What Is The Gig Economy, And How Does It Affect Gig Workers?

A global debate is brewing regarding independent workers, also known as the gig economy. But what exactly is it? And how significant is what’s going on?

Working nine to five for a single job or being on the payroll is no longer a reality for millions of people. Instead, they balance multiple sources of income and work autonomously, job by job.

What is the Gig Economy?

You’ve probably participated in this sector of the economy if you’ve ever used an app to contact a freelance taxi driver, book a vacation rental, order food, or buy a homemade craft.

It is in the spotlight not just because it is expanding and providing economic benefits in terms of productivity and employment, but also because it raises concerns about consumer and worker protection and labor-market rules.

While gig-economy workers frequently reject the privileges afforded to employees on the payroll, a court in the United Kingdom ruled in February that drivers for a car ride-hailing service are eligible for benefits including paid time off, a living wage, and retirement savings.

Similar themes may be found in other nations, with Spain poised to pass a new law classifying gig-economy riders as paid laborer’s. According to the Financial Times, a comment from the Labour Secretary indicating that some workers might be categorized as employees wiped billions of dollars off the value of some of America’s largest gig-economy companies.

The World Economic Forum’s Jobs Reset Conference on 1-2 June 2021, which will look at mobilizing a jobs recovery strategy, will focus on the future of work beyond the COVID-19 pandemic.

Currently, the share of total employment held by gig economy platforms is modest, ranging between 1% and 3%, according to the OECD, which also claims that the share is expanding rapidly.

According to a Mastercard estimate, global gig economy transactions are expected to expand by 17% per year to roughly $455 billion by 2023.

Moreover, as the market expands and the companies at the top of the food chain become larger, the challenge for policymakers and authorities will be to balance the need for job-creating innovation with the need to ensure that the companies offer workers a fair deal. Companies in the gig economy complicate product-market regulation, competition policy, taxation, and labor-market laws.

According to a UK government survey, the main component that people working in the gig economy were generally delighted with was independence and flexibility. Respondents were unsatisfied with work-related benefits and salary levels, with one-quarter indicating they were very or very dissatisfied with those parts of their job.

These companies can provide flexible working patterns for students who wish to earn money while studying or main carers who want to fit work around school or daycare hours.

Who is employed in the Gig Economy?

According to the OECD research, the most prevalent reasons for working for gig economy platforms include earning more money and having more work freedom.

The research comes to the conclusion that “overall, the vast majority of gig workers are pleased with their jobs,” and that working for gig economy platforms tends to reflect mostly voluntary decisions rather than a lack of other possible employment options.

independent workers are divided into four categories:

  1. Self-employed individuals who chose independent labour as their major source of income.
  2. Casual earners who choose to supplement their income through independent work.
  3. Reluctants, who earn a living mostly through independent labour yet would prefer traditional positions.
  4. Financially strained individuals who perform extra independent labour out of need.

Public policymakers face the challenge of keeping all four of these groups satisfied in the gig economy, which may include altering policy settings to be digitally ready. According to the McKinsey Global Institute research, challenges exist but are not insurmountable.

According to what was stated in the introduction, “issues like benefits, income-security measures, as well as training and credentials present chances for politicians, entrepreneurs, and new intermediaries to deliver answers.”

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