ICTC Overviews summarize findings from full-length studies. To read the original report, visit it here.
This study explores the implications of the growth in remote work and the post-COVID gig and sharing economies.
Loading: The Future of Work defines and discusses key concepts in this labour market transformation and the opportunities and challenges for creating a resilient and inclusive economy.
It also looks at key regulatory considerations for the gig economy.
Gig work expanded following the 2008 financial market crash, when people turned to online platforms like askRabbit to fill income gaps.
In 2020, the spread of COVID-19 has been dubbed the world’s “first mass experiment in remote work.”
More than 40% of the Canadian workforce was employed on a non-permanent basis in 2017. The rise of new digital platforms is accelerating self-employment and temporary work.
Gig Economy: informal paid work enabled by online platforms (eg. Freelancer.com, Upwork, TaskRabbit, Amazon Mechanical, Fiverr, etc.)
Gig Worker: all workers regardless of sector, working on short-term contracts, including independent agents and contractors
Sharing Economy: all economic activity based temporary use of a product or service, utilizing digital platforms (eg. Uber, Airbnb, DogVacay, Turo, JustPark, etc.)
Photo by Simon Abrams on Unsplash
From March to May 2020, COVID-19 lockdowns reduced overall employment in Canada by 3 million.
Work shifted to online. In the US, on March 30, 2020, over 62% of US workers were working remotely compared just over 30% in 2015.
A PwC survey of over 850 CFOs in 24 countries found that productivity levels remained relatively stable from March to May 2020.
The gig economy opens new economic opportunities for people of various ages, skills levels, lifestyles, and regions.
COVID-19 is dampening the demand for sharing-economy services, whereas highly skilled contractors with in-demand digital skills are able dictate prices and pick jobs. “Essential” gig workers face increasingly precarious conditions.
Economic volatility and the growing participation of a younger workforce have spurred a shift away from long-term work relationships. Digital platforms are accelerating self-employment and temporary work.
According to a Doteveryone, the gig economy suffers from significant shortcomings, including a lack of financial security for workers, a loss of dignity at work, and the inability to progress in a career.
Digital platforms can also immensely benefit gig workers with in-demand digital skills.
According to UpWork, most of the top-ranking skills on the platform in 2019 were digital. Demand for some skillsets rose by 400% year-over year.
Flexibility is a key driver for gig economy participation. A survey of BC gig economy workers found 70% ranked flexibility over earning more money through full-time work.
Flexibility is also valued by younger workers in full-time jobs. Deloitte’s 2019 Millennial Survey found most people look to the gig economy for supplemental employment, not full-time employment.
Gig economy participants are mostly young workers, but increasingly gig work is a viable option for aging workers and those re-entering the workforce after time off.
Millennials and Gen Zs share similar views on the gig economy.
Gig work often provides no employment benefits for full-time workers:
This lack of retirement planning has significant consequences for state-sponsored healthcare systems, household debt levels, and gig worker retirement capabilities.
Rapid expansion of the sharing economy in Canada raises the questions of equity and fairness:
A 2019 study found nearly 40% of US families with household incomes of $100,000+ used sharing-economy services, compared with less 20% of families with household incomes below $50,000.
Online gig work and the sharing economy spurs global competition from lower-cost jurisdictions. In 2019, for example, India topped the list of global outsource locations for software development.
The top reason for outsourcing services is to reduce costs.
India shows the highest levels of gig participation in software development, gig work of various kinds is increasingly common globally.
Research suggests global opportunities favour high-skilled and high-demand professionals, however, professions capable of being outsourced will see downward pressure on wages as a result of the booming international market for professional services.
Appropriate regulation of digital platforms in Canada and for Canadian gig workers will be critical for the growth and development of the gig economy.
Regulatory efforts should align with international efforts and strive to understand the following:
Notable strides in regulation of the gig economy have been made in California and the European Union.
Currently Canada’s Employment Standards Act (governing statuary benefits such as a minimum wage, overtime pay, parental leave, severance pay, employment insurance, etc.) do not extend to independent contractors. Since most gig or sharing-economy platforms hire independent contractors, there is mounting pressure to address the shortfall in employment safeguards.
No global body or organization currently represents, addresses, or identifies the concerns or needs of gig workers.
Gig workers in various jurisdictions have sought to unionize, with varying success.
Other Canadian gig workers are also seeking better representation as a collective.
As work structures continue to evolve, gig workers and employers across jurisdictions will need to adapt to complex new realities.
ICTC Overviews summarize findings from full-length studies. To read the original report, visit it here.
Tagged with: Gig Economy Future of Work Remote Work Sharing Economy