Disclaimer: For this piece I’ve used LLMs like ChatGPT-4 because (AI) machines can be mostly unbiased (when guided correctly) and are tremendously helpful for researchers. At the same time, I’m well aware they can present biases, and hallucinate, thus presenting a false impression of knowledge or factual information. Errors could be mitigated by having reasonable knowledge of the subject matter and fact-checking. LLMs will constantly improve to mitigate errors and biases, and even beyond that, the future will be interesting when one day they will learn to think for themselves.
****Updated.****
Upon reviewing the study, I realized my previous criticism of the researchers was too harsh. I acknowledge that their work is legitimate and contributes valuable insights into the protection and rights of workers. While companies employing delivery drivers should seriously consider the paper’s feedback for improving work environments and worker considerations, the study needs to tread carefully with its legislative recommendations, particularly concerning minimum wage laws. It’s possible to advocate for workers’ rights while also recognizing the potential negative impacts of minimum wage regulations on consumers and society as a whole.
Introduction.
The minimum wage has always been a contentious topic, one in which I was able to understand its terrible repercussions no thanks to the late Economist Milton Friedman whose lectures and television programs shaped my worldview. In university, while studying and majoring in Sociology, I was also exposed to several great thinkers, including those on the other side of the political spectrum such as Karl Marx, whose ideas and arguments were pretty strong as well. Over the years, I’ve realized that people who lean left despise Milton Friedman. Their hatred stems from his free market and neoliberal values, which in turn meant that anything capitalist is inherently evil in their eyes. Yet, they often misunderstand him and twist many of his views when countering his arguments. By no means was Friedman perfect, and one can find faults in a few of his arguments. But by and large, he was on the side of the science of economics which could in turn provide a social good when applying sound empirical and theoretical evidence to economic claims.
I believe that the best person to judge a policy like the minimum wage law is someone who is not ideologically captured, and holds no dogmatic views. The best judge is someone who has grasped all sides of a debate. If such a person exists, they are best fit to be sought after for advice and implementation of laws that shape and affect society. Some of you may believe it to be impossible not to be ideologically driven, or to remove all beliefs that one has grown up being taught. I don’t believe it to be impossible at all. I think one can easily suspend one’s own beliefs in the same way one can suspend disbelief when watching a film, knowing full well it’s not necessarily real, but a piece of art or a form of entertainment. A step further is to radically discard all beliefs like the way René Descartes did (aka the epistemic reboot) with his radical form of doubt to align oneself closer to the truth if not the whole truth.
The ongoing minimum wage debate, and recent regulatory actions taken regarding gig delivery app workers, such as those imposed on Uber Eats, and Grubhub, among others, provide a clear illustration that should put an end once and for all to the debate and reveal who is in the right and who is in the wrong side of history. While the minimum wage is a well-intentioned policy, one doesn’t require an economics or business degree or any high academic education to observe real-life instances where the detrimental impacts of minimum wage regulations outweigh the benefits.
Recently, I came across a video of a regular guy who works as an Uber Eats delivery worker in New York City. As a novice sociologist, I can appreciate someone posting content on social media like this rather than me conducting fieldwork to understand a matter if don’t have to. In this day and age, it saves a whole lot of time. Anyway, this delivery worker named RideWithAnthony, made a video showing his discontent with the new minimum wage law that is currently in effect in New York City for app-based restaurant delivery workers, which affects how much he and other delivery workers earn.
/*
ChatGPT:
The YouTube video discusses the recent increase in the minimum wage for app-based restaurant delivery workers in New York City to $19.56 per hour before tips. The video presents a critical view of this wage increase, suggesting that while it appears to support workers by raising their hourly earnings, there are several unintended consequences:
- Scheduling Challenges: The narrator points out that a higher hourly wage is ineffective if workers do not get enough scheduled hours. The supply and demand for delivery workers in NYC are described as oversaturated, which complicates the ability to secure enough work hours.
- Impact on Employment: The video argues that requiring companies to pay a fixed hourly wage for what is traditionally a flexible, contract-based job doesn’t make sense. It mentions that some delivery workers have lost their jobs as companies adjust to the new wage requirements.
