Activity

Algorithmic, market-based solutions to wages in on-demand labor markets provide a potentially interesting alternative to minimum-wage mandates as a way to increase worker incomes. Rather than cracking down on the new online gig economy businesses to make them more like twentieth-century businesses,…

[...] Economists have long recognized this phenomenon. They call wages higher than the lowest that the market would otherwise offer “efficiency wages.” That is, they represent the wage premium that an employer pays for reduced turnover, higher employee quality, lower training costs, and many other …

That is, both traditional companies and “on demand” companies use apps and algorithms to manage workers. But there’s an important difference. Companies using the top-down scheduling approach adopted by traditional low-wage employers have used technology to amplify and enable all the worst features …

Labor advocates point out that the new on-demand jobs have no guaranteed wages, and hold them in stark contrast to the steady jobs of the 1950s and 1960s manufacturing economy that we now look back to as a golden age of the middle class. Yet if we are going to get the future right, we have to start…