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Editorial of the Day: Making the ‘gig’ Work (Businessline)

Exam View: Benefits of Gig Economy, Labour Code for Gig Economy, challenges related to Gig Economy.

Context: As manufacturing sector jobs continue to fall, an unusual beacon of hope where jobs are rising is gig work.

  • A Gig economy is a free market system in which temporary positions are common and organizations contract with independent workers for short-term engagements.
  • Gig workers can be broadly classified into platform and non-platform-based workers.
    • Platform workers: These workers are those whose work is based on online software apps or digital platforms such as food aggregator platforms Zomato, Swiggy, Ola, and others.
    • Non-platform workers: These workers are generally casual wage and own-account workers in conventional sectors engaged part-time or full-time.
  • According to the recently released report by NITI Aayog, the gig economy employs approximately 7.7 million workers, with the number expected to rise to 23.5 million by 2029-30, comprising around 4 per cent of overall livelihood in the country.
  • The report notes that gig work holds enormous potential for job creation and can work as a catalyst for occupational mobility.

Benefits Of Gig Economy

Benefits Of Gig Economy
Benefits Of Gig Economy

Labour Code For Gig Economy

The Code on Wages, 2019, provides for universal minimum wage and floor wage across organised and unorganised sectors, including gig workers. The Code on Social Security, 2020, recognises gig workers as a new occupational category and defines gig workers as a person who performs work or participates in work arrangements and earns from such activities outside of the traditional employer-employee relationship.

Issues Related to The Security Code

  • No guarantee of benefits: The platform workers are not necessarily getting benefits like maternity benefits, life and disability cover, old age protection, provident fund, and employment injury benefits, though they are eligible for availing these benefits.
  • No Fixed Responsibility: The Code states the provision of basic welfare measures as a joint responsibility of the Central government, platform aggregators, and workers. However, it does not state which stakeholder is responsible for delivering what quantum of welfare.

Challenges Related to Gig Economy

  • Issues of Security and employee benefits: since activities of gig workers fall outside the realm of the traditional employer-employee relationship, labour rights such as employee benefits and traditional forms of security are largely absent.
  • Few ways of Transitioning to better jobs: Many gig workers working in low-skill jobs never save and find few ways of transitioning to better jobs.
    • Currently, about 31 per cent of gig work is in low-skilled jobs such as cab driving and food delivery, 47 per cent in medium-skilled jobs such as plumbing and beauty services, and 22 per cent in high-skilled jobs such as graphic design and tutoring.
  • Job and income insecurity: Gig workers often are not employees and hence do not receive income security and social protection. The contractual relationship between the platform owner and gig worker denies the latter access to many workplace entitlements.
  • Lack of accessibility: This is a new concept and is confined to urban areas only. The rural areas lack access to electricity and the internet.
  • No scope of growth: Employees are hired for a short period or for a particular task. This means there is very little or almost no hope for upward mobility within the company.
  • Work pressure: workers may be under pressure due to algorithmic management practices and performance evaluation on the basis of ratings.

Way Forward

  • Develop solutions for each category of worker: it is important to clarify who the gig worker is; how they are different from unorganised workers and the self-employed; and to then design solutions for each category of worker separately.
  • Protection of workers’ interests: In designing policies, the government will need to balance the flexibility afforded by gig work to employers, with the protection of workers’ interests.
  • The government to partner with gig employers: to increase access to state services for their workers and encourage employers to provide complementary benefits to those provided by the state.
  • Developing skills and gaining access to global markets: The government should invest in systematically increasing exports in high-skill gig work such as in the education, financial advisory, legal, medicine or customer management sectors; by making it easier for Indian gig workers to access global markets.
  • Free trade agreement: creating pathways for education and certification acquired in India to be recognised globally, such as through FTAs. Britain is sensitive to rising immigration but also faces a labour shortage.
  • Partnership between the state and private sector: For gig work to provide a sustainable means of employment, ensuring stronger social security in partnership between the state and private sector and creating a bigger market for high-skill work can be important channels.
  • Women in the gig economy: Companies carry out gender sensitisation and accessibility awareness programmes for workers and their families, particularly to promote the rights of women and persons with disabilities.

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what is Gig economy?

A Gig economy is a free market system in which temporary positions are common and organizations contract with independent workers for short-term engagements.

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