Authors: Rosalind Smith and Beatrice Nolan of Mauve Group
The gig economy has been the stand out work trend of the 2010s. Driven by the rise of “disruptive” companies like Amazon, Uber and AirBnB, as well as technological innovations, instability in the traditional job market and the growing popularity of “side hustles” – gig work looks set to grow an even stronger foothold in the coming years.
Although some workers praise the flexibility of the model and companies value its administrative ease – there are those that argue the system is exploitative to workers or vulnerable people caught in a gig work loop. From a global perspective, the gig economy becomes even more complicated when variations in local labour laws allow the system to flourish in some locations, while in others, open it up to exploitation.
With the gig economy seeping into popular culture in the form of Oscar-winning Nomadland and experts predicting the model could overtake the traditional 9-5, is the gig economy gearing up to be our global future? If so, how can the model be kept sustainable and beneficial for both workers and businesses?
Nomadland’s Gig Economy
The gig economy has even hit the silver screen this year, with Nomadland winning Best Picture, Best Actress and a historic Best Director award for Chloe Zhao. The film stars Frances McDormand as Fern, a widow who loses her job and house in a factory town amid the foreclosures that followed the 2008 recession. Setting out on the road and making a home from her van, Fern finds seasonal gig employment as part of Amazon’s CamperForce program.
The film was inspired by journalist Jessica Bruder’s book Nomadland: Surviving America in the 21st Century which examines the growing community of older Americans eking out a living as transient seasonal workers. Through the real-life stories of people met on the road, Bruder highlights the precarious nature of their existence from a financial, physical and emotional health perspective, and the exploitation of their hard-working nature by employers.
Both the film and book also illustrate the exceptional creativity of these workers to survive a recession in a country with complex access to welfare support. In that sense, the story of these nomads distils the central arguments within the gig economy debate.
On the one hand, the model offers an opportunity for survival and personal freedom to individuals who have been let down by the job market, state and economy. On the other, workers are vulnerable to exploitation, often working physically-demanding roles with no employment rights and little opportunity to unionise.
With Nomadland praised as a depiction of Modern America, and the gig economy model picking up increasing pace worldwide as a result of the pandemic, what are the benefits to workers and companies alike? What can we do to counteract the negatives if the model is here to stay?
The Growing Popularity of “Plug-and-Play Labour”
The gig economy model rose in popularity throughout the 2010s – and the COVID19 pandemic caused a further boom last year. Some predict that almost 50% of the American workforce will be engaged in freelance or gig work by the year 2023.
With some traditional jobs put in jeopardy by the economic fall out of the pandemic, demand for casual work is on the increase. The flexibility offered by gig jobs helps individuals to choose their hours, work multiple jobs at once, work around their familial commitments and even end their commitment to the job whenever they want. Amid the “rise and grind” mentality of so-called hustle culture (relentlessly working to achieve goals), the gig economy is becoming the ideal way to commodify your skills or time.
From a corporate perspective, there are obvious benefits to the gig economy. Jessica Bruder describes nomadic gig workers as “plug-and-play labor, the epitome of convenience for employers in search of seasonal staffing. They appear where and when they are needed. They bring their own homes and aren’t around long enough to unionize.”
For companies where the job can be taught quickly and cheaply, the gig economy frees up resources in the payment and administration of employment benefits. In certain roles, gig economy practices simulate the efficiency of automation where the technology hasn’t quite caught up yet – for example picking, packing and delivering goods.
Gig workers can be very beneficial to startups or companies with an eye on global expansion. The concept allows them to dip their toe into a new location without the financial and compliance commitment of a full hire, and get started faster than the timescales associated with sourcing permanent workers. It opens up access to a big bank of workers who are often flexible with shifts, or keen to work as many hours as possible.
Many companies set their gig workers speed targets to win additional bonuses – and this productivity boost can be useful when entering a new market. But how do these expectations track when the worker isn’t a full employee, and receives none of the benefits of employment? Are the financial incentives enough to compensate for the downsides?
Shift Patterns and Employer Loopholes: The Downside for Gig Workers
Some of the key issues with the gig economy were raised by a UK report last week. The report detailed around 10 million people working in the gig economy in the UK are being given less than a week’s notice of shift changes. Hospitality, retail, and warehousing were just three of the main sectors impacted by last-minute and unreliable shift patterns. The report prompted key British politicians, such as the mayor of Manchester, to call for new employment laws to protect gig workers.
Issues around workers’ rights are regularly thrown up around the world in association with the gig economy. Another allegation is that the business model has a tendency to target marginalised groups. In the UK for example, 25% of BAME workers were employed in the gig economy, compared to 14% of the rest of the population. In the USA, 44% percent of African American and 39% of Hispanic people reported that gig economy roles were their primary source of income, while only 31% of white Americans reported working in gig roles.
There is an amalgamation of socio-economic reasons for this such as education disparities that often affect minority groups and social mobility obstacles that are built into many professional sectors. The gig economy offers flexibility for low-skilled jobs – creating a working style that is easy to access and maintain, but one that leaves workers open to exploitation and a lack of financial security.
The Global Gig Economy
From a global perspective, issues with the gig economy usually revolve around workers’ pay, rights, and conditions. In some countries, outdated employment laws can be exploited by gig employers.
Essentially problems arise because the gig economy allows workers to be classified as ‘self-employed contractors’ rather than employees. While this gives freedom and flexibility to the worker, in some cases, this allows employers to avoid the responsibilities that come with hiring full-time employees. Responsibilities such as paying workers a minimum wage, as gig workers are paid per job rather than per hour, or avoiding employee benefits such as sick pay and holiday entitlement.
When hiring globally businesses should be wary of misclassifying workers or misunderstanding local employment laws. International laws on hiring contractors vary significantly from nation to nation. While countries like the USA allow the gig economy to flourish, other countries have significant barriers in place that make gig working difficult. Due to country-specific laws such as misclassification penalties or back taxes for independent contracts, hiring gig workers can quickly become an HR minefield in some corners of the world.
A challenge to the 9-5?
The gig economy is here to stay – with 42% of young people engaged in some kind of freelance work, and traditional job roles becoming ever more blurred by remote work, the gig business model may well replace the 9-5 as the accepted standard.
However, gig work is controversial amongst critics who query its dehumanising, exploitative effects. In Nomadland, the gig economy gives Fern an opportunity for survival and a sense of freedom where traditional capitalism has failed her – but we are left with questions about how she will survive the harsh winters, loneliness and ill health of old age.
In the brave new gig world, how do we incorporate fair payment, welfare and community, and minimise opportunities for exploitation? These questions must be answered if the gig economy is to become a worthy challenger to traditional work practices.