On the wrong side of history yet again, Hillary Clinton has decided that her road to the White House is tearing down one of the great economic movements of the last decade, the sharing economy.
In an economic speech she is planned to give, Clinton will highlight the stagnating wages of the middle class and points to causes that include Uber and Airbnb. This is mind blowing for two reasons, one is that the bloc of voters that she absolutely has to appeal to is not only benefiting from these services but sees them as a part of their economic portfolio. Secondly, the marketplace for services is fundamentally shifting from one of hardened connections between companies and employees to one of loose connections that increase and decrease based on personal preferences.
Clinton’s aide said she will discuss some of the structural forces conspiring against sustainable wage growth, such as globalization, automation, and even consumer-friendly “sharing economy” firms like Uber and Airbnb that are creating new relationships between management and labor (and which now employ many Obama administration alumni). But she will argue that policy choices have contributed to the problem, and that she can fix it.
Hillary Clinton wants to return Americans to an era where earning income happened exclusively in the context of an employee-employer relationship. In addition to that, she wants to restrict individuals access to a market where utilizing assets like home, apartments, and vehicles for income is an option and is effectively excluded from the worst aspects of government, rent-seeking, which conspires to depress the stagnated incomes that Clinton is right to call out!
UPDATE: I finished the above paragraph after my friend, Paul Greenberg, alerted me to the incomplete sentence in my original post. He also made a comment about this not being a “sharing economy” but rather a new dimension on renting and I largely agree. More than anything else, Uber and Airbnb are just two examples of a bigger movement that enables income to be extracted from 2 of the biggest capital expenses of the middle class, homes and cars.
Mary Meeker’s recently published 2015 Internet Trends Report highlighted some of the generational changes that are occurring and the impact on the future of work. See Slide 111. Flexible hours and freelancing are integral beliefs underpinning economic freedom for this generation and Clinton’s position is directly at odds with that.
Far from being a cause of middle-class stagnation, the sharing economy offers a rare moment of optimism. Roy Bahat recently published an outstanding essay titled Your Career is a Mess that highlights one of the seismic shifts affecting employment in the 21st century, which is that we are no longer single threaded in the employee-employer relationship.
Hillary Clinton’s entire campaign is emerging as a grab bag of tired progressive policies that have actually attacked the middle class rather than empowered it. Wage growth has stalled because growth itself has stalled, this is not shocking to any economist and yet the candidate continues to parrot talking points about childcare and paid time off, infrastructure investment, and clean energy. Rather than embracing and expanding the economics successes of the last decade, Clinton would take us back to the last century, proving that she is on the wrong side of history yet again.
PS- Comments were not enabled in the original post, I corrected that with this update.