Nov 22, 2019

Axios Login

By Ina Fried
Ina Fried

Sorry, the newsletter would have been here sooner, but my Cybertruck wouldn't start.

In any case, today's Login is 1,226 words, a 4-minute read.

1 big thing: Tech's new labor unrest

Illustration: Aïda Amer/Axios

The tech industry was born largely union-free, but there are signs its long management-worker harmony may be ending, as Axios' Scott Rosenberg writes.

Driving the news: Companies big and small have been making headlines more commonly associated with old-line manufacturing firms than tech giants.

  • This week, the New York Times reported that Google had hired an "anti-union consulting firm" as it navigates a rise in employee activism and protest.
  • A group of Google employees announced a rally Friday in San Francisco to protest the company's treatment of several activist workers.
  • Meanwhile, when Rev, a startup that farms out transcription work to freelancers, suddenly cut pay rates for its gig workers, they aired their complaint on social media and won an apology from the firm's CEO. (It helped that so many of their customers are journalists.)
  • Until recently, WeWork, the office-space rental giant, led the tech industry's "redefine work" crusade, but now, a wave of layoffs following a collapsed IPO is giving the company's employees a crash course in business realities. A group sent management a letter before the layoffs arguing that "employees need a seat at the table."
  • A union drive among employees at Kickstarter, the platform for artists to crowdsource project financing, has faced opposition from management.

The big picture: Silicon Valley's labor strategy has always aimed to replace the worker-vs.-management bargaining of the unionized industrial era with mission-driven, stock option-aligned unity.

Between the lines: That was always at best an aspiration, and at worst a fiction, but it helped keep large swathes of the tech industry union-free.

What's happening: Several factors are opening big cracks in that model.

  1. Startups, where a handful of early employees often share camaraderie and generous options grants at low strike prices, find it easier to make the unity case than mature public companies.
  2. At the biggest, most successful companies, a two-caste system has evolved, with full-time employees enjoying lavish benefits while large armies of contractors get a much less generous deal.
  3. The rise of tech-driven gig economy platforms like Uber has given armies of workers freedom and flexibility but also stripped them of the rights and benefits employees have long enjoyed.

The catch: In each of these cases, an "in" group gets all the spoils, while everybody else gets a lot less.

  • The stock option system insures that early employees win much bigger than late arrivals.
  • At big companies, full-time employees win much bigger than contractors.
  • At gig-economy platforms, a small number of employees at the parent company win much bigger than the drivers, delivery people and other workers who use the platforms to find work.
  • All this inequality rankles in an industry whose mission statements are full of bold talk about "level playing fields."

The other side: Anti-union sentiment remains a powerful belief in much of the tech world, which sees organized labor as "friction" that reduces corporate agility and divides manager-employee teams.

What's next: For decades federal administrative and legal support for labor has weakened. But if the Democrats take the White House and Congress in 2020, that could shift — at the same moment that more tech workers are growing disgruntled.

Go deeper: Big Tech workers call out their companies

2. Internet slowly returns in Iran

Iranian President Hassan Rouhani. Photo: Anadolu Agency via Getty Images

As protests over gas prices erupted last weekend, Iranian officials cut the nation's access to the internet. On Wednesday, according to state media, the government declared victory over the protests. Yet the internet has only begun to trickle back online, as Axios' Joe Uchill reports.

Why it matters: Keeping the internet off prevented global reporting of police abuses and prevents domestic coordination between protesters, Adrian Shahbaz of the human rights group Freedom House told Axios.

  • Freedom House recently listed the use of internet shutdowns to quell government opposition as a key threat to internet freedom in its Freedom on the Net report.

While reporting is spotty, largely because of the internet shutdown, Shahbaz said he has spoken with Iranians, who confirmed that the nation shut down its global internet connections, but left some access to national, internal sites.

As of Thursday morning on the U.S. East Coast, internet connectivity in Iran was only at 10% of its typical levels, according to connectivity monitor NetBlocks. That's up from 5% during the height of the protests.

Go deeper:

3. Obama: We're "chasing after the wrong things"

President Obama, speaking at Dreamforce 2019, with Salesforce co-CEO Marc Benioff. Photo: Salesforce

"We need to stop believing that more and bigger is better. We are chasing the wrong things," former President Obama told a Silicon Valley audience Thursday.

Why it matters: Obama's warning has an added layer of meaning here, where the tech industry has grown powerful and rich by mastering the art of "scaling up."

The big picture: Speaking at Salesforce's Dreamforce conference, Obama traced many of the problems in today's society to uncertainty fueled by globalization and automation, along with an underlying misconception of what it takes to be satisfied.

  • "What I also see is just this sense of anxiety and rootlessness and uncertainty in so many people some of which is fed by globalization and technology," he said. "So much of the political turmoil we are seeing right now has to do with people feeling materially insecure."

The bigger picture: Technology and globalization have "turbocharged" the anxiety, and we need to deal with the social issues that has created, he said.

  • "Part of the goal of solving big problems is not just a matter of finding the right technical solution," he said. "Part of it is also finding out how do we restore some sense of our common values."
  • "We're chasing after the wrong things," he said, adding that climate change tops his list of concerns. "There's such a thing as being too late."
4. Dissecting the Trump-Cook photo op

Tim Cook, Presdient Trump and Ivanka Trump at the Austin facility where the new Mac Pro is being manufactured. Photo: Mandel Ngan/AFP via Getty Images

For all its cringeworthy moments, there's a reason Tim Cook and President Trump were willing to pose next to one another in Texas this week: They both need each other.

Driving the news: The president showed up at the Austin factory where Apple makes the Mac Pro because he desperately needs to show something high tech being manufactured in America. Meanwhile, Apple needs the government's support, particularly when it comes to China and tariffs.

  • Cook was heavily criticized for not pointing out Trump's misstatements in suggesting that the plant was new. In fact, it's owned by Apple contract manufacturer Flex, and Apple has been making Mac Pros there since 2013.
  • Things got further unhinged from reality on Thursday when Trump tweeted that he pushed Apple to "get involved in building 5G in the U.S."
  • The company will, of course, eventually make 5G iPhones and iPads, but likely has neither the skills nor stomach for the expensive and unsexy business of making network equipment.

My thought bubble: For all the political expedience of the photo op, it's an image that indelibly ties the two men together and could easily become something that Cook (or even Trump) comes to regret.

Yes, but: At least Cook met with Trump out in the open. We only just learned — via some NBC News sleuthing — that Facebook CEO Mark Zuckerberg dined at the White House last month, breaking bread with President Trump and board member Peter Thiel.

5. Take Note

On Tap

  • The FCC will vote on an order banning companies from using telecom subsidies to buy equipment from Huawei and ZTE, and a proposal meant to help first responders locate 911 callers from inside multi-story buildings.

Trading Places

  • Carbon co-founder Joe DeSimone is shifting from CEO to executive chairman, with former DuPont CEO Ellen Kullman becoming chief executive.

ICYMI

6. After you Login

In case you were feeling smart, this 9-year-old is graduating from university with a degree in electrical engineering.

Ina Fried