How Can Gig Economy Become Sustainable?

The growth in gig economy notwithstanding, there are several hurdles to its largescale adoption. Lack of regulation, zero benefits and absence of job security are some of the major challenges confronting this model. Other issues are payment delays and uncertainty about payment creating mental distress. For gig economy to become sustainable and get integrated with a country’s economy, it needs to be more structured.

Gig economy has gained popularity in the past few years as youngsters and job seekers gravitate toward it, lured by the flexibility it offers. It also serves as a second source of income for many. Another factor that has contributed to its growth is the development and wide-scale adoption of supporting technological infrastructure. While the model is widely accepted in developed countries, emerging nations too are beginning to embrace it, reflected in the inclination of a large section of their population. Since COVID-19, gig has provided succor to many from unemployment, serving as a source of income. According to a research report, around 200 million people across the globe are a part of the gig economy workforce today.

The immense growth in gig economy is attributed to the benefits it offers for both employers and employees. For employers, it provides access to cheap labor; for employees, the flexibility to choose projects, plan their schedules and be answerable only to themselves.

The sustainability of the model, however, is questionable. Its integration with the main economy looks difficult due to the challenges it faces. Some of the main allegations against gig economy are:

1. Exploitation of labor – Gig economy workers do not get the benefits a full-time employee is entitled to. Therefore, there are no health benefits, paid leaves, or pension. The company gets work done without incurring any extra cost on the workers. It can get away with paying the worker only a fraction of what it would have to otherwise pay to a full-time employee.
2. Job security – Gig workers are temporary and hired as per the project. There is no guarantee of getting regular work or assurance that they will be hired regularly. The workers are under constant pressure to look for projects and new work to receive regular pay.
3. Payment issue – Many gig workers face the problem of not being paid on time or at all. The payment structures are not well-defined for many of them, paving the way for exploitation by employers.
4. Regulatory framework – Many countries still lack a strict regulatory framework for monitoring the wellbeing of gig workers. There are no defined guidelines for companies. In certain industries, dangerous work is outsourced to gig workers, saving companies the cost of medical or life insurance.
5. Emotional state – Gig economy workers need personal discipline and resilience to get through. As jobs are temporary, the uncertainty can be harrowing. Furthermore, working independently or from remote locations can be a source of loneliness and push some to even depression. Lack of organizational support can also play havoc in the employee’s mind, affecting the quality of output.

Gig economy is ideal for young professionals who are still deciding which career to pursue and can, therefore, afford to try out different gigs.

Data shows gig jobs are on the rise globally. However, for gig economy to be sustainable, it needs to be given a structure by employers and law makers alike. Rules guaranteeing social protection to independent workers are required. Benefits such as medical insurance, safety at work, defined payment structure and job security, even if for a limited period, will go a long way in addressing the uncertainties associated with temporary employment. Only if the interests of gig economy workers are protected, will the model sustain and grow.