Obama Warns Uber, Lyft, Which Don’t Pay ‘Living Wage, Disrupting ‘Social Compact’

“We had to tackle problems that had been building up for decades. And the central problem in our economy that had been building up for decades is the fact that while folks at the top did very well, ordinary workers were seeing their wages and their incomes flat lining. And so the biggest challenge America continues to have is making sure that everybody in this new economy is participating, everybody who works hard is getting paid a decent wage with decent benefits. Everybody has some basic economic security, and that the incredible productivity and wealth and innovation that has been a hallmark of the American economy is broadly based. Wages need to rise more quickly. We need jobs to offer the kind of pay and benefits that let people raise a family. And in order to do that, workers need a voice. They need the voice and the leverage that guarantees this kind of middle class security. And that's true now more than ever, during this time of rapid economic change. In recent years we’ve seen an explosion of American innovation in the work force. And because of technology, people are empowered and employers are empowered to create value and services in new ways. We’ve got folks who are getting a paycheck driving for Uber or Lyft, people are cleaning other people's houses through handy, offering their skills on task rabbit, and so there's flexibility and autonomy, and opportunity for workers and millennia’s love working their phones -- [laughter] -- much quicker than I can. And all of this is promising, but if the combination of globalization, and automation undermines the capacity of the ordinary worker and the ordinary family to be able to support themselves, if employers are able to use these factors to weaken workers' voices, and give them a take it or leave it deal, in which they don't have a chance to ever save for the kind of retirement they are looking for. If we don't refashion the social compact, so that workers are able to be rewarded properly for the labor that they put in, people like Terence [ph], then we're going to have problems. It is not just going to be a problem for our politics, creating resentment and anxiety, it's going to be a problem for our economy, because the history shows that when we do best as an economy it's when workers have money in their pockets, and they are able to buy goods and services and they in turn create new demand, and create new opportunity, and create the kinds of markets that businesses can then take advantage of. That’s just a fact.”