The Gig Economy

"But as the new economy begins to replace traditional services, there is an opportunity to shape this discussion to look at re-aligning workers and businesses, rather than pushing them further apart. Finding new and positive ways to strengthen an individual’s bond with work is the most challenging question to be answered in an increasingly casual and agile economy."

A spate of rulings over the last few months has begun the process of legally acknowledging those working in certain areas of the Gig Economy as workers, and not as self employed contractors. The growing precedent marks an important shift for some, offering hope that they will no longer be denied the right to the minimum wage, breaks and holiday pay. 

The labelling of workers as self-employed is an innovation prevalent among major online on demand services such as Deliveroo, Uber and Yodel. It enables companies to reduce their operational costs by engaging independent contractors on a short-term basis. The selling points for prospective workers are that they receive the benefits traditionally associated with self-employment; flexibility and good pay. However, depending on the market power of workers in any given industry, the technique can lead to a situation where a company’s circumvention of employer-employee obligations is deeply unfair. 

In recent years many delivery rates have lowered, putting workers in the gig economy at risk of taking home as little as £2 an hour; well below the national minimum wage. If we take this in conjunction with the legitimacy of immediate dismissal without appeal and severe hour reductions; an enormous pressure can come to be placed on an individual worker to perform for less than minimum wage. With reports of bullying and intense stress appearing within the gig economy, comparisons have been drawn between it and the ‘sweated labour’[1] of the Victorian era and serves to demonstrate the need for vigilance on employment rights.

 Of course, innovations in the new economy are often positive; with the technology platforms at the core of Uber and Deliveroo offering the potential to connect and enable working relationships more quickly and more easily than ever. Indeed, with technology so ubiquitous in our de-industrialised society, the significant numbers of under-employed and unemployed individuals being connected to the job market through these new technologies present an incredible opportunity for new forms of employment. However, there is a need to acknowledge that the face of the economy and of employment is changing; it has moved parts of our professional life from the office and the factory floor and onto phones and laptops. Such a change, although removing the trappings of traditional employment, doesn’t alter the underlying market processes that – if left unchecked – can come to place a strain on human dignity and long established employment rights.

 Although the new economy poses a unique challenge to employees and workers, its innovations present new opportunities for employment and industry. This is a small part of the changing landscape of the modern British economy, and the relevance of the articulating the need to protect the most unfortunate in society against economic insecurity is self evident. But as the new economy begins to replace traditional services, there is an opportunity to shape this discussion to look at re-aligning workers and businesses, rather than pushing them further apart. Finding new and positive ways to strengthen an individual’s bond with work is the most challenging question to be answered in an increasingly casual and agile economy.

Adam Fazackerley is a Young Fabians member
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