Wednesday, July 15, 2015

Hillary on the Uber Economy

     It was an important speech she gave on Monday.

     Greg Sargent comments:

    So here are some of the questions that were left unanswered. From the speech:

   “You know advances in technology and expanding global trade have created whole new areas of commercial activity and opened new markets for our exports, but too often they’re also polarizing our economy — benefiting high-skilled workers but displacing or downgrading blue collar jobs and other mid-level jobs that used to provide solid incomes for millions of Americans….we do need to set a high bar for trade agreements. We should support them if they create jobs, raise wages, and advance our national security. And we should be prepared to walk away if they don’t.“

    "Where will Clinton come down on the Trans-Pacific Partnership? Today’s rhetoric is consistent with her previous claim that any trade deal must “put us in a position to protect American workers, raise wages and create more good jobs at home.” But this, of course, leaves room for her to decide either that the TPP does that or that it doesn’t, and when we see the specifics of a deal, she’ll have to take a stand. That won’t be easy."

    I have to say Sargent seems very fixated on this one issue-this is far from the first post where he seems so worried that she hasn't give us a comprehensive answer about TPP. He seems to think that it's dirty pool that she needs more time to think the issue through and give us her opinion. It doesn't seem outrageous to me as that's what I'm doing.

   Believe it or not there are bigger more important questions than whether or not she criticizes TPP loudly enough-a lot of progs right now seem to see this as the litmus test which couldn't be more misguided.

  Her speech actually had far greater implications than just getting her opinion on the TPP obsession. If you wonder why I got tired of this obsession it's just that I see it as kind of a gotcha question where if she doesn't oppose TPP loudly enough then it's' 'Aha! Hillary is not a real liberal, just like her husband.'

   That's the subtext of TPP.

    She has talked about getting tough with Wall Street in some important areas and the Hillary bashers will just scoff that it's just politics-after all remember her husband, that's what he would do- but to the contrary her speech seemed to make Wall Street quite nervous.

   With all the complaints that she hasn't given us substance what she did in her speech was open a very substantive debate-I would argue the question of the entire 2016 election-as most liberals and I think most Americans agree that the real problem now is wage stagnation: namely how do liberals respond to the Uber economy.

   This is the question of the election because the conservative argument is that the Uber economy gives workers all these great things-you know 'flexibility'-which can be a euphemism to permanent job insecurity, a la Morgan Warstler and are going to accuse her of wanting to kill the goose that lays the golden eggs-Uber.

   Conservatives right away sounded like Chicken Little after her speech-'Hilary hates Uber! She hates capitalism! Why won't Hillary be like her husband!'

   This National Review article should be read and mastered by her staff as it's symptomatic of the playbook that Jeb will run against her. The article's title sets itself the task of explaining to us why Hillary hates Uber.

   Not to give away the ending but it's because Democrats hate Uber, the hate progress, they are nostalgic for the horse and buggy, because they love statism.

   Lowery works all the angles they will throw at her, starting with the line that 'Grandmothers may know best but Hillary doesn't seem to get Uber.'

   Again, the ageist thing-also sexist as the GOP has run many men going back to Reagan for President at her age and this wasn't an issue.

   There's the attempt to suggest that she's against progress-from NR,who doesn't even allow you to cut and paste from them which is why I can't give you quotes. Here is another NR post that claims that her speech is out of the 1930s. NR surely knows FDR won so why is that a problem.

   Back to CNBC:

  "Some workers are suing start-ups including Uber and Lyft to be classified as employees, not independent contractors."

   "Clinton also vowed to ensure workers are being properly paid and protected. "I'll crack down on bosses that exploit employees by misclassifying them as contractors or even steal their wages," she told the crowd."

    "But others argue the "gig" economy offers workers an incredible amount of flexibility."

   "If the jobs "meet people's needs for flexible employment and provide learning real skills and pay decent wages, then they are certainly a positive for the economy," said Paul Osterman, professor at the MIT Sloan School. If the freelance jobs "result from misclassification to avoid paying benefits or employment taxes, then they are an emerging problem and a source of worsening job quality," Osterman said in an email to CNBC."

   Regarding Uber and companies like it, this is where the rubber meets the road. Noah Smith had a post on Uber asking if the only reason they are profitable is to the extent that Uber can call its drivers contractors rather than workers.

   "But IF the California ruling, and others like it, are what put a stake through Uber's heart, then I think we conclude two things:

     1. Uber wasn't actually that amazing of an idea.

     2. Our labor regulation is too stringent.

    "Why do we conclude #1? Because there are lots of ideas that absorb the cost of labor regulations and manage to keep on turning a profit. Wal-Mart does it. McDonald's does it. If you can't even clear that hurdle, your idea wasn't really creating that much value."

    "Why do we conclude #2? Because Uber is providing lots of people with work. Many people who would not otherwise be driving taxis are now becoming Uber drivers. That they are choosing to do this means that Uber is good for labor markets. In the interests of improving our labor markets, we should reduce regulations that keep people from doing jobs they'd be willing to do, as long as those jobs are safe and meet other minimum standards of quality (such as paying overtime). Assuming that Uber driving is a safe job that meets minimum standards of quality - which I'm willing to assume - we don't want to regulate the job out of existence."

      "I suspect that neither (1) nor (2) is true. I suspect that Uber actually creates more than a tiny sliver of value, with its network effect and its circumvention of the local monopoly of taxicabs. And I also suspect that American labor regulations are not so onerous that they are putting large numbers of people out of a job."

    "Thus, I predict that the California ruling will not kill Uber. Uber may still die of other causes, but I don't think that being forced to call its employees "employees" will do it in."

    All of that makes quite a bit of sense-Noah Smith is a pretty smart guy and I'm going to presume he's right on all counts.

     In that case, the job of Democrats isn't to suppress the Uber economy but simply bring regulations and work and labor standards up to date.

   I'm presuming HIllary and her campaign is familiar with Nick Hanuer-the liberal billionaire-and some of his solutions to do just that.

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