Gig Economy—Deepening the Asymmetrical Divide

Today, the fight for a developing nation is not to certify itself as a developed nation. Rather, it is to accommodate itself in the ambit of ‘gig economy’. The term ‘gig’ became popular during the financial crisis of 2008, which was also known as the Great Recession. This crisis which had largely hit the OECD countries was seen as so disastrous that the need to explore new business ventures and ideas became imperative in order to prevent occurrence of such conditions in the future.

During this time, there came a shift in the form of jobs and employments. There was a gradual change of preference from the permanent job structure to short-term business contracts. Viewed as an ostentatious digital transformation, its journey initially embarked in the U.S. which was the worst hit among all the other nations. Currently, the US is technologically advanced which provides a variety of work options to people so that the present workforce can choose a particular kind of work, in alignment with their choice and interest. This interestingly transforms the scenario completely, as instead of the employers choosing their employees it is a practice of the employees choosing his/her employers, thereby breaking away from the convention. This idea of short-term virtual contracts connects workers and companies through modern technology, thereby divesting employees of the necessity to be present at the workplace.

Independent management consultants and service-based providers provide benefits to both the workers and the companies they are working in. To the former, these provide no geographical limitations, allowing people from various countries to work in a country without restrictions. This ensures flexibility (in the number of working hours) and control and ownership over their professional lives. To the latter, these help in cost reduction as they don’t have to bear the burden of providing additional social assurances mandated by the rules designed for the company.

The current trend is quite interesting. Harvard Business Review reports that 150 million workers in North America and Western Europe are engaged as independent contractors. In U.S., 36% of the workforce is part of this economy. Today, in developed nations, there appears no distinction between the ‘economy’ and the ‘gig economy’, as the latter has swiftly merged into the former. Currently, the idea of gig economy more or less resonates with the idea of economy.

India is seen as a country with a large unemployed population. However, according to the UN labour report, it is observed that the unemployment rate is increasing. It increased from 17.8 million in 2017 to 18 million in 2018. Considering the demographics, it is not just working and the middle class individuals who are unable to find work, but also the economically and socially marginalized individuals who are demanding a place in this competitive world. However, their concerns are not the same in entirety. Apart from work, they also want a fair and non-discriminated environment, where they are accepted and employed according to their ‘merit’ and ‘skills’ and not according to the caste. The Scheduled Castes (SCs) have the highest unemployment rate in India since the 1990s. This difference between the SCs and the upper section individuals, with regard to the employment, is due to a difference in the level of skills and education. Even when the SCs and the upper caste individuals have same level of knowledge and experience and are equally qualified, SCs stand a 67% less chance of receiving an interview call as compared to those belonging to the higher castes (A study given by Thorat and Attewell).

It is seen that India’s economy is primarily based on the informal sector and the rate of employment is not in pace with the overall growth. In such a scenario, one may ask how India plans to accommodate the demands of the population in this new economy. In a scenario where certain sections of the population are jobless, partly because of the demographical heterogeneity and partly because of discrimination, it is imperative to ask whether this growing population will get an equitable share of wealth, even if the economy prospers.

Therefore, gig economy is a reflection of making the rich richer and the poor poorer. By facilitating employment in the digital world, one may restrict the poor and the marginalized sections to carve out a niche for themselves. This in turn can leave these sections (which actually demand utmost attention) completely neglected in terms of providing a basic livelihood. Undeniably, gig economy can elevate the position of developing nations but only at the cost of deepening this entrenched asymmetrical structure between the rich and the poor, which will restrict the poor in the informal sector leaving the rich to bear the fruits of such system.

It is also important that the demand and supply for the kind of jobs falling under this economy intersect with the idea of sustenance. People who are willing to be a part of the traditional economy setup are seen as reluctant to take up jobs like consulting, counseling, branding, translations and artificial intelligence. One of the major reasons for this is that, most people are against the idea of risk taking which makes them willing to continue with their incumbent jobs which are rather secure. Reviewing the supply side, one finds that in a scenario where basic employment and sustenance is becoming a distant dream, providing such diversified innovations in the entrepreneurial sector will never help.

If a country like India wants to secure a place in this world of nations through gig economy, first, it has to ensure that all sections of the society are at ‘least employed’ with a possibility of advancement. It is only after this, that such a celebration of the economic growth is shared by every citizen of the country, allowing everyone to reap benefits.

Picture Courtesy- Safety+Health Magazine

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