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Robert Reich: How the New Flexible Economy is Making Workers’ Lives Hell

The just-in-time scheduling used by big retailers keeps Wall Street happy, and their employees on the brink of starvation.

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Image from Flickr user Tom Blackwell.

By Robert Reich
By arrangement with Robert Reich

These days it’s not unusual for someone on the way to work to receive a text message from her employer saying she’s not needed right then.

Although she’s already found someone to pick up her kid from school and arranged for childcare, the work is no longer available and she won’t be paid for it.

Just-in-time scheduling like this is the latest new thing, designed to make retail outlets, restaurants, hotels, and other customer-driven businesses more nimble and keep costs to a minimum.

Employers assign workers tentative shifts, and then notify them a half-hour or ten minutes before the shift is scheduled to begin whether they’re actually needed.

Software can now predict up-to-the-minute staffing needs on the basis of information such as traffic patterns, weather, and sales merely hours or possibly minutes before.

This way, employers don’t need to pay anyone to be at work unless they’re really needed. Companies can avoid paying wages to workers who’d otherwise just sit around.

Employers assign workers tentative shifts, and then notify them a half-hour or ten minutes before the shift is scheduled to begin whether they’re actually needed. Some even require workers to check in by phone, email, or text shortly before the shift starts.

Just-in-time scheduling is another part of America’s new “flexible” economy—along with the move to independent contractors and the growing reliance on “share economy” businesses, like Uber, that purport to do nothing more than connect customers with people willing to serve them.

New software is behind all of this—digital platforms enabling businesses to match their costs exactly with their needs.

The new flexibility doesn’t allow working people to live their lives.

The business media considers such flexibility an unalloyed virtue. Wall Street rewards it with higher share prices. America’s “flexible labor market” is the envy of business leaders and policy makers the world over.

There’s only one problem. The new flexibility doesn’t allow working people to live their lives.

Businesses used to consider employees fixed costs—like the costs of factories, offices, and equipment. Payrolls might grow or shrink over time as businesses expanded or contracted, but from year to year they were fairly constant.

That meant steady jobs. And with steady jobs came steady paychecks along with regular and predictable work schedules.

But employees are now becoming variable costs of doing business—depending on ups and downs in demand that may change hour by hour, possibly minute by minute.

Yet working people have to pay the rent or make mortgage payments, and have keep up with utility, food, and fuel bills. These bills don’t vary much from month to month. They’re the fixed costs of living.

American workers can’t simultaneously be variable costs for business yet live in their own fixed-cost worlds.

They’re also husbands and wives and partners, most are parents, and they often have to take care of elderly relatives. All this requires coordinating schedules in advance—who’s going to cover for whom, and when.

But such planning is impossible when you don’t know when you’ll be needed at work.

Whatever it’s called—just-in-time scheduling, on-call staffing, on-demand work, independent contracting, or the “share economy”—the result is the same: No predictability, no economic security.

This makes businesses more efficient, but it’s a nightmare for working families.

Last week, the National Employment Law Project reported that 42 percent of US workers make less than $15 an hour.

But even $20 an hour isn’t enough if the work is unpredictable and insecure.

Not only is a higher minimum wage critical. So are more regular and predictable hours.

Some states require employers to pay any staff who report to work for a scheduled shift but who are then sent home, at least four hours pay at the minimum wage.

But these laws haven’t kept up with software that enables employers to do just-in-time scheduling—and inform workers minutes before their shift that they’re not needed.

We need a federal law requiring employers to pay for scheduled work.

In what may become a test case, New York Attorney General Eric Schneiderman last week warned thirteen big retailers—including Target and The Gap—that their just-in-time scheduling may violate New York law, which requires payments to workers who arrive for a shift and are then sent home.

We need a federal law requiring employers to pay for scheduled work.

Alternatively, if American workers can’t get more regular and predictable hours, they at least need stronger safety nets.

These would include high-quality pre-school and after-school programs; unemployment insurance for people who can only get part-time work; and a minimum guaranteed basic income.

