How the Uberization of work is rooted in the cult of 'shareholder value'
APphoto_Philadelphia Uber Protest

It's getting easier to tote up the damage from the Uberization of the U.S. economy -- especially by Uber itself. The victims include taxi drivers and owners, whose business is being cannibalized, and Uber drivers themselves, who struggle against competition from other Uber drivers, the cost of their own gas and maintenance, and rate-cutting by Uber.

The biggest casualty may be the cherished notion of the big corporation and the valiant entrepreneur as "job creators." As Jerry Davis, a professor of management and sociology at the University of Michigan, observes in a wide-ranging piece published just before New Year's by the Brookings Institution, they're not. And economic policy will be much better off if we stop thinking they are. 

Creating shareholder value and creating good jobs are largely incompatible. Corporations are 'job creators' only as a last resort. - Jerry Davis, University of Michigan

The corporate trend has been to shift employment "from the career, to the job, to the task," Davis writes -- from long-term corporate employment, to outsourcing of certain functions, to the labor-on-demand paradigm of Uber. "Creating shareholder value and creating good jobs are largely incompatible," he writes. "Corporations are 'job creators' only as a last resort."

The same goes for entrepreneurial start-ups: The idea that these are engines of job creation is based on the record of Amazon and Google, but they're atypical. In Davis' database of IPOs since 2001, the firm with the biggest growth in employment after its initial public offering was Brookdale Senior Living , which expanded to 82,000 workers from 16,000 in the nine years after its 2005 IPO. But almost all that growth came from its acquisition of senior care homes in the process of consolidating a fragmented industry.

Davis traces the birth of Uberization to the cult of "shareholder value," which is far less traditional than its proponents choose to imagine. From the 1930s through World War II and into the postwar period, he observes, "American corporations became model long-term employers." The corporate sector "served a critical function in providing pathways to economic security and mobility.... A corporate job was a good job, with a chance to move up in the world."

In 1949, management guru Peter Drucker declared that the corporation's responsibility was to serve employees, customers and only then stockholders, who were entitled only to "a maximum return equivalent to a risk premium. The remaining profit stays in the enterprise, is paid out in higher wages, or is passed on to the consumer in the form of lower prices."



Molly say:
So keep fightin' for freedom and justice, beloveds, but don't you forget to have fun doin' it. Lord, let your laughter ring forth. Be outrageous, ridicule the fraidy-cats, rejoice in all the oddities that freedom can produce. And when you get through kickin' ass and celebratin' the sheer joy of a good fight, be sure to tell those who come after how much fun it was.

       

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