- System Manipulation: There is a suggestion that some delivery workers might “milk” the system by working slower to ensure they get their full hourly wage, given the structure of the payment system which might not incentivize efficiency.
- Potential Pullback by Companies: There’s a concern that food delivery companies might reduce their operations in NYC or seek cheaper alternatives due to the increased costs, including potentially using automation like delivery robots.
- Political Influence: The video also touches on the role of political and activist groups in pushing for the wage increase, suggesting that the decision benefits these groups more than the workers themselves.
The presenter of the video uses personal anecdotes to argue that these changes might not lead to the intended positive outcomes for all delivery workers and could have broader negative effects on the service economy in New York City. Overall, the video provides a perspective that the minimum wage increase, while well-intentioned, may lead to complex shifts in how delivery services operate, affecting both workers and consumers.
**/
Mayor Eric Adams Makes Economy and Jobs Announcement. City Hall Rotunda, Lower Manhattan, April 1, 2024
/*
ChatGPT:
The new minimum wage law for food delivery workers in New York City, effective as of July 2023, is aimed at ensuring fair compensation for app-based restaurant delivery workers. The law sets the minimum pay rate at $17.96 per hour before tips, which is a significant increase from the previous average wage of $7.09 per hour for these workers. The rate increased to $19.56 in April 2024. The initiative also includes provisions to adjust the pay rate annually for inflation.
This landmark legislation follows a comprehensive study conducted by the Department of Consumer and Worker Protection (DCWP), which gathered input from delivery workers, app companies, and other stakeholders. The law covers compensation for both the time spent on deliveries and the time workers are on-call waiting for orders.
The implementation of this law marks a significant step towards improving the working conditions for over 60,000 delivery workers in the city, recognizing their essential contributions especially noted during the pandemic. The law also stipulates ongoing monitoring and compliance efforts by DCWP to ensure that delivery apps adhere to these new regulations (Welcome to NYC.gov | City of New York) (Welcome to NYC.gov | City of New York).
**/
Continue:
Based on ChatGPT’s explanation of this new minimum wage law, this so-called landmark legislation follows a comprehensive study conducted by the Department of Consumer and Worker Protection (DCWP). Now, my question is, will this same department (who may or may not have a conflict of interest for workers’ rights) conduct a follow-up comprehensive study and see the effects of this landmark legislation? A pupil of Milton Friedman would know not to judge policies by their intentions but by their results. And oh boy, do we have some results felt already on the field!
One of the positive effects of this legislation is probably making the roads safer and reducing accidents in the congested city, due to some delivery workers going at a slower pace since they no longer are required to speed up to make the ~$19 an hour; because if the delivery worker decides to go faster on their vehicle (e.g., car, bike, or scooter), thus risking their and other’s safety to deliver the food, they end up doing it for no massive reason since the reward (compensation) will be the same outcome had they paced themselves in that hour for that one delivery. As a New York Times article stated, “A report by the city published in November 2022 said that the fatality rate among food delivery workers who don’t use a car was 36 deaths per 100,000 thousand workers from January 2021 to June 2022. That rate surpassed that of workers in construction (Seven deaths per 100,000), which had historically been the deadliest industry.” Ironically, these statistics come from the same New York City Department of Consumer and Worker Protection (DCWP).
However, in the same DCWP study, I hoped that they would have considered the negative effects of the minimum wage legislation. So I checked and let ChatGPT analyze this comprehensive study.
/*
Can you summarize and highlight key points in this article:
ChatGPT:
The comprehensive study conducted by the New York City Department of Consumer and Worker Protection delves into the working conditions and pay rates of app-based restaurant delivery workers. Key highlights from the study include:
- Current Earnings: Delivery workers earn on average $14.18 per hour, including tips, with expenses averaging $3.06 per hour, reducing their net take-home pay.
- Proposed Pay Rate: The study supports a proposed minimum pay rate of $23.82 per hour excluding tips, which is broken down into $19.86 as the base rate and additional amounts to cover workers’ compensation and other expenses.