All the blather about “family-friendly workplaces” is meaningless if workers have no control over when they’re working.

Robert B. Reich, Chancellor’s Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written thirteen books, including the best sellers Aftershock: The Next Economy and America’s Future and The Work of Nations: Preparing Ourselves for 21st Century Capitalism. His latest, Beyond Outrage, is now out in paperback. He is also a founding editor of the American Prospect magazine and chairman of Common Cause.

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9 comments for Robert Reich: How the New Flexible Economy is Making Workers’ Lives Hell

  1. Comment by Kendall on April 25, 2015 at 1:16 pm

    How is that not unusual? The person described needs to:

    A) Have kids
    B) Not be married
    C) Have a job with on-demand hours (that alone actually IS still way outside the norm, as much as this article would like to pretend otherwise).

    I am so tired of doom and gloom articles that paint every single thing in the worst possible light. What about teenagers having one of these on-demand jobs? It’s great for them because if work cancels they just go do something else, like hang out with a friend. And the jobs being on-demand means there can be more of them, which is good for teens looking for work (higher minimum wage has made it much harder for teens to find ANY work these days).

    The fact is that some jobs just aren’t going to earn a lot of money. You can either have the minimum wage be low enough you can afford to keep workers on for steady regular hours, or you can raise minimum wage and force some businesses to do temporary shifts so they don’t have to pay workers for hours they do not need them. It’s not a negative, it’s just a balance.

  2. Comment by Andrew Hallock on April 25, 2015 at 1:38 pm

    This is just a precursor to complete automation of these jobs. Throwing more laws at the problem like duct tape is not accomplishing anything, only accelerating the rate of automation.

  3. Comment by katipo on April 25, 2015 at 4:08 pm

    This growing social class of employees has been referred to as the ‘Precariat’ due to their precarious existance with little security. The British economist Guy Stranding has written about how it is changing our society.

  4. Comment by Jeff Johnson on April 25, 2015 at 8:40 pm

    What this is called at most reputable businesses is “ON CALL” and if you are on call, you are paid even if you don’t have to go to work. On call pay is very common, these businesses need to be brought up for not paying for on call. I worked in Arkansas at a non union business and on call pay was paid if you were on call.

  5. Comment by Cindy on April 26, 2015 at 12:01 am

    If these companies were unionized,this kind of abuse wouldn’t happen. Workers are going to have to spend that “flexible” time getting organized.

  6. Comment by jo blo on April 26, 2015 at 4:48 am

    this is the same in Australia but generally they need 24 hours notice to have a shift cancelled as far as i’m aware or they get the four hours. companies particularly in warehousing think this is the smart thing to do. it’s stupid because they should be mutli skilling the good people and keeping them on for more hours in various positions. Most of the people that can work these short flexible hours don’t really care about the quality of their work and are happy enough to go work somewhere else on a whim

  7. Comment by jo blo on April 26, 2015 at 4:49 am

    this is the same in Australia but generally they need 24 hours notice to have a shift cancelled as far as i’m aware or they get the four hours. companies particularly in warehousing think this is the smart thing to do. it’s stupid because they should be mutli skilling the good people and keeping them on for more hours in various positions. Most of the people that can work these short flexible hours don’t really care about the quality of their work and are happy enough to go work somewhere else on a whim.

  8. Comment by JEDIDIAH on April 26, 2015 at 7:29 pm

    It’s amazing how readily some people will excuse abusive and anti-social behavior with such overused ideas like “it’s going away anyway” or “it’s only for teenagers”. Neither of those are really a good reason for being a jerk. Society has to have some level of decorum or really nasty chaos is likely to set in when a lot of people realize they’ve got nothing to lose anymore.

    I don’t know about the corporate apologists but I’m invested enough in the system that I don’t want it crumbling.

  9. Comment by Gerald on April 28, 2015 at 11:57 am

    You have got to be kidding me.If people actually understood that this is what a conservative vote gets you .
    its just a stop gap otw to robots anyway.
    i also wonder where this model was launched.

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