Can We Talk About Sustainable Development In The Era Of Gig Economy? 

When I recently happen to ask a young acquaintance as to what the person is doing these days, the response was, “I am in between my gigs”. Well, perhaps these are the common words that we often hear today. Hence, thought of exploring more about the Gig Economy and its long-term impact on organisations and society. Let’s ponder upon a few questions to clear the cloud.

What is a gig economy? When did this trend start and under what conditions?
A gig economy is a free market system in which temporary positions are common and organizations hire independent workers for short-term commitments. Gig economy workers tend to include freelancers, independent contractors, project-based workers and temporary or part-time hires (Gillis, 2020). 

It was in the early 1900s, when the mankind was under the strain of the First World War, the consequent Great Depression and a period of sustained, long-term downturn in economic activity in more than one economy, that the word “gig” was introduced by jazz club musicians. The term was primarily used to describe a musical concert. These concerts were usually for short duration where the musicians performed and bowed out at the end of it. In the 1940s that is during and soon after the Second World War, the first temporary agency was opened providing businesses with typist and other clerically trained staff on a temporary basis. In the digital era, the concept of gig work started to take off primarily in the late 90s and early 2000s.Was it not around the global Y2K bubble? The Global Financial crisis between 2007 and 2009 supposedly pushed people into the gig economy, with the lack of choice and ability to work in traditional employment relationships (Brown, 2017). Similarly, during the coronavirus pandemic of 2020, the gig economy has experienced significant increases and many whose jobs have been made redundant during this time have turned to part-time and contract work for income.

Does this mean that the gig economy comes or becomes popular during/post crisis when the broader workforce is compelled to look for short-term or whatever opportunity it gets to fulfill the basic necessities of life? Is gig economy a contrarian to Maslow's law of basic human needs?

What are the components and roles in the gig economy?

The gig economy is made up of three main components: the independent workers paid by the gig (i.e., a task or a project); the consumers who need a specific service; and the companies that connect the worker to the consumer in a direct manner.

There are currently four broad types of roles that have been identified under the gig economy:
       # Higher skilled creative and IT tasks that can be performed from anywhere;
       # Low-level repetitive work that can be performed from anywhere;
       # Manual service work performed on the customers’premises and
       # Work that involves driving or delivering (Huws et al., 2016). 

A few key stats
It has been estimated that by 2021, gig workers will outnumber traditional employees. In the US alone, there were roughly 57 million in numbers, in 2020 (around 35% of the US workforce, up from between 14-20% in 2014), which is more than 1 in 3 workers who have engaged in some form of gig work (Wallace, 2019).

According to a recent research report, about 7% of working Australians are finding jobs through the gig economy by signing up to more than 100 digital platform to make a living. Most common cohorts in this segment being men aged 18- 34, students, temporary residents, people with disability and those who do not speak English at home. The state of NSW has the highest level of gig economy workers (7.9%), followed by Victoria (7.4%) (SBS, 2019).

Gig economy: Pros and Cons
One of the main advantages of gig work is flexibility. Most gigs are highly flexible and are seen as beneficial to both employers and gig workforce.  They can better choose when and how they work, while employers can choose to employ workforce on an as-needed basis with the capability to meet surge requirements with an extended workforce. (Dobson, 2017). It is often argued that gig work is preferable to being unemployed and it has provided opportunities to many who could not otherwise find regular work (Odgers, 2017). 

On the other hand, there are many disadvantages for both the employers and the gig workforce. For instance, during this ongoing pandemic phase, in Australia, industries like tourism and hospitality, which have been usually employing foreign workers/short-term visa holders as gig workforce were facing acute shortage of staff as the international borders were closed thereby warding off foreign workers, while catering to the flocking domestic tourists who could not go out of the country hence making a surge in the domestic tourism market (Harari, 2021).

A recent research confirms that gig economy workers are over-represented in more vulnerable sections of the Australian workforce – students, foreign workers, short-term visa holders, the formerly unemployed, and young age groups. As independent contractors, gig workers also have no employment rights under the Commonwealth Fair Work Act to legal minimum pay rates, sick leave, or unfair dismissal protections. They are worse off in accumulated superannuation at retirement compared to a minimum wage earner and only 1.5% of gig workers make personal super contributions, which are particularly small relative to comparable workers (Actuaries Institute, 2020).

A majority of the gig workforce also face difficulties with availing traditional banking services including line of credit or loans which are attributed to their unpredictable pay, lack of job benefits, steady schedules, insurance etc. Traditionally, banks use both earnings histories and credit reports to assess the risk of lending to individuals. Many gig workers lack the traditional income statements required to create such credit reporting and wouldn’t qualify for traditional loans. They most often find it difficult to establish a good credit score for themselves (Katabat, 2018). Does that not make them vulnerable to fall prey to alternate/illegitimate economy? Does that mean that the disadvantages of being in the gig economy outweighs its advantages? By it's sheer short-term characteristics, in a way it also dampens the genuine entrepreneur spirit which is demands long termism. 

What the gig workers say? 

​According to Mckinsey survey of the US & European market only 30% of the respondents prefer independent work as their primary income and the remaining 70% may be classified as either casual earners, financially strapped or those who are striving to make ends meet (Wallace, 2019).

Who benefits from the gig economy and what’s the way forward?
Plainly speaking, when businesses does good, economy and legitimate market prospers, labour market booms, GDP improves and healthy and sustainable development takes place for the entire society to benefit from. The opposite is equally true.

While flexibility and more short-term opportunity might be better that unemployment, or might be suitable during a certain stage of life like young and those exploring newer avenues, mothers getting back to work or during a transition phase, such situations might also lure alternate illegitimate economy to prosper where labour forces might be enticed, manipulated or forced to enter, thereby ignoring the long-term benefits of a steady job market and sustainable development of the society. Happiness of a gig worker therefore depends on whether it is a choice or compulsion. A strong social contract in this context is thus a requirement as well as proper well-defined regulation, before it is too late.

Reference
# Actuaries Institute (2020), The Rise of the Gig Economy and its Impact on the Australian Workforce, Available online at < https://www.actuaries.digital/2020/12/16/the-rise-of-the-gig-economy-and-its-impact-on-the-australian-workforce/>

# Brown, D. (2017), The Gig Economy: Are Millennials failing to develop important work skills?, Available online at <http://businessresearcher.sagepub.com>

# Dobson, B (2017), Gainful gigging Employment services for the platform economy, Available online at <http://www.reform.uk/>

# Harari, F (2021), Help Wanted, The Weekend Australian Magazine, 5-6 June, 2021

# Gillis, A (2020), Gig economy, Available online at <www.techtarget.com>