- Impact on Services and Stakeholders: The new pay rate is expected to encourage apps to use workers’ time more efficiently, potentially raising delivery costs for consumers but possibly increasing restaurant profits if customers choose direct ordering over app-based services.
- Worker Demographics and Conditions: The majority of delivery workers are young, male, and from minority groups, with many relying on this job as their primary source of income. The study also notes high rates of occupational injury among these workers.
- Feedback and Data Collection: The findings are based on data from restaurant delivery apps, surveys distributed to delivery workers and restaurants, public hearings, and stakeholder interviews, providing a comprehensive look at the app-based delivery ecosystem.
This study offers a detailed insight into the financial and working realities faced by delivery workers in New York City, informing the proposed adjustments to their minimum pay rate to better reflect their contributions and living expenses.
*/
The so-called comprehensive study ironically and correctly concluded that the large increase in app delivery worker pay will have indirect effects on apps, consumers, and restaurants. Yet, one key point they wrongly concluded was that “… the minimum pay rate has been constructed to minimize any adverse consequences.” Their assumption of their model was wrong, and that means going back to the drawing board and doing follow-up research to see where they went wrong and correct their mistakes. There is no shame in being wrong. The shame is in not correcting it.
The sad reality is that we live in a system in which when a law is passed, it becomes increasingly difficult to appeal it. RideWithAnthony mentioned there was a group of about 2000 delivery workers who signed a petition to appeal the law, but he seems to believe there is no hope of changing the new minimum wage system. Likewise, the same delivery apps tried to fight the law before it came into effect, but lost when a Judge affirmed city rules mandating at least $17.96 an hour before tips for Uber, Grubhub, and DoorDash workers, clearing New York as the first major U.S. city with a guaranteed driver wage. The article, Court Clears Minimum Hourly Pay for NYC Food Delivery Workers stated:
“Barring further legal challenges, the companies must begin paying delivery workers $17.96 an hour before tips beginning on the first day of each app’s next full pay period. In rejecting the apps’ request for an injunction, Moyne called any harm to Uber, DoorDash and Grubhub “speculative,” noting that they will be able to pass any increases in costs on to consumers. The decision came after the four companies, which jointly account for 99% of food deliveries in the city, filed lawsuits in July challenging the wage rules, arguing the pay obligations would cause irreparable harm to their business.
Delivery worker leaders, who had been advocating for better wages and pay standards for more than three years under the banner of Los Deliveristas Unidos, cheered Moyne’s decision and vowed to hold the companies accountable.” Sergio Ajche, a cofounder of the group who delivers for Grubhub, said on Thursday that he was “contentísimo” — thrilled — with the judge’s decision.
This is a classic case of the tyranny of the status quo, the tyranny of a flawed democracy where the majority and special interest can strangle a flourishing nation, fully backed and endorsed by the politicians and the courts! The DCWP’s conclusion is wrong because the minimum wage for delivery workers did not provide any flexibility for the employers (i.e. the delivery app companies), nor did the rule create an incentive and opportunity for the apps to achieve substantial productivity improvements. Clearly, the cost has been passed down to the consumer, and not to mention, the delivery workers are one of the biggest losers since they will work less on their schedule, thus earn less despite the so-called increase in wages, which in turn makes it harder for them to survive in a high cost of living area. Who knows, maybe some of the delivery workers get so disgruntled and choose to opt out and choose another side; yes, SIDE GIG! Or better yet, another career path.
Now, I don’t mean to sound mean about the gig economy or seem like I look down upon it. I certainly don’t. A side gig or a side hustle is better than doing nothing, it’s better than being unemployed, and I believe the app delivery service business model can work with some adjustments, especially with the appeal of the minimum wage law and taking into consideration some major inputs by the deliver workers. The article by Vox stated:
But we should give credit where it’s due. Delivery apps have expended a lot of effort (and money) making the case that we — restaurants, workers, and consumers — desperately need them. Unhappy about the state of things now? You’ll really be pulling your hair out if you try to force the apps to change. In New York City and Seattle, new minimum pay laws for delivery workers recently went into effect.
