Today’s News & Commentary—May 11, 2017

Published May 11th, 2017 -  - 05.11.174


The New York Times reports that Canada’s technology sector may benefit from the Trump Administration’s efforts to restrict immigration and immigration’s increased centrality in the American political debate.  After the travel ban was announced, Canada received an increase in temporary and student visa requests.  While not enough time has elapsed to determine whether the “Trump effect” has staying power, early signs indicate that fields, such as artificial intelligence, will benefit by attracting foreign workers.  The Atlantic suggests Canada is well-positioned to capitalize on these developments.  The country has publicly welcomed immigrants and invested in its technology sector.  Read more here.

Uber is piloting a personal injury insurance program for drivers in eight states.  The insurance program will be funded by a mix of increased fares for customers and a fee for drivers who opt-in.   Customers will pay five cents more a mile in these states, and drivers will contribute 3.75 cents per mile.  Maximum benefits will equal $1 million for medical expenses, $150,000 in survivor benefits, and wage replacement of fifty percent of a driver’s weekly earnings.  However, Uber has not escaped criticism by instituting this program.  Commenting on this development, Rebecca Smith, the deputy director of the National Employment Law Project, objected to the optional nature of the program and stated that “[i]f Uber valued its workers, it would simply pay its workers’ compensation premiums and cover all of them.”

In other gig economy news, the New Yorker published a piece on liberals embrace of the gig economy.  Nathan Heller details the connections between Democratic political operatives and companies, such as Airbnb and Uber.  While showing that the gig economy is a source of wealth for some, the article highlights evidence suggesting that those who benefit the most from the gig economy are not the same people who benefited from the service industries being disrupted.  Describing the findings of Boston College Sociology Professor Juliet B. Schor, Heller observes,

“[i]nstead of simply driving wealth down, it seemed, the gigging model was helping divert traditional service-worker earnings into more privileged pockets—causing what Schor calls a ‘crowding out’ of people dependent on such work.  That distillation-coil effect, drawing wealth slowly upward, is largely invisible.”

In light of these effects, Heller asks what can be done to make the gig economy viable over the long-term.  Read more here.

Greg Ip at the Wall Street Journal takes issue with the notion that automation is rapidly destroying jobs, calling it “baffling and misguided.”  He points to U.S. job growth numbers and a lack of productivity gains as evidence that the U.S. is not on track to experience a “robot apocalypse.”  Many growth sectors of the economy are not easily automated such as health care, education, and hospitality.  Ip suggests that business should not be worried about robots causing job loss but instead industry leaders “need to figure out how to use [robots] more, especially in low-productivity sectors.”  The alternative he suggests “is a tightening labor market that forces companies to pay ever higher wages that must be passed on as inflation, which usually ends with recession.”

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