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Gig economy

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It was heralded as a game changer in employment. It was supposed to usher in a new labour market for short-term contracts and freelance assignments. Working exclusively for one company was predicted to decline as jobseekers picked up a collection of “gigs” with several companies.

Despite the hype, the gig economy has not radically transformed employment. We don’t have an army of free agents who actively choose autonomous work. The availability of gig work from app-based platforms – a driver for Uber, a freelancer for Airtasker or a host for Airbnb – has not lured myriad workers to flexible gig careers.

Traditional permanent employment is still the preferred model for work and is not in retreat. Few people have abandoned the standard 9 to 5 work-week in favour of working independently on a task-by-task basis for various employers. Most workers continue to value the security of a full-time job.

The debate about the online platform (or gig) economy has played out in the absence of solid data. But now the statistics are in and they show that work on-demand is not the new normal. According to Australian labour economist, David Peetz, casualisation and self-employment rates are not increasing.

Peetz is Professor of Employment Relations, Centre for Work, Organisation and Wellbeing at Griffith University. He was deputy head of the industrial relations department under the Keating government and has been a consultant for the International Labour Organisation.

In a conference paper that Professor Peetz delivered recently, he analysed ABS stats and found that self-employment is falling, full-time employment is rising and the share of casuals in the workforce has shifted little in a decade, after growing substantially earlier.

Professor Peetz said that there was no evidence to back claims that the rate of casual employment was increasing, saying casualisation had, “pretty much stabilised over the past decade”. He rebutted the popular notion that workers were going from job-to-job to pursue “boundary-less careers”.

He noted that “the death of employment is an international myth without international substance”. ABS data reveals that independent contractors, which is how gig workers are classified, have not changed as a proportion of the workforce since 2012.

Another academic, Dr Josh Healy, senior research fellow at the University of Melbourne’s Centre for Workplace Leadership, also believes that the growth of the gig economy has been exaggerated. He says that “the evidence so far is a bit contrary to the hype we hear. If we take a step back and look at the data, it is still a very small sliver of the workforce”.

Dr Healy points out that the Grattan Institute estimates that less than 0.5 per cent of adult Australians work on peer-to-peer platforms, like Uber or Deliveroo, more than once a month, and US data from 2015 suggests that just 0.4 per cent of Americans did paid work on a platform.

Recently, the Sydney Morning Herald ran a story titled: The gig economy is a myth, survey finds. The article went on to say:

A survey of 17,000 Australians over almost two decades has found “there is no evidence of any growth in the use of independent workers in Australia,” despite widespread fears of companies such as Uber and AirTasker flipping a century-old industrial relations model. The findings of the Melbourne Institute's Household, Income and Labour Dynamics in Australia research … show the rates of self employment have been in marked decline since the survey began in 2001, levelling out at 8.5 per cent in 2016.

For something so small, the gig economy makes a lot of noise even though few people are opting for this kind of work. That people are not flocking to take up more insecure and short-term jobs is not a surprise. Gig workers have few protections - many are exploited as they have no legal rights to minimum pay and safe working conditions.

In August, the city of New York legislated to require a minimum pay rate for rideshare drivers – the result of a two-year campaign by the Independent Drivers Guild. Two University of Technology Sydney academics have suggested that the mobilisation of drivers in New York could foreshadow what’s to come in Australia. An estimated 15,000 Australian Uber drivers disconnected from Uber recently to protest against company policies, including low commissions.

Logging on to an app when you feel like working may sound appealing, but it does not guarantee a regular income. The gig economy is unstable as temporary work arrangements invariably result in inconsistent employment. Most gig applications like Uber rely solely on user demand. So, if there is no demand for a ride, there is no work for you as a driver.

I remain confident that the work of tomorrow will largely consist of jobs and not gigs. Regular jobs will not become a thing of the past, which just goes to prove that the more things change, the more they stay the same.

Regards,
Paul J. Thomas, CEO

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CEO Paul Thomas