

#10yrsago UK Parliament considers allowing secret courts to issue orders to seize reporters’ notebooks https://www.theguardian.com/media/2014/jan/31/secret-hearings-police-journalists-deregulation-bill

#10yrsago Massive collection of Soviet wartime posters https://windowsonwar.nottingham.ac.uk

#10yrsago Toronto Mayor Rob Ford ticketed, allegedly for public intoxication, in Vancouver https://globalnews.ca/news/1122528/breaking-rob-ford-reportedly-ticketed-in-vancouver-for-jaywalking/

#10yrsago Neil Gaiman reads “Green Eggs and Ham” https://www.youtube.com/watch?v=TKh_WOfxkA4

#5yrsago After #MeToo, whole industries have been blacklisted by insurers for sexual harassment liability coverage https://theintercept.com/2019/02/02/workplace-harassment-insurance-metoo/

#5yrsago Women weren’t excluded from early science fiction: they were erased https://www.wired.com/2019/02/geeks-guide-history-women-sci-fi/

#5yrsago Delayed, not saved: Foxconn’s Wisconsin “factory” announcement is a bid to help Trump save face https://www.cbsnews.com/news/foxconn-says-it-will-build-wisconsin-factory-after-all-citing-conversation-with-trump/

#5yrsago The plane(t) has been hijacked by billionaires, and we’re all passengers https://www.businessinsider.com/anand-giridharadas-billionaires-inequality-interview-2019-1

#5yrsago No Deal Brexit will lead to “putrefying stockpiles of rubbish” and “slurry” https://www.theguardian.com/politics/2019/feb/01/revealed-plan-to-deal-with-putrefying-stockpiles-of-rubbish-after-no-deal-brexit

#1yrago Netflix wants to chop down your family tree https://pluralistic.net/2023/02/02/nonbinary-families/#red-envelopes


🏊🏽 Colophon

Today's top sources:

Currently writing:

* A Little Brother short story about DIY insulin PLANNING

* Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. FORTHCOMING TOR BOOKS JAN 2025

* The Bezzle, a Martin Hench noir thriller novel about the prison-tech industry. FORTHCOMING TOR BOOKS FEB 2024

* Vigilant, Little Brother short story about remote invigilation. FORTHCOMING ON TOR.COM

* Spill, a Little Brother short story about pipeline protests. FORTHCOMING ON TOR.COM

Latest podcast: What kind of bubble is AI? https://craphound.com/news/2024/01/21/what-kind-of-bubble-is-ai/

Upcoming appearances:

* The Bezzle at Weller Book Works (Salt Lake City), Feb 21

* The Bezzle at Third Place Books (Seattle), Feb 26

* Tuscon Festival of Books, Mar 9/10

* Media Ecology Association keynote, Jun 6-9 (Amherst, NY)

Recent appearances:

* Enshittification: The Rise and Fall of Big Tech (Crash Course Economics)

* Generation of Lost Causes with Vass Bednar (Toronto Public Library)

* Low-Key Clippy (This Week In Tech)

Latest books:

* "The Lost Cause:" a solarpunk novel of hope in the climate emergency, Tor Books (US), Head of Zeus (UK), November 2023 (http://lost-cause.org). Signed, personalized copies at Dark Delicacies (https://www.darkdel.com/store/p3007/Pre-Order_Signed_Copies%3A_The_Lost_Cause_HB.html#/)

* "The Internet Con": A nonfiction book about interoperability and Big Tech (Verso) September 2023 (http://seizethemeansofcomputation.org). Signed copies at Book Soup (https://www.booksoup.com/book/9781804291245).

* "Red Team Blues": "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books http://redteamblues.com. Signed copies at Dark Delicacies (US): and Forbidden Planet (UK): https://forbiddenplanet.com/385004-red-team-blues-signed-edition-hardcover/.

* "Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com

* "Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The *Washington Post* called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html

* "How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59?sk=f6cd10e54e20a07d4c6d0f3ac011af6b) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)

* "Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html

* "Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p2682/Corey_Doctorow%3A_Poesy_the_Monster_Slayer_HB.html#/.

Upcoming books:

* The Bezzle: a sequel to "Red Team Blues," about prison-tech and other grifts, Tor Books, February 2024

* Picks and Shovels: a sequel to "Red Team Blues," about the heroic era of the PC, Tor Books, February 2025

* Unauthorized Bread: a graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, 2025

This work - excluding any serialized fiction - is licensed under a Creative Commons Attribution 4.0 license. That means you can use it any way you like, including commercially, provided that you attribute it to me, Cory Doctorow, and include a link to pluralistic.net.


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"*When life gives you SARS, you make sarsaparilla*" -Joey "Accordion Guy" DeVilla
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