Uber driver checking phone From7:00 to 9:00 a.m. on Wednesday, drivers across the U.S. are goingon strike, demanding greater job security and a larger cutof the ride-sharing companies' revenues.

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I booked a 7:00 a.m. flight on May 8, and for once I'm glad I'mflying so early. Otherwise I wouldn't be able to take an Uber or aLyft to the airport. From 7:00 to 9:00 a.m., drivers across theU.S. are going on strike. The strikers' demands include more jobsecurity and a larger cut of the ride-sharing companies'revenues.

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Sadly, the strikers are unlikely to win their fight anytimesoon. With Uber poised to issue shares to the public and Lyft'sstock price having dropped since its IPO, and the companies areunder pressure to reduce their persistent losses. The quickestsolution is to cut driver compensation, which the companies appearto have been doing despite increasing dissatisfaction.

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Related: Uber drivers dealt a blow in quest for better payand benefits

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Eventually, the government will probably resolve the issue bydeciding whether gig economy workers should be classified asemployees or independent contractors. If it's the former, wages andbenefits will rise substantially, and companies like Uber and Lyftwill be in trouble. Donald Trump's Labor Department has come downfirmly on the side of the corporations, rescinding an Obama-erastatement declaring gig workers to be employees, and ruling againstthe workers in a recent dispute.

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The battle lines are thus being drawn for a new struggle betweencapital and labor in the U.S. The gig economy itself is small —maybe around 1 percent of the workforce. Even including independentcontractors and other arrangements, non-standard work representsonly a modest slice of the economy:

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But gig economy workers are typical of another, far largercategory of workers — those whose jobs involve providing servicesrather than making goods. These always represented a majority ofthe economy, but in recent decades the proportion has becomeoverwhelming:

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Within this broad category, labor-intensive industries likeeducation, health care, leisure and hospitality, transportation,and warehousing occupy an increasing share:

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This trend is not surprising. As manufacturing, retail and otherindustries become increasingly automated, labor will shift into theindustries that involve more human-to-human interaction. Althoughthis can pose a problem for productivity growth (since it means alarger share of the economy is represented by industries wheretechnological progress is more difficult), it represents a healthylabor market at work. Despite the rise of the machines, the marketkeeps finding things for humans to do.

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The question is whether the new jobs will pay as well. Some haveblamed the shift from manufacturing to services for increased wageinequality. Indeed, until recently, manufacturing workers tended toearn more:

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But the manufacturing pay premium may have been as much aboutbargaining power as it was about productivity. High rates ofunionization allowed manufacturing workers to insist on higherwages and better benefits, as evidenced by the so-called Treaty ofDetroit between the United Auto Workers and the big auto makers in1950. Unions weren't just a way of translating high productivityinto high wages — in fact, economic historians have found thatunionized workers were generally less skilled than their non-unioncounterparts.

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Could a new Treaty of Detroit improve jobs in education, healthcare, restaurants and other service industries? In some ways,service workers may have more potential bargaining power than themanufacturing workers of a hundred years ago. Manufacturing isrelatively easy to relocate: The movement of factories to othercountries and to less union-friendly states played a big role inundermining unions. But you can't move a restaurant or a school ora hotel or a taxi service to China or Kentucky. At least in theory,this means local service workers could wield great power if theyfigured out how to unionize a large percentage of the workers in anarea.

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The strikes at Uber and Lyft are one sign that a new wave oflabor activism is finally taking hold among service workers.Another is the wave of teacher strikes that swept the country in2018. In San Francisco, 2500 hotel workers staged a successfulstrike in 2018, winning raises, pensions and better workerprotections. Overall, 2018 saw 485,000 workers involved instoppages of some sort. That's almost 20 times the level of 2017,and the most since 1986:

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Is this the start of a new labor movement in the U.S.? Willlocal service workers finally demand that corporations stoptreating them as a floating, disposable labor pool, and create anew Treaty of Detroit for the new working class? It's too early totell, but a union revival looks less like a pipe dream than it didtwo years ago.

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Noah Smith ([email protected]) is aBloomberg Opinion columnist. He was an assistant professor offinance at Stony Brook University, and he blogs atNoahpinion. This column does not necessarily reflect theopinion of the editorial board or Bloomberg LP and itsowners.


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