What is the Gig Economy?
Gig Economy refers to a situation in which an employee functions in the labor market by taking orders and completing specific projects and does not provide services in a full-time model. This new phenomenon has been developing since the beginning of the 21st century with new technologies. Easier and easier access to the Internet has given new tools for employer-employee contact and created a space for exchanging services or content remotely. The gig economy phenomenon is often associated with people forced into this model by lack of permanent employment, but this is only part of the truth. IT professionals, the financial industry or creative professions such as graphic designers and creatives looking for interesting challenges often function as giggers.
What positions fall under the Gig Economy?
Many different jobs fall into the gig category. Jobs can range from driving for Uber or delivering food to writing code or articles for freelancers. For example, adjunct professors and part-time professors are contract workers, as opposed to tenured or tenure-track professors. Colleges and universities can cut costs and match professors to their academic needs by hiring more adjunct and part-time professors.
Does the Gig Economy actually offer freedom?
One of the benefits the Gig Economy offers is pretended freedom. Employees can decide on many things such as the hours and days they work, and they don’t have to stick to one predetermined schedule. However, will such perks reward them with security? Definitely not, such workers most often do not have health insurance, job security, benefits or protection like traditional employees.
They are often considered independent contractors, which can result in a lack of labor rights, including minimum wage and overtime protection.
As Forbes reports, “This classification has led to numerous lawsuits and regulatory disputes, such as the case of Uber drivers in California demanding that they be recognized as employees rather than contractors. While some platform workers may value their autonomy, they may prefer to have more of the rights and protections guaranteed by traditional employment.”
Work-life balance
For some employees, gig work flexibility can actually interfere with work-life balance, sleep patterns and daily activities. Flexibility in the gig economy often means that employees must be available whenever assignments come in, regardless of their other needs, and must always be on the hunt for the next assignment. Competition for assignments has also increased.
Lack of relationships between employees
Due to the fluid nature of transactions and relationships within the gig economy, long-term relationships between employees, employers, customers and suppliers can become a problem. This can eliminate the benefits of building long-term trust, customary practices and friendships with customers and employers.
It can also discourage the introduction of integration between employees that would otherwise be profitable, as neither party has an incentive to invest significantly in a relationship that lasts only until the next performance.
Unfair clients (i.e., not getting paid for work)
“A 2018 survey by Paypal found that 51% of freelancers were not paid for their work, while a study by IPSE in the UK found that freelancers lost an average of about £5,934 a year working for free.” – as reported in Medium
Companies often hire contractors to solve specific problems or work on short-term projects to improve a particular segment of the business. However, these projects often turn out to be a huge waste of time and investment, as temporary workers are paid on a part-time or hourly basis while they work on a project that requires a much larger real-time investment to complete.
In addition, the company can often offer contract extensions as an incentive or threaten to terminate the contract to force the temporary worker to complete more work faster.
Outsourcing
“The process of outsourcing jobs leads to further outsourcing, creating a rift in the workplace, leaving “many without fair and decent wages, a career path and a secure work environment,” according to David Wei in his book “The Fissured Workplace.” A worker’s earning potential drops dramatically when he or she is converted from an ordinary worker to a contract worker. Low-income contract workers, in particular, work under increasingly difficult working and security conditions and no longer have the prospect of advancement within the company in the long run. The most insidious aspect of job outsourcing is that it affects those who earn the least the most. As profit margins shrink the farther down the chain, companies often take shortcuts on labor and safety standards for those who are already in a precarious economic position.
In the United States, the minimum wage has remained at $7.25 since 2009, despite inflation and the ongoing recession. According to Bureau of Labor Statistics data, adjusted for inflation, the minimum wage in 1968 was $10.90, nearly $4 more than the current rate. As a result, some of the people most affected by companies’ increasing tendency to hire temporary contractors instead of full-time workers are those doing ‘unskilled’ labor-intensive work.” – as reported by investopedia
In conclusion, while the Gig Economy offers many benefits and on the surface appears to be an easy source of income, it also has its dark side. The issues of job security, economic stability, social isolation and management complexity deserve close examination. To see this clearly, we must question the image of complete freedom and flexibility, recognizing the trade-offs and potential harms associated with the gig model. In our pursuit of technological advancement and economic efficiency, we cannot ignore the costs borne by the workers who drive the gig economy. To build a more equitable future, it is important to address these issues and reimagine the gig economy as a system that prioritizes both flexibility and worker well-being.
Sources used:
https://www.investopedia.com/terms/g/gig-economy.asp
https://medium.com/blankpage/the-dark-side-of-the-gig-economy-e60b91e00535
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