The McKinsey Global Institute estimates that the independent workforce is some 162 million people, up to 30% of the working-age population in the United States (and most of Europe)..The report looked at the full spectrum of ways in which individuals earned income outside traditional employee roles. It says independent workers fit into four key segments:
– About 30% are “free agents,” who actively choose independent work and derive their primary income from it.
– Approximately 40% are “casual earners,” who use independent work to supplement their income by choice
– The “reluctants” make their primary living from independent work, but would prefer traditional jobs; they make up 14%
– Then there’s the “financially strapped,” who do supplemental independent work out of necessity, accounting for 16%.
McKinsey says its survey found the majority of independent workers in all countries participated by choice and were attracted by the flexibility and autonomy. But most of the people involved are young and are maybe, at this stage of their lives, indifferent to the lack of benefits, the income security and the non- existent training.
Those working for companies like Deliveroo, Uber are classed as self-employed and are expected to be freely and regularly available, to such an extent that there is no time to work for anyone else. They get no paid holidays, sick pay or pensions.
It’s all very well for young people to take advantage of the relative freedom offered by the “gig” employers, but the moment you decide to get married, buy a house and have children panic will, or should, set it. You cannot educate and care for a child not knowing whether or when you will get any steady income. It is unconscionable to expect a parent with two or three children to have no security at all, no annual holidays, no pension, and, if it comes to that, no parental leave. The point is that, if you have been working for years at part-time, rather than skilled work, how do you expect to get a serious, responsible, well- paid job with security later on, when you need it? Maybe you can argue that this is foolish lack of foresight, and why should we care if that is what they want to do. Be carefree now, suffer later?
So be it, but there is a type of money-obsessed, clever but autistic, top businessman who is fixing the economy in such a way that he can hire and fire with impunity, lower input costs and pocket the profits while being totally indifferent to the rest of us and to civilised treatment of workers, mWe will pay a high price for not reining them in.
(P.S From the U.S Department of Labor: “In early 2016, we announced that our Bureau of Labor Statistics will conduct a survey on contingent and alternative employment,for the first time since 2005 to help us understand how many of America’s workers are participating in “gig work”— that is, nontraditional work arrangements.” My comment: so by now you have the statistics; what have you been doing about them?)
According to your statistics, only 30% of people in the gig economy are economically insecure (if you combine the ‘reluctants’ and the ‘financially insecure’). That’s still far too high, but I don’t think its a crisis. I don’t have the figures to hand, but I wouldn’t be surprised if most of those 30% are young people without children.
I think we’ve got to be very careful before intervening here. Sure, you could ban such contracts and guarantee every employee a minimum number of hours. The problem with that is that the current existence of plentiful part time or informal work, would be replaced by fewer full time jobs. That would benefit the vast majority of that insecure 30%. But what about those who cannot have full time jobs because they have to look after their children? Even with a full time job, they may not be able to afford childcare, or may prefer the option to spend more time with their children at the expense of earning money.
But more importantly, the 70% who are happy with their jobs in the gig economy would be affected badly, myself included. I currently work part time in retail. I am guaranteed a minimum number of hours, and I’m often asked to do more, but the work is fairly flexible to suit my studies. If the government were to ban such jobs, overall unemployment would increase, even if the number of full time workers would also increase.
To a very large extent, I think the gig economy is simply a part of the modern world. Even when its exploitative, I’m not sure there’s very much the government can do to reduce the number of these sorts of jobs. What needs to change, are the rights of the so called self employed, who are actually working for a company like Uber or Deliveroo. Of course, if they are working full time, they should be given the same rights as everyone else. If we can’t rid ourselves of the gig economy, we should at least make it a more pleasant experience.
Its also worth pointing out that the welfare systems of both the US and the UK encourage the gig economy to expand. This is because both countries have a generous tax credits system for people in work, particularly those with children. Those who introduced or expanded tax credits (Blair and Bush respectively) argued that they reduce poverty, which is true. But they also allow companies to pay lower wages and offer less secure work, knowing that their jobs will be topped up by the welfare system. Moreover, they reduce the incentive to work hard, because as you earn more, tax credits reduce in generosity. The solution is to phase out the tax credits system but progressively increase the minimum wage. That way, every employer must pay their workers fairly, welfare spending is reduced, and the number of gig economy jobs would also reduce- though not to the extent to which it would be a detriment to those that want them.