The demystification of Silicon Valley

Tuesday 18 July 2017

Book recommendation – Steven Hill calls for a civil rights movement for equal jobs.

In the richest part of the USA, a few hundred thousand people live in poverty, 15,000 are officially homeless, more than twice as many stay overnight in their cars, and employees with two or more jobs queue for vouchers from the municipal nutritional support in Palo Alto. The German weekly newspaper ‘Die Zeit’ reported about it a few months ago. Fake news? Not at all. The US author and journalist Steven Hill also draws attention to the social distortion in the ‘promised land’ of the future in his recent book ‘The Start-up Illusion’.

Hill demystifies the start-up hype on the American West Coast. The new start-ups do not create any job miracles but lead to a world of work of digital day labourers. More and more platforms connect customers with workers, mostly click- or crowd worker – but with strong social discrepancies and inequalities. Hill speaks of the future world of work as the ‘fight for the crumbs-economy’. ‘For several hours of computer work these nano-workers receive an hourly rate of $ 1,94, roughly EUR 1,70’, says the author. Contributions to health or pension insurances: dead loss. Thus, not only workers but also social security funds suffer, and the state loses tax revenues to a growing extent.

Hill also demystifies the big ancestors of the start-ups, the computer-giants. He calls these fast-growing companies ‘unreliable job motors’. Twitter employs less than 4,000 employees and platforms like Uber or Airbnb manage millions of low-paid subcontracts with only a few thousand permanent employees. Last year Hill conducted some research in Germany in order to be able to draw a comparison between the situation in Germany and the USA. He warns that social standards in Germany could be threatened. Whereas he appreciates the social security system and collective bargaining policy, Hill criticises the White Paper ‘Work 4.0’ of the Federal Employment Ministry. Most recommendations purely focus on full-time and normal employment contracts, but neglect to initiate ways out of precarious employment.

According to Hill’s research more than 18,000 people try to find work via the click-platform ‘Upwork’ in Germany, recent estimates refer to 1.3 million people in total. Germany’s health insurance scheme alone would lose EUR 600 million. Hill recommends trade unions demand more studies and calls for a civil rights movement for equal jobs: the same recognition of work regardless of its status.

Gunter Lange in ‘ver.di news 9, 24. Juni 2017’

(Translated by Aileen Körfer, Policy Officer at UNI Europa)