Immediately, additional “regulatory” fees were charged to customers, and restaurants and delivery workers complained that orders dropped, with Uber claiming in a blog post that they had dipped by 30 percent. Neither city’s minimum wage laws have forced delivery apps to tack on new fees, but both DoorDash and Uber Eats have introduced them nonetheless. (Grubhub did not.) The message is clear: If you try to mediate how the apps operate, things will just get worse.
Now, Sens. Elizabeth Warren (D-MA), Bob Casey (D-PA), and Ben Ray Luján (D-NM) have sent letters to DoorDash and Uber calling on the companies to stop charging junk fees. “When additional hidden fees nearly triple the price of an order, that is price gouging — plain and simple,” reads a copy of the letter sent to Vox.
Tragically, the app companies are the ones taking the blame for something they cannot control and have no fault in. By no means is my aim to defend big tech companies. Believe me, I have much-reserved criticism of big tech companies for another time. I stand for truth and defend it where it lies no matter what. In this matter, the tech companies are on the right side of this debate. They are wrongly blamed for price gouging when it is the cost of running a business to survive, therefore the cost has to be offset by the consumers, and so forth. A YouTuber by the name of CashJordan constantly and annoyingly sheds light on the dystopian nightmare of New York City, with its looting, crime, migrant crisis, and so forth. Despite some of my hatred of his content where I think he should be more equal and present the good as well, he has the freedom to choose what video to make.
/*
Can you tell me which pushed for this legislation to pass, which activist groups, unions, etc. all organizations involved?
ChatGPT:
Several activist groups, unions, and organizations were involved in advocating for the minimum wage legislation for food delivery workers in New York City. Notably, Los Deliveristas Unidos, a collective of app-based delivery workers, played a central role in pushing for these changes. This group has been active in highlighting the challenges faced by delivery workers and organizing for better pay and working conditions.
Additionally, the Worker’s Justice Project supported the movement, providing crucial backing and advocacy for the rights of delivery workers. The New York Taxi Workers Alliance also supported the initiative, emphasizing the shared struggles between different types of gig economy workers and their collective efforts in securing fair labor practices.
These organizations, along with other labor advocates and community groups, have been instrumental in bringing attention to the issues faced by delivery workers and advocating for the establishment of minimum pay rates to ensure a livable wage for these essential service providers (Welcome to NYC.gov | City of New York).
**/
Los Deliveristas Unidos Website: https://losdeliveristasunidos.wordpress.com/
Essential but Unprotected: App-based Food Couriers in New York City By Maria Figueroa, Ligia Guallpa, Andrew Wolf, Glendy Tsitouras, and Hildalyn Colón Hernández (2021).
New York City Department of Consumer and Worker Protection Notice of Public Hearing and Opportunity to Comment on Proposed Rules
Los Deliveristas Unidos website shows what I believe is the official research paper called, Essential but Unprotected: App-based Food Couriers in New York City By Maria Figueroa, Ligia Guallpa, Andrew Wolf, Glendy Tsitouras, and Hildalyn Colón Hernández that was used to lend credibility, and recommend government intervention. Again, I’m skeptical because of the biases of their research towards workers/laborers which appears to be a conflict of interest.
Website of the Worker Center Workers’ Justice Project: https://www.wjcny.org/about
The Worker Institute website: https://www.ilr.cornell.edu/worker-institute
Prof. Antony Davies: The Minimum Wage Debate — Does it Hurt Workers? | Learn Liberty
*/
Can you summarize this YouTube video:
ChatGPT:
The YouTube video titled “Does the Minimum Wage Hurt Workers?” explores the economic effects of raising the minimum wage, particularly focusing on how it impacts different types of workers. The video uses a hypothetical scenario involving a burger joint owner and three employees of varying productivity to illustrate its points. Here are the key takeaways:
1. Selective Impact on Workers: Raising the minimum wage does not universally benefit all workers. While it increases earnings for some, it can lead to layoffs or reduced hiring, especially of less productive workers. For example, in the video scenario, a worker named Carl, who produces less than his wage post-minimum wage increase, becomes unprofitable for the business and risks losing his job.
2. Effect on Business Profits: Employers might retain more productive workers who generate enough value to cover the increased wages, but less productive workers might be let go or not hired at all because they do not generate sufficient economic value to justify the higher wage.
