The gig economy has yielded record amounts of revenue and profit this year for U.S. companies such as DoorDash, Amazon, and Walmart but not much has trickled down to workers, many of whom make less than minimum wage, or worse, fall below the poverty line. The low wages are a human rights violation, according to a United Nations poverty expert who’s calling on CEOs of these corporations to recognise that workers are not being paid enough, as Vice reports.
In many cases workers are not only unfairly compensated, but also unfairly treated. They’re not categorized as workers, which is part of how corporations are getting away with paying such criminally low wages. The UN expert writes:
“I am extremely disturbed that workers in some of the world’s most profitable companies – in one of the richest countries on earth – are struggling to afford to eat or pay their rent,” said Olivier De Schutter, the UN Special Rapporteur on extreme poverty and human rights.
“Multi-billion dollar companies should be setting the standard for working conditions and wages, not violating the human rights of their workers by failing to pay them a decent wage,” De Schutter said.
De Schutter went on to ask for a reply from the CEOs to reports of inadequate pay and, specifically, the misclassification of their gig workers as independent contractors. De Schutter also asked companies to address their resistance to unionisation. But the crux of the argument is the rise of “in-work poverty,” which is when the working poor can’t hope to work their way out of poverty.
It’s a reversal of the country’s creation myth, or the idea that you only have to pull yourself up by the boot straps, but that’s a convenient narrative mostly for the companies behind the gig economy, and it could be detrimental to the U.S. since many of their workers rely on public assistance. The government is basically subsidizing Amazon, Wal-Mart and DoorDash’s workforce, as the UN explains:
The Special Rapporteur pointed to a US Government report naming all three as among the top employers of Government medical and food assistance recipients.
“Jobs are supposed to provide a pathway out of poverty, yet in all three companies the business model seems to be to shift operating costs onto the public by relying on government benefits to supplement miserably low wages,” he said.
Among the examples cited by De Schutter, DoorDash was one of the worse offenders. In some cases, workers make $2.00 per delivery, as Vice reports:
DoorDash also received a letter from De Schutter, in which he alleged that “DoorDash’s procedures, practices and algorithms lead to many DoorDash workers being paid below the minimum wage, or even the poverty line, leaving them and their families unable to access an adequate standard of living.” Motherboard has previously reported on how DoorDash’s tip-based payment model has left some Dashers begging for extra tips from customers, as they only make around $2 per delivery from the company and are not compensated for gas or travel.
“As a result of classifying workers as independent contractors, unclear algorithms, and unfair tip practices, DoorDash workers are often not paid a living wage, and as a result, many DoorDash workers cannot afford their basic needs,” De Schutter wrote. “DoorDash drivers are not guaranteed a minimum level of pay and may be paid well below what the company advertises, the minimum wage, or even the poverty line.…Despite working full-time for DoorDash, one employee reported that he lives in his car and relies on SNAP [Supplemental Nutrition Assistance Programs].”
De Schutter also noted the food delivery company had filed suit to stop a law in New York City requiring companies to pay gig workers a minimum wage of nearly $18 per hour. DoorDash replied to the letter, saying that De Schutter misunderstands the benefits of being an independent contractor:
“These allegations fundamentally misunderstand how DoorDash provides economic opportunity and financial security for millions of people who want to earn money when, how, and where they choose,” a DoorDash spokesperson said. “On average, Dashers in the U.S. earn over $25 per hour on delivery, and Dashers globally earned $13 billion last year alone. An overwhelming majority of Dashers consistently say they prefer to remain independent contractors, and it’s because this is supplemental work that enables them to earn extra income.” The spokesperson said that the vast majority of U.S. Dashers were already employed, either full-time or part-time, and did DoorDash as a form of supplemental income.
Amazon also responded to the letter saying it invested $1.3 billion in wage increases across the U.S., and that it provides flexible schedules to workers.
Even so, Amazon reported $514 billion in net sales. While that isn’t profit, it’s still way more than the $1.3 billion spent in wage increases. These companies could easily pay workers or contractors much more than they currently do.
The companies’ argument, invariably, is that they are providing workers opportunities. But companies forget that without those workers, they simply wouldn’t exist. Workers, contractors, whatever, don’t owe companies anything.
Photo: Carlos Avila Gonzalez (Getty Images)