THE FBA SDNY UNITED NATIONS REPORTER SERIES
By Valentina Coli
FBA UN Reporter
December 30, 2019
Changes in technology, economic activities and the environment were the key issues addressed at the UN General Assembly Second Committee, 74th Session, on October 24, 2019. “By the time we figure out the change, the change changes again. It’s a catch-up game, we’re chasing a moving target and that’s difficult for policy makers to regulate and manage economic models and activities at such a pace,” commented moderator Amid Rasheed. The “Green Economy,” the “Digital Economy,” and the “Sharing Economy” were three of the names used to describe the emerging economic models, noting how important it is to understand such models and their implications for sustainable development, especially in the context of profound economic and social transformation.
The term “Green Economy” is defined as any economic activity aimed at reducing environmental risks and promoting sustainable development, according to Helge Zeitler, the Environment and Climate Counsellor Expert of the EU Delegation. Noting that the Green Economy is an imperative because we’re exceeding our planetary boundaries, she reported that some Member States are already trying to take action. In fact, in the EU, jobs in the environmental goods and services field increased by 47% between 2000 and 2015. She also reported that even the private sector is involved in this progress. Indeed, more than 87 companies have expressed enthusiastic comments and showed their commitment to the UN framework. She noted that while things are indeed starting to change, such a change might be too late, and that several other factors might support a quicker transition to a more sustainable economy.
First, she reported, the Governmental role and commitment to the issue, is paramount. States have a fundamental role to play in delivering a clear regulatory signal that gives investors the ability to adopt long-term visions. For example, in March 2019, the EU Commission called for more ambitious carbon emission goals to achieve carbon neutrality by 2050. Second, research and innovation are key points in this transition along with facilitated access to finance and a supportive taxation system. Finally, the private sector must comply with sustainability reporting requirements and be held accountable for failure to comply. Thus, business-to-business and business-to-policymaker-networks should be created to achieve a “Greener” economy.
However, she acknowledged that this goal could shrink some job sectors and cause unemployment. Lower income categories that deal with the most traditional models of the economy would be affected the most, as happened with the “yellow vest” protests in France. But with clever taxation models and programs that engage in “upskilling” and “reskilling,” every worker could be included in the new economic system and every person could pay a fair amount of the cost.
The “Shared Economy” consisting of peer-to-peer activities such as acquiring, providing, or sharing access to goods and services, either through a community or a digital platform, is closely aligned with the Digital Economy, a model based on digital computing technologies. One of the key presenters was Alex Rosenblat, author of “Uberland: How Algorithms are Rewriting the Rules of Work.” She reported on this phenomenon and its implications for work, particularly how Uber drivers experience technology in the US and Canada. She began by framing the question as to whether Uber is an employer or a technology supplier. She explained that pursuant to Uber’s economic model “we’re not working, we’re sharing.” But, the question of “what is work?” raises many other questions about whether participants in the economy are even employees. She reported that in a recent lawsuit against Uber, the case examined whether drivers were properly categorized as independent contractors. Uber had claimed that drivers were, in fact, just “customers” of their technology, like the passengers. Uber argued that protestors should turn to consumers protection laws to address their grievances. It became clear that as to whether Uber is an employer or a technology supplier, the boundaries of these two categories are blurred. On one hand, the drivers are not independent since they’re regulated by an algorithm that enacts the policies Uber sets for them. For instance, Uber drivers cannot decide the most favorable ride path, and must accept the one Uber chooses for them. On the other, Uber and Lyft claim to be technology companies which permits them to avoid compliance with regulations that apply to transportation company.
In the end, Uber drivers are not entitled to workers’ protections including unemployment benefits. Moreover, she added, they can actually run afoul of antitrust laws if they try to stick together and set a common price. However, the European Court of Justice has held that Uber is not a technology company and, therefore, should comply with the applicable rules. Given these disparate findings, “the only solution left is international cooperation,” concluded Ms. Rosenblat.
A Shared Economy can also consist of peer-to-peer activities within the same community. Fidan Ana Kurtulus, Professor of Economics at the University of Massachusetts, addressed this issue focusing on the case study of farms owned by their own employees — defined as “cooperatives.” In a cooperative, each of the members has one vote in the decision-making process and shares equally in the profits. She reported that although data shows that such cooperatives are more resilient to recession, most people are unaware of how positive such a formulation can be. She noted that the UN designated 2012 as the year of cooperative. In case of recession, data shows that cooperatives are less likely to lay off their workers. Often, they produce more, and, therefore, survive longer. She reported that a study conducted by the University of Wisconsin found that in the U.S., there are 30,000 cooperatives with approximately 550 work members each. The world’s largest cooperative is the Mondragon System with 3,000 workers, located in the Basque region of Spain. This cooperative is comprised of one hundred cooperative enterprises, including factories, schools, and banks, and forms a self-sufficient community. This study highlighted that the Shared Economy system brings substantial benefits, including higher productivity, greater cooperation among workers, innovation, commitment and willingness to share information. Furthermore, workers have greater job security and greater job survival. They share prosperity and wealth so they have an incentive to increase the benefits of the cooperative. It also demonstrated that cooperatives keep money and jobs local which works to the benefit of the local community. As Ms. Kurtulus reported, cooperatives are more concerned for the environment and, as a consequence, many of them want to create green jobs and invest in reducing pollution in their territory. These employee-based companies and cooperatives also have stronger connections with the policymakers who see them as “public goods” to preserve. As a result, governments often offer incentives for financial institutions and banks to invest or loan money to cooperatives. They also incentivize the formation of these companies by granting them tax cuts, for example, in exchange for the implementation of civil rights within them.
In conclusion, the speakers of the panel suggested the adoption of a legislative framework regulating these new economic activities. Keeping pace with technological innovations will become harder and harder in the upcoming years, especially because the domino effect of changes in technology will always lead to more changes in other areas. By adopting such a legislative framework, the policymakers will define these economic activities once and for all and will reduce their negative impact on our society, our environment and, as a consequence, our lives.