A growing number of workers in developed countries are working without the traditional employer-employee relationship in the so-called “gig economy” – also referred to as the sharing or on-demand economy. Over the past decade, techno-entrepreneurs have developed online platforms to connect customers and suppliers of a variety of tasks and services, not just car services (Uber) and rooms (Airbnb), which have spread quickly around the world. This new economy is disrupting not only existing industries but the whole concept of work. Tasks and services are being fragmented into bid-able gigs. Jobs are being replaced by on-demand gigs. Dependent workers are being treated as self-employed.
This new economy has generated heated debates about the need for government regulation. But more fundamentally necessary are new ways to provide health insurance and health care, worker benefits and protections, and pensions and retirement savings to the on-demand workforce. This challenge applies not only to gig workers but also to temporary, part-time, and contract workers of various kinds and to the low-end self-employed.
This is where the new economy meets the old. In developing countries, over half of all workers are informally employed without a traditional employer-employee relationship: as casual day labourers, non-standard employees, industrial outworkers, and own-account operators (self-employed who do not hire others). Indeed, half of the global workforce, both women and men, are self-employed: of which less than five per cent are employers or professionals.
In May 2016, US Senator Elizabeth Warren set out a framework to “rethink the basic bargain for workers”. She outlined four areas for action. First, all workers should be able to pay social security contributions, buy insurance against illness and disability, and accrue credits for paid leave. Second, health and pension benefits should belong to workers and follow them if their jobs or status in employment change. Third, existing labour laws should be streamlined to reflect the reality of work today and to stop employers from exploiting loopholes. Finally, all workers need collective bargaining.
This is a policy agenda that should apply equally well to the new and old economies in both the Global North and Global South. The rise of the new gig economy provides an opportunity to rethink how to provide all workers with basic protections. The rise of inequality should provide the political impetus to do so.
Top photo: Rattana Chalermchai works with her husband Mongkol at home. A former factory worker, Rattana was laid off during the economic crisis in 1997. She now supplies hand-made flip-flops to a resort. She and her husband are long-time members of HomeNet Thailand, and they have contributed to several policy campaigns for informal workers, including the Universal Healthcare Coverage Scheme. Photo: Paula Bronstein/Getty Images