The Gig Economy

Changing the face of employment across the world

The changing nature of employment has been characterised by the rise of what has been termed  ‘The Gig Economy’, which refers to working environments based on temporary, commissioned labour. ‘Getting a gig’ used to apply exclusively to musicians, but now it can range anywhere from manual work to freelance writing. It’s similar to signing a zero-hours contract, but with even less security for both the employee and the employer. In the UK, around five million people earn a wage in this way. The increasing number of gig economy workers has led to governmental inquiries into working practices in an attempt to navigate rapidly changing job markets. Why is the gig economy so important, and what does it mean for the future of employment?

The ‘Gig Economy’ was thrust into the headlines earlier this year due to the questionable working conditions of two of the major players, taxi giants Uber, and takeaway delivery service Deliveroo.  Uber drivers won a court case against Uber and the right to be classed as workers rather than self-employed. Deliveroo is now facing calls from unions to offer the same for its workers. On top of this, sites like Etsy, Airbnb and outsourcing platform TaskRabbit have emerged as key players in transforming employment patterns, enabling millions of people to generate revenue from individual endeavour. Without company procedure to adhere to, workers can rely on their own skill and the feedback of customers to become successful.

All of this has stemmed from the digital revolution, which has opened up new opportunities for prospective innovators. The world of online retail may currently belong to Amazon, but the Internet has allowed individual sellers to make money and disrupt the total dominance of corporations. It’s a useful tool for potential startups, too. Through short-term, gig economy work, they can test the waters of a certain venture before investing completely. Social networking has also been key in providing a platform for small entrepreneurs to advertise their products, whatever they may be. This removes the problem of paying for publicity that they can’t afford.

Pros and cons
On the one hand, there are some real positives to being a gig economy worker. The hours are flexible and there are no restrictive contracts, which means more freedom. From an employer’s perspective, the fact that workers earn their money from commission means that they will work harder to make a better wage, which improves productivity. Temporary work is also very well-suited to certain people, like students or freelancers who want to be in control of their own time and work when it suits them. However, on the flip side, gig economy workers have next to no job security and don’t receive any of the benefits of working full time such as sick pay or holiday pay. As earnings are dependent on commission, it’s often the case that gig economy workers don’t even make minimum wage. While this may look like a simple case of employers exploiting employees, it’s not an ideal situation for either party. Without a permanent contract, workers aren’t under any obligation to accept a job. This means that companies could lack a sufficient workforce.

Disrupting traditional economy
Millions of people in the UK are turning to freelance work, but they’re not the only ones. The shift is global. In a study by Intuit, it was predicted that 40 per cent of American workers would be independent contractors by 2020. The mass movement from permanent contracts to short-term agreements is disruptive for economies as a whole, because it changes the nature of wage generation. Economic inequality is re-enforced by the concentration of wealth in the hands of big corporations – if this is distributed to multiple, smaller entrepreneurs, then perhaps there will be a more level playing field. The gig economy means that an artisan trader with internet access could be just as likely to get business as a big corporation (excluding Amazon, perhaps). This isn’t the best news for larger businesses, who will have to make way for an army of peer-powered freelancers. On-demand, freelance services will also make physical jobs and exchanges less necessary, which will be just as well as technology gradually automates profession after profession. There may also be an element of social disruption, as those with access to tech get the best on-demand services whilst those who can’t afford it are left without.

It’s certainly not an ideal set-up, but the gig economy may offer a plausible answer to widespread unemployment. As permanent positions are taken up by robots and Artificial Intelligence, jobs which require full-time, contracted employees will be few and far between. Individuals who work as freelancers, however, will be able to deal with the inevitable transformation of employment patterns. So, while it may look like they’ve been dealt a bad hand, gig economy workers are perhaps best-placed to ride out the storm. In order to facilitate and support this change, trading standard agencies and unions need to take more notice of temporary freelance work and clearly state what the obligations between employers and gig employees should be. The UK’s Department of Business is already trying to do this, and businesses should do the same. Ultimately, the gig economy is yet another example of globalisation via peer-to-peer networks, all made possible by the on-going digital revolution.

Does your business employ gig economy workers? Will the gig economy replace traditional employment patterns? Do the negatives of gig economy work outweigh the positives? Share your thoughts and opinions below.