On March 23, I will be on a panel at the WCRI 34th Annual Workers' Compensation Conference. The focus is on the future, and what might disrupt workers' compensation as we know it. Our panel, The World of Work is Changing―Fast. Are you Prepared?, will be the ultimate event, just before adjournment on March 23. I expect the "gig economy" to be part of that discussion. It is more fully described in WCRI 34th Annual Conference (February 2018).
The "gig economy" is a hip and trendy term that I hear bandied about fairly frequently these days. It is of interest, with hot tech companies like Uber, Grubhub, Handy, and more changing the way we live. Just as they affect us as consumers, they are changing the world of employment also. The workers' compensation community is curious about and discussing the potential impacts of the "gig economy." Will it be a "game changer" or a flash in the pan?
I have run into the "gig economy" lately. Florida just passed a bill to provide work characterization clarity for those who work in one particular business model, those apps similar to Handy. See What is an Employee (March 2018). That post scratches the surface on a broader subject, independent contractors and the self-employed. Recently, I also wrote about the workers' compensation benefits that are afforded some independent contractors in New York, see The Gig Economy - Can it be Socialized? (March 2018)
There is so much involved with the classification and misclassification of workers. Many "employees" are provided a litany of benefits and comforts, while independent contractors are not. The trade-off is in the independence and flexibility contractors enjoy. Many also find a favorable advantage in immediate compensation, a trade-off for those other benefits. But the fact remains that injury results in cost, whether financial or personal. And, that cost must be borne by someone. Workers' compensation socializes that cost, as do programs like Social Security Disability, and a variety of other social "safety net" programs for food, shelter, medical care and more.
It occurs to me, in contemplating the "gig economy," that this disruptive technology, apps, etc. do not change the nature of employment. The "gig economy" has existed for a long time. The "disruption" is not creating this economic model, but merely encouraging or facilitating it.
Concurrently, we must reconsider the panoply of examples that are mentioned when technology disruption is discussed. Robotics, for example, are expected to change our world. Automatons are being deployed in our homes (vacuuming), factories, and even agriculture. CNBC recently reported, for example, that "robotic machines to pick everything from strawberries to apples are being tested" in both "Florida and California." This will disrupt employment. Technology is going to replace some measure of human workers. Not all, but certainly some. Some pundits assert it will be most.
These may replace people, and eliminate jobs. But, we may validly question whether this is any different than the elimination of jobs that occurred with the advent of steam power, the internal combustion engine, or the assembly line? While I hear expressions of fear and anxiety about the coming robotics and artificial intelligence, I struggle to accept that this technology revolution is really more pervasive in-depth than those revolutions already witnessed. There was a time when 90% of America's labor force was engaged in agriculture. Today, that is about 1% according to the government. The depth of that change was certainly significant.
What makes it different this time? Some argue it is different because "it is happening to me" this time. Perhaps that is fair. Perhaps it is easier to accept change when we view it retrospectively, historically, and through the prism of our own present well-being? Others contend that the current revolution is more pervasive, affecting a broader spectrum of job categories and people. They argue that farmers were the only ones affected by the industrial change, but that perhaps ignores that almost everyone was a farmer then. And, there are those who argue that the real distinction is speed, the speed of change seems incredible. Possibly, there is room in the analysis for at least some of each of these in our analysis?
There are apparent inter-dependencies also. Many drivers are engaged in the "gig economy" that is so talked about. There is discussion of how workers' compensation can deal with the risks associated with expanding populations of independent contractors, and the potential for significant impact on other social safety nets. But, concurrently there is discussion of the age of robotics, the self-driving car, eliminating the need for drivers altogether. This week Forbes reported that the First Death Of A Pedestrian Struck By An Autonomous Vehicle May Set Tone For Lawyers And Liability. Possibly such setbacks may influence the timing of development and deployment of technology, but it is unlikely to prevent it. Notice the tone of the headline is not about avoiding deployment, but about adapting how the law and regulation may accommodate it.
Employers are struggling with the potential for change impacting their business. It is possible that some businesses, tools, and services, will not be sought by consumers in days to come. Entire experiences may cease to exist in the commercial marketplace. It is likely that industry and work will shift. But, remember that before Carl Benz's foray into internal combustion, there was no need for auto mechanics, body shops, and so much more (there was no horse and buggy liability insurance industry). As automobiles proliferated, new industries and jobs evolved, but there was less and less demand for those who manufactured buggy whips. As a result, the term "buggy whip" has become slang for sliding into obsolescence or obscurity.
The New York Times focused on that simile back in 2010 (seems like yesterday) in Failing Like a Buggy Whip Maker? It describes a professor explaining the plight of "buggy whip makers" in 1960, and his views on adopting a perspective. He explained that those so engaged needed to think of themselves not as "buggy whip makers" but as "in the personal transportation business." A broader perspective better facilitates acceptance of change. But the Times author disagrees, suggesting instead that the "buggy whip makers" were doomed because the product itself was not transferable, there was "no automotive analog" into which they could shift. The analysis of this article confirms that the subject is both complex and amenable to different perspectives.
Our analysis must also include the realities of business and life for that matter. For a great many of us, there is a sufficient challenge in arising, getting to work, making it through the day, and then facing the array of home-front challenges (the yard work, laundry, feeding, and bathing kids, paying the bills, etc.). As a result of the panoply of daily challenges, perhaps we do not do a good job of thinking about and planning our individual futures, what's next, what's best?
In the same way, businesses may be too focused on designing better buggy whips, managing the workers that are making buggy whips, and selling buggy whips to really think about what the business would do in a world that demanded no, or at least less, buggy whips. In the cacophony of the day-to-day, is it possible to marshal the peace of mind to logically and intelligently think about tomorrow and beyond? Some commentators have suggested that new companies focused on technology change, like Waymo and Aptiv, might enjoy a comparative advantage compared to "legacy companies" like General Motors, Ford, and Toyota who seek to develop the "next thing" while dealing with the day-to-day of building and selling "today's thing" as well.
Admittedly, this is likely a challenge for us all. Success will come to some through good luck or happenstance. But for others, success will be identified, pursued, and captured through thought, planning, and execution. Those who will best survive the coming technological evolution will be looking to the horizon and considering options. As the New York Times author noted, it may be about transferable skills, e.g. what do we know and how would those skills integrate into some task other than today's. Knowing what you can do is only half the battle. Knowing how that brings value to someone else is the key.
We are seeing change. The legislative efforts regarding the "gig economy" illustrate that. The incredibly rapid deployment of "assistive technology" and robotics illustrates that. The creation of new industries will follow, and the demise of others is probable. The change will come whether we are ready or not. What we can change is limited to how we prepare for and react to the coming changes. Challenging to say the least, but we can individually and collectively either evolve or "go the way of the buggy whip." That choice between evolution and obsolescence is ours.
We are seeing change. The legislative efforts regarding the "gig economy" illustrate that. The incredibly rapid deployment of "assistive technology" and robotics illustrates that. The creation of new industries will follow, and the demise of others is probable. The change will come whether we are ready or not. What we can change is limited to how we prepare for and react to the coming changes. Challenging to say the least, but we can individually and collectively either evolve or "go the way of the buggy whip." That choice between evolution and obsolescence is ours.
I look forward to sharing the stage with an amazing panel. Ms. Denise Algire (@denisezoe), Mr. Charlie Kingdollar (@ckingdollar), and Mr. Steve Tolman (@stevenATolman) will provide us all an outstanding opportunity to better understand perspectives on this revolution (or is it just an evolution?).
