Is Technology Fostering a Race to the Bottom? | NYTimes

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One of the differences between rich and poor countries is that in the latter, people seldom wait for the government to “create jobs.”

When times are hard, the informal economy grows. In much of the world, the informal economy is bigger than the formal one, but it has been pushed onto the sidelines in the West. Now, a new informal economy is in the making — a peculiar byproduct of the digital revolution.

A new group of technology start-ups is building online platforms to facilitate offline transactions in this new informal economy: renting out your spare bedroom (Airbnb ) or Volkswagen (RelayRides ); hawking yourself as a handyman (TaskRabbit ) or personal chef (Kitchit ); selling custom-made furniture (Etsy ); or transcribing someone’s interview tapes (oDesk ). In each case, a transaction that was possible but complicated before is smoothed by the matchmaking skills, quality assurance and rating systems of a known company.

It is a lucrative new labor market, and also a way of going back to what the labor market was like before there were anti-discrimination laws, minimum wages and hours ceilings — with all the liberties and efficiencies and perils that implies.

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