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Sansad TV: Perspective- Gig Economy

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Introduction:

A major shift in the employment trends has been the rise of gig economy globally. Gig economy is a free market system in which organisations hire or contract workers for a short span of time. According to a report by Boston Consulting Group, India’s gig workforce comprises 15 million workers employed across industries such as software, shared services and professional services. An estimated 56% of new employment in India is being generated by the gig economy companies across both the blue-collar and white-collar workforce. Another study indicates that Gig economy is gaining a foothold in Tier 2 and Tier 3 markets. According to the Code on Social Security, 2020, “A gig worker is a person who performs work or participates in work arrangements and earns from such activities, outside of the traditional employer-employee relationship.”

Issues faced by gig economy workers

  • A gig economy is a free market system in which temporary positions are common and organizations contract with independent workers for short-term engagements.
  • This workforce has limited employment rights like minimum wages, health benefits