3. Long-term Consequences for High Performers: The video argues that more productive workers, like Bob in the scenario, would likely receive higher pay over time either from their current employer or from competitors recognizing their value, regardless of minimum wage laws.
4. Impact on Unemployment: The video claims that increases in the minimum wage tend to have a more negligible effect on unemployment among highly educated workers, such as college graduates, compared to more significant adverse effects on less educated, less skilled workers.
The video concludes that while the intention behind minimum wage laws is to help workers, they can inadvertently harm less skilled workers who might find themselves out of work due to the higher cost of employment.
Recreating the table from the video:
News recently came out that The Seattle City Council is considering changes to the city’s minimum pay standard for app-based delivery drivers. The proposed changes would reduce hourly and per-mile rates, change how pay is calculated, and roll back regulatory requirements placed on companies earlier this year. The goal is to make delivery services more affordable to customers, but advocates for the pay standard argue that the changes go too far without sufficient information. The council’s quick action to amend the law, which is only four months old, reflects concerns raised by drivers and restaurants about the impact of the new law. This shift in approach indicates a move toward giving companies greater power, in contrast to previous councils’ emphasis on labor regulations. The article gives the feedback of a driver:
Andi Honer, who’s been delivering for six years, says no. When the law took effect in January, she saw her earnings drop in half. Though she was making more per trip, she was getting fewer orders and smaller tips.
Since then, her earnings have rebounded slightly, but are still below what she made the year before.
“Before, I was making $3 on an order, and now I’m making $8 on an order, but after 40 hours of work I’m making half the amount I was making before,” she said.
With this news, all hope isn’t lost, and indeed appealing a harmful law is possible in our democracy. Seattle politicians, leaders, and educators need to wake their people up, and teach them how to resolve the issue. There is nothing wrong with organizing for a just cause. However, one needs to be very careful and consider what policies organizers are proposing to ensure it doesn’t have adverse negative effects that are far worse than without them. As Milton Friedman would say, “I’m on your side, you just don’t know it yet.”
Conclusion.
The case study on App-based delivery workers proves that deploying a minimum wage that increases every year and adjusted for inflation, employs an increasing maximum cost to employers. Not only that, it is at the detriment of the over-saturated market of delivery workers in NYC who will find they have less active time on their schedule, and earn less money due to the imposed hourly rate on a side gig economy. In other words, as the delivery worker RideWithAnthony correctly assessed, requiring companies to pay a fixed hourly wage for what is already a traditionally flexible contract-based job doesn’t make sense. Again, I’ll reiterate, it doesn’t make sense at all! All these activist groups and organizations that pushed for this legislation should be ashamed of themselves and take a closer look at their harmful minimum wage policy.
// A side note: I believe some economists can over-complicate their research and need to take other factors into consideration.
ChatGPT:
David Card, an economist at the University of California, Berkeley, won the 2021 Nobel Prize in Economic Sciences for his empirical research that challenged conventional views on labor economics, including the effects of minimum wages. Card’s significant work in this area was conducted alongside Alan Krueger. They explored the impact of minimum wage increases on employment by studying a real-world example in New Jersey, where they found that increasing the minimum wage did not hurt job growth at fast-food restaurants, and might have even boosted it. This finding was influential as it contradicted the traditional economic theory that suggests raising minimum wages leads to higher unemployment.
Their research was groundbreaking and led to a broader acceptance of the view that raising the minimum wage can have positive effects on the economy without the negative employment effects often predicted by classical economic models. This work has continued to influence policymakers and has significant implications for wage policy debates globally.
For more on Card’s work and its impact, you can refer to the Nobel Prize announcement and further details provided by UC Berkeley here and here.
*/
P.S.
For workers to file a complaint: https://www.nyc.gov/site/dca/workers/workersrights/Delivery-Workers.page
Contact your representative to express your views: https://www.house.gov/representatives/find-your-representative
Receipts:
Milton Friedman on the minimum wage:
Other delivery worker’s anecdotes:
// The debate has even made it to a premium television network.
Social Scholarly 