A Better Working Gig Economy

The gig economy has received enormous public attention over the past few years. But how can workers in the platform economy have their interests represented and bargain for better pay and working conditions.

Over the last few years, the development of newer technologies has brought fundamental changes to the way we work and the type of locations at which we do that work. Standard work contracts and engagement with an employer have changed dramatically which seems to be making work more intermittent and in many cases less stable.

This is due in part to long-term trends of non-standard work arrangements, and the rise of the platform economy or gig economy which has become a major game-changer.

Companies that are part of the gig economy are on the verge of overtaking the traditional economy. A driver, a musician, a freelance videographer or anything in between, the concept has caught on and is a major factor in how sectors are organised and how people view work. And while one-off jobs are not new, the increasing use of technology has substantially contributed to a wide proliferation of “gig” work.

The gig economy has been growing exponentially in size and importance in recent years and its impact on labour rights has been largely overlooked. It is still difficult to estimate the exact number of workers, as businesses are sometimes reluctant to disclose the data. It is rather complicated to draw an estimate, since workers might be registered with more companies in the same month, week, or day.

However, available estimates range from 0.7 to 34 percent. The Bureau of Labor Statistics reported in 2017 that 55 million people in the U.S. are “gig workers”. This accounts for approximately 34 percent of the U.S. workforce, projected to increase to 43 percent in 2020.

Getting paid for ones’ work in the gig economy also seems to be a big problem. A recent survey by the New York-based Freelancers Union indicates that 50 percent of freelancers have trouble getting compensated for their work. Late payment was usually the problem, however a third of those surveyed experienced situations in which they were not paid at all for work already completed.

There is also a growing body of research that makes a useful distinction between ‘crowdwork’ and ‘work on-demand via apps’. For example crowdworkers operate online through platforms that connect vast numbers of clients, organizations, and businesses, often across borders. Because crowdwork is performed online, an infinite number of workers and clients are often spread over large geographic distances.

On the other hand, ‘work-on demand via apps’, is platform-facilitated yet place-based and geographically limited work. These distinctions result in different strategies used by crowdworkers and place-based platform workers.

Are workers using the gig-economy to top up their income or is it their only income?

Informal conversations with people participating in the gig economy have provided different perspectives on the value of their new jobs in the gig economy. Some have said that it gets them out of the house or provides them with something to do or to meet new people. This reply was more common among retirees. Others said it helped them pay for a special night out or buy an extra bag of groceries. None of the respondents in these informal discussions said it paid a wage they could live on and hence they had to hold several side jobs to make ends meet.

The rise of the gig economy can pose risks to societies at-large, when for example it becomes the only economy, replacing entire groups of employees and their full-time jobs with workers who are not protected by labor laws, or eligible for benefits and social security. This new class of workers, who are constantly searching for new contracts, may not be able to keep up with the most important factor in the future of work: developing new skills.

In the gig economy, work has been broken down into smaller, time-bound tasks. This has given rise to an ever expanding universe of sites that list tasks for people to perform. These platforms include TaskRabbit, Upwork, FlexJobs, Uber, Rover, Fiverr, Care.com or Instacart which can often involve a simple service like hanging pictures or driving a car to more complex but equally short-term work such as Virtual Executive Assistants to Medical Auditors.

Consumers outsource services to gig workers because they do not have time to do it themselves or it is simply cheaper than hiring a company. While gig-workers are constantly in search for their next work assignments, it is difficult to engage in learning new skills. The types of skills needed in today’s labour market have been changing rapidly and therefore individual workers need to engage in life-long learning to maximize their employment opportunities.

On the other side, companies realize that they have to plan reskilling strategies for their employees which must take a life-long learning approach. This can be an important approach for companies to attract and retain the best talent and be seen as a good employer that invests in talent and contributes to socially responsible business practices.

Today, many companies are helping educators to create skills-based programs and look to identify future job prospects at high schools, where talent can be discovered and nurtured early. This seems to be shifting some people’s thinking about work and careers away from the traditional liberal-arts education which can prepare them for a college degree towards more job-related skills. This new approach aims to provide vocational skills to young people entering the labor force and set them up for better work prospects.

However, next to the technical skills, social skills and critical thinking will be of particular importance to future job-seekers. Additional qualities like creativity, empathy, communication, imagination, problem-solving or strategic thinking may become more important moving forward. The dilemma is that a traditional liberal arts education already provides these types of soft skills training so this component shouldn’t be lost but rather supplemented by training on hard skills that are in demand.

In addressing today’s persistent gap between the skills needed in the labour market and those offered by the workforce, the ILO recommends a skills anticipation or skills forecasting approach which is a strategic and systematic process through which labour market actors identify and prepare to meet future skills needs.

This helps to address the gaps between skills demand and supply. A skills anticipation strategy enables training providers, young people, policy-makers, employers and workers to make better educational and training choices, and through institutional mechanisms and information resources leads to improved use of skills and human capital development.

An important issue from the gig workers’ side that is not often explored is the protection of their rights under labor law since the gig economy present unique challenges. Gig workers are often classified as independent contractors which under certain laws precludes them from forming associations to protect their rights and engaging in collective bargaining.

Gig workers often labour independently, in isolation, over geographically expansive areas, and in direct competition with one another. Additionally, gig work is often short term or task-based and online labour platforms have high worker turnover rates.

One thing is for certain, the gig economy will remain central to the future of work. The gig economy provides an important opportunity for income and employment for a growing number of workers. It enables workers who would normally be excluded from the labour market on account of disability, care responsibilities or illness, to participate.

However, there remains a number of concerns about the conditions of work, and the potential for the gig economy to provide consistent and fairly paid work for all who rely upon it. Smart and effective policies are needed to help both workers and the platforms live up to expectations.

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