Are Gig Economy Workers Here to Stay?
Long story short, the rise of neoliberalism as an ideology has led to the rise of the gig economy that we know of today. But what is the gig economy about? What is it at its very core? And more importantly, is this a sustainable form of work, here to stay in the long run?
The rapid developments in digital communication have led to companies being ran entirely on middle-man, third-party platforms. When we talk about the gig economy, the images of food delivery workers, freelancers and more come to mind. Although freelancers have always existed before this, the pandemic has further accelerated the growth of jobs in the gig economy, with many people taking up jobs delivering food.
Gig work can be classified according to two factors: skill level and location, thus four types overall: high skill + remote work, high skill + local work, low skill + remote work, and low skill + local work, according to Vallas & Schor. The most popular gig jobs these days, such as being a food delivery driver, is “low skill + local work”, thus many reasons why many have taken up these jobs.
For single mothers or married women with children, they require greater flexibility in working schedules as they still have to balance childcare/caregiving, with most working women in Singapore generally having to struggle with both.
For people with lower education, they usually do not have skills applicable for work of higher pay such as white-collar work, and to learn those skills required along with certification to deem them qualified require large amounts of money, which is what they do not have. They are thus restricted to lower paying, lower barriers to entry jobs.
Racial and ethnic minorities do suffer in finding work in Singapore as well. In lieu of the above, gig work seems tempting: it offers a flexible schedule, it has generally lower barriers to entry, and anyone can be a Grabfood rider regardless of their race and ethnicity. The ubiquity of the internet on the phone allows anyone to join, again emphasising lower barriers to entry.
It seems to paint a beautiful outlook for people attempting to earn more money, but is gig work as good as it seems?
The truth about gig work and the gig economy is that it is precarious. Workers receive less legal benefits and rights from employers, as they are not classified as regular employees in the eyes of the law, rather, they are classified as “independent contractors”. In cases of countries like the US, the fight to redefine the rights the gig workers are entitled to – especially in states more focused on the protection of labour rights – emphasises the vulnerability that the workers experience. Rights and benefits a regular employee receives include paid sick leave (though very limited in number), company-sponsored skills upgrading, health insurance, and in Singapore’s case, the Central Provident Fund (CPF). They are also not protected from suddenly losing their jobs, and are very susceptible to changes in demands. For example, during Circuit Breaker last year, Grab drivers who ferry people saw a drop in their business as people avoided leaving the house as much as possible. Still, while one could point out that at the very same time food delivery services (which engage mostly gig workers) flourished at that time, one should also note that this is at an expense to their health, as they are at higher risk of being exposed to an infected person as compared to white collars who get to work entirely from home.
There is also the fact that supply far outweighs demand in labour for the gig economy — negotiation for better prices and conditions is hard when there are always people too happy to take your place if you do not offer a lower rate, or work for lower pay, thus resulting in a downward pressure spiral on wages.
In the long run, the lack of career progression coupled with the lack of safety nets and job security do not bode well for the future. For workers with low education levels, they lack opportunities to upgrade their skills through gig work, nor do they have companies that will provide the avenue to do so. As such, though they may be able to afford slightly nicer meals every once in a while, they are stuck doing the same low level gig work again and again.
On the companies’ side, companies like Grab are still making losses, despite the massive volume of transactions the platform handles daily, be it through food delivery or riding services. It is still making a net loss of several hundred million, even at this stage where it’s practically a household name. Even internationally-known companies in the states like Lyft are also making losses — so really, how long can the gig economy bubble last?
Overall, while the gig economy may be flourishing as of now, it is hard to say that this form of work will remain sustainable and profitable for both sides in the long run.
References:
https://www.gobankingrates.com/money/business/famous-companies-arent-profitable/
