The gig economy

Published September 8, 2019
The writer is a development practitioner.
The writer is a development practitioner.

RECENTLY, Forbes published an article naming Pakistan the fourth fastest-growing freelance market in the world, with a 47 per cent growth in freelance earnings. While this is seen by some as a glimmer of hope in the midst of serious economic uncertainty, a deeper look into the ‘gig economy’ and the nature of freelance work reveals reasons for concern.

When considering human history, we generally believe it to be a story of progress. We evolved from our ape-like ancestors to cavemen and hunter-gatherers to today’s advanced beings via the agricultural, industrial and digital revolutions. Author Jared Diamond brings this perspective into question, describing the agricultural revolution as “a catastrophe from which we have never recovered”, partly due to the evolution of work during this time.

Our hunter-gatherer ancestors spent a few hours each day hunting and foraging and had plenty of leisure time. Then came the agricultural revolution, offering a life of back-breaking labour from sunrise till sundown. Contrary to the belief that it allowed free time for pursuits such as art and philosophy, it increased working hours for most.

The ‘future’ of jobs comes with many costs.

It is possible that this great mistake in our evolution was not an anomaly. The industrial revolution worsened conditions for many workers, and examining how work has evolved in the digital age reaffirms the idea that progress does not always improve lives. The changing nature of work is emblematic of how the dividends from technological progress have not been distributed equally.

The development of artificial intelligence has given rise to a growing panic around unemployment. The WEF’s The Future of Jobs Report predicts that, by 2022, 54pc of all employees will require significant re-skilling as they will no longer possess the skills employers demand.

As workers lose their jobs, technology capitalists amass more wealth, not least through the gig economy — a system where companies rely on independent contractors and freelancers, rather than on permanent staff. The development of digital technology has enabled the expansion of gig work into new industries, including services such as ride-hailing and food delivery, as well as companies that outsource tasks such as programming.

This model is praised and preached in business schools: profit is maximised by minimising labour costs and shifting business risks on to employees. Minimum wage is not guaranteed and, with minimal permanent staff, companies can easily scale down operations when needed. By categorising themselves as technology ‘platforms’ or ‘intermediaries’ and their workers as ‘independent’ or ‘freelance’, employers are able to withhold basic labour rights such as secure employment, paid maternity leave, health insurance and safe work conditions.

The Forbes article also states that many freelancers in Pakistan are under the age of 30. A recent report in Dawn found that 16.2pc of those with bachelor’s degrees in Pakistan are unemployed. This may suggest that a lack of gainful and full-time employment is forcing people to turn to freelance work to fill the gap.

There are some positives. In a country where unemployment is soaring, freelancing is a last resort: any job is better than no job, even if it means sacrificing a living wage and job security. Gig work also allows flexibility to work anytime and anywhere. For this reason, it has been seen as a boon for women who are unable to manage full-time work outside their homes.

On the flip side, workers are insecure and disenfranchised, at the mercy of algorithms, deprived of basic benefits and often forced to work several ‘gigs’ to piece together a living income. Studies also show that the gender pay gap persists in freelance markets.

Celebrating this as a viable alternative for women (rather than trying harder to make all workplaces gender sensitive) promotes a system where women are excluded from high-paying jobs and leadership positions, and also ensures that they continue to compromise their careers for unpaid domestic labour.

With the growing footprint of the gig economy, schemes such as DigiSkills have been launched by the IT ministry to enable workers to enter this market. As the government encourages more young graduates to turn to freelancing, it must also consider the insecurity of such work.

Given how the digital revolution is changing work, we must proactively ensure that the change is a positive one for everyone. One way to do so is through a jobs guarantee scheme, making full-time employment at a living wage available to all.

A more feasible, short-term goal is to strengthen regulation to protect workers’ rights and restore the balance of power between organisations and employees. This would entail reclassifying ‘platforms’ and technology companies as employers, and long-term gig workers as employees, with the right to minimum wage, benefits and safe work conditions.

The writer is a development practitioner.

Published in Dawn, September 8th, 2019


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