- Intro on gig economy.
- Very briefly define gig economy.
- Mention the potential of gig economy & gig employment.
- Reasons for gig’s growing popularity.
- Highlight the safety net issue.
India is experiencing a systematic shift in its work culture. With young people not willing to get stuck in long hours-minimal pay jobs, they are finding sustainable employment opportunities in the rapidly growing gig economy. Some more aspirational are turning micro-entrepreneurs.
India has a large reserve of informal gig workers. As per ASSOCHAM, there are 15 million freelance or gig workers across India. Fuelled by the pandemic-related job losses, the gig economy has emerged in the primary focus. It is estimated that gig economy can service up to 90 million jobs in India’s non-farm economy alone. This translates to over $250 billion in volume of work and thus contribute an incremental 1.25% to India’s GDP.
What is the gig economy ?: it includes all platforms that hire independent workers across sectors like e-commerce, technology, food & beverages, etc.
Potential of gig employment: the growth of social commerce has affected the employment opportunities for millions of gig workers. A 2019 World Bank report pointed that digital platforms scale up faster and at lower cost than traditional companies. In India, the penetration of online retail is expected to reach 10.7% by 2024. With the presence of large online platforms, India has become one of the largest economies for flexi-staffing in the world. So, gig jobs have simplified the employment landscape in the country, changing for the better.
Why gig is better ?: unlike regular office jobs, gig jobs offer a higher earning potential because compensation is linked to order requests completed. This gives scope to workers to plan their finances well. By upgrading or augmenting skills, and equipping modern tools for better efficiency, they can earn more, some even becoming micro-entrepreneurs. Gig also works better for women. With household duties, regular jobs often become hard to manage for women. Gig jobs offers flexible hours that has contributed to increasing number of women joining the workforce. According to the Economic Survey, the labor force participation of women b/w 15 – 59 years grew to 26.5% (2018-19) from 25.3% (2017-18). E.g., Zomato aims to increase female presence in delivery fleet to 10%; Urban Company has women workers across service roles.
The safety net debate: it has been debated about the lack of essential work benefits within this economy. The Code on Social Security 2020, once implemented, will give protection needed by gig workers. They will be eligible for social security benefits under unorganized worker category, which includes health & insurance benefits. Additionally, a contribution of 1-5% of aggregator’s turnover will be payable to them. A Social Security Fund will be established to hedge against death and disability & also old-age benefits. Many individual platforms have taken steps to provide necessary benefits to their workers.
The BCG-Dell foundation noted that in the near-medium term, nearly 24 million jobs could migrate to technology based gig platforms. It also predicts creation of 1 million new jobs over the next 2-3 years by aligning the needs of employers & workers. As India moves towards its goal of becoming a $5 trillion economy by 2025, the gig economy will be a major building block in inclusively achieving the goal, bridging the income & unemployment gap. The full potential of the gig economy can only be realized by working within a framework of suitable legislation and public policies that allow market to flourish.