Inside the Digital Society: The gig economy

Last week I wrote about some of the big picture issues affecting jobs – employment – in the digital society. How many jobs are likely to be created, and how many destroyed, by automation? How different will the jobs experience be in different countries?

The gig economy

It’s very hard to predict the answers to these questions. This week I’ll take the focus down to one job sector that’s emerged of late – to platform jobs, ‘the gig economy’. There’s been a lot written on this lately.

Here’s one definition of this new labour market: ‘a free market system in which temporary positions are common and organizations contract with independent workers for short-term engagements.’ The jobs involved are various: some high-skilled (software development, remote diagnosis), many low (such as data processing); some based at home, others (like Uber and delivery services) on the move.

This is not, of course, the first new type of employment that’s emerged in the evolving digital society. Fifteen years ago, many saw call centres in much the same way as they now talk about gig jobs.

Call centre jobs may now be heading for the exit door as increasingly they’re automated. Many gig jobs could go the same way too in time, but for now their number’s growing. As many as a tenth of UK workers are said to be somewhere in the gig economy (distorting official data on employment and self-employment) for at least some part of their work time.

Characterising jobs

What makes these jobs different from traditional work?

First, the employment relationship. The platforms that allocate work here see themselves as intermediaries, not employers; their workers as freelance contractors rather than employees (even if the platform is their sole employer). Their role, as platforms, as they see it, is merely matching supply with demand.

Second, therefore, their work’s divided into tasks rather than jobs. Workers are employed and paid by the minute or the unit of work rather than for so many hours a week or longer periods of time. They may do one thing time and time again without encountering others involved in the processes on which they work.

Third, and also therefore, workers are treated as individuals, isolated from their peers. It’s much harder for them to act collectively, to organise in unions, to challenge the power of their platform/employer.

This, too, is not entirely new. Platforms’ use of digital technology to match supply and demand in real time’s new, but employing people by the task’s, if anything, an older model of employment than employment contracts. Textile workers called it piecework. Manual labourers, dockers and other groups of workers were often hired by the day at factory gates.

Different viewpoints

So is this good or bad? As usual in the digital society, changes in technology suit some but don’t suit others, and we need to give more thought to down- as well as up-sides.

Platforms claim their gig workers thrive on the flexibility that gig employment offers: workers can work, the platforms say, when and for how long they want, they aren’t tied down by contractual obligations, they can fit work round other commitments (childcare, for example) in ways traditional workers can’t.

And for some that’s clearly true. There are happy Uber drivers; there are those who love to freelance on PCs at home. The flexibility suits certain lifestyles – though it’s less attractive to those with dependents or mortgages, where security’s important, than it is to those who’re earning extra when they’re not in college.

So how common is that positive experience? How do gig workers fare compared with others? And if that’s badly, what can or should be done? Five aspects:

Winners or losers?

First, most gig jobs – not all – are poorly paid. You have to work long hours to make enough to live on. Of course that’s true of many older jobs as well, particularly low-skilled manual work and areas like social care.

Second, quality of work. Working online can be demanding, stimulating or boring. Driving customers round town can lead to interesting conversations and physical risks. Some gig jobs are particularly challenging, even harrowing: think of the low-paid ‘content moderators’ hired by social media companies to look for images of sexual abuse without the counselling support they’d get if they were conventionally employed.

Third, employment rights and benefits. There’s an important variation here between countries. The rights and benefits outlined in international rights agreements are much more prevalent in wealthy Northern labour markets. Generations of European workers have expected pensions, sick pay, maternity and paternity leave, health and safety inspections and protection and, in larger employers at least, collective representation through trades unions. In the gig economy, they’ll get none of these.

Fourth, job security. Gig workers’ workflow depends on the platforms that they work for, and conditions can be onerous. Some platforms insist that workers work only for them and not for rivals. The pace and quality of work is tightly monitored with penalties for what is seen as poor performance. Customers can rate performance and affect their rates of pay, with few controls for bias and discrimination. Jobs can be terminated by platforms at will.

Fifth, skills and career development. Traditional employers train their staff, but ‘freelance workers’ have to train themselves. Career paths are mostly non-existent (you can’t become a supervisor) or fragile (you have no job security). It’s harder to build up a profile that makes you more attractive when seeking better-paid and more secure jobs elsewhere – the ones with pensions, say – so long as they remain out there.

What can be done about this?

Improving the quality of work and work experience for gig workers isn’t easy but some steps are being made.

There are now unions that seek to represent them, though they’ve found it hard to gain recognition from platform employers (and some have faced hostility from unions representing more traditional workers).

There’ve been legal challenges to the asymmetric contracts that platform employers have imposed on platform workers – placing obligations on the worker, not the platform – with a few cases in which courts have ruled that platform workers should be treated as employees with employment rights (and, for platforms, relevant tax payments).

The Fairwork Foundation is a kitemark scheme designed to test and rank platforms’ performance in five areas of work and work experience – pay, conditions, contracts, management and representation – and encourage them to make improvements. It’s had some success in pilots, starting in South Africa, and will be reaching other countries soon.

Societal implications

But there are also implications for societies in general, which take us back to the big picture issues around employment that I wrote about last week. Here are three to start with.

First, the growth of a dual labour market: those that have employment rights and those that don’t. The former are more likely to be skilled and qualified; the latter to have fewer skills and prospects. The likely impact on (in)equality is obvious and potentially lifelong for those who stay in gigs .

Second, the impact of that dual economy on competition. Gig employers save money by not offering employment benefits – which can add as much as 40% to the cost of employing someone in a European country. Nor do they pay employment taxes such as Britain’s ‘national insurance’ which finance the education, health and other services on which their workforce depends. The cost savings involved give them competitive advantage over more traditional employers.

Third, the development of national capabilities. Almost every national digital strategy insists that continuous skill development’s essential for future prosperity. At best, platform businesses offer their workers limited training that’s specific to their tasks in hand, not to their long-term skills development. The burden of reskilling falls on workers themselves and, if they’ve the resources, on their governments.

'Inside the Digital Society' will take a break over the Northern winter / Southern summer holiday, and will return on the 13th of January.

Image: "Gig Economy", by Neil Schofield, via Flickr Commons

Read also: 2019 Global Information Society Watch on Artificial Intelligence, human rights, social justice and development 
David Souter writes a weekly column for APC, looking at different aspects of the information society, development and rights. David’s pieces take a fresh look at many of the issues that concern APC and its members, with the aim of provoking discussion and debate. Issues covered include internet governance and sustainable development, human rights and the environment, policy, practice and the use of ICTs by individuals and communities. More about David Souter.
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