Gig Economy

The potential pitfalls of being employed in gig-economy jobs

Often touted as the future of work, gig-economy is displacing conventional work culture at an alarming speed.

The potential pitfalls of being employed in gig-economy jobs

According to the US Bureau of Labor Statistics, a ‘gig’ is described as “a single project or task for which a worker is hired, often through a digital marketplace, to work on demand”.

Flexible work hours, better autonomy, and an improved work-life balance could be some of the highlights of gig-based jobs. Alternatively, there are several drawbacks of working in a sector that involves hopping from one gig to another.

Experts who have studied the gig-economy have pointed how the trend also allowed for some exploitative business practices to thrive. Lower pay, extended work hours, and zero benefits to name a few.

Often these manipulative measures are advertised to millennials as innovative and self-sufficient means ‘to be their own boss’. Here, we take a look at some of the most obvious pitfalls of working in gig-based employment.

Inferior pay

Standard salaries are often an outdated luxury in gig-economy jobs. Especially so, if one engages in blue-collar jobs such as taxi-drivers, delivery agents and care-givers.

According to research done by the JPMorgan Chase Institute, the average monthly income of transportation workers in the American gig economy fell by 53 per cent between 2013 and 2017.

JPMorgan Chase Institute examined payments from 128 online platforms and checked accounts of 2.3 million distinct users for their research. Their findings indicate that majority of Americans who depend on the ‘online platform economy’ for their income, are engaged in a sporadic fashion. Some of these employees are active for just three months or less than a year.

No perks, benefits, and entitlements

Under the garb of offering more flexibility and freedom, the gig-economy has also created chaotic and precarious work environments. Such settings are difficult to monitor and lack minimum safety and security.

Ideally gig-economy jobs lack conventional work-related perks such as pay hikes, promotions, etc. They are devoid of employee benefits such as health insurance cover and pensions. Even simple entitlements such as sick leaves and holidays are missing.

Employers who hire talent on a gig-basis have frequently jumped the gun in providing for basic employee welfare. This also includes ensuring minimum wage payment. Digital platforms like Uber were quick to distance themselves from their compensation-seeking employees who they conveniently termed as ‘independent contractors’.

Gig-economy jobs widening gender pay gap

According to a Stanford paper, female Uber drivers earned 7 per cent less per hour as compared to their male counterparts.

The research titled “Gender Earnings Gap in the Gig Economy: Evidence From Over a Million Rideshare Drivers” examined data from more than 1.8 million drivers in US between 2015 and 2017.

Gig-economy jobs are level playing fields for women returning to work or those looking to balance home and career. In this context, gender pay gaps in the sharing economy jobs seems startling to say the least.

Relative autonomy of choice

Industry experts critical of the gig culture have also noted how gig employees, sometimes classified as independent contractors, have little autonomy. For example, taxi aggregators like Uber do not allow their drivers to call the shots on regular rate cuts.

Gig-jobs have greater freedom of choice. However, it mostly applies to white collar jobs that pay relatively well.

On the bright side, gig economy jobs have increased the wages for those working in the hospitality industry by 69 per cent. It has also created more sudden ad short-term opportunities for people with hot-skills in the IT industry.

However, gig-based jobs do come with their fair-share of risks including zero job guarantee. Hence, millennials must critically evaluate how these new-age gig jobs suit their priorities before signing up for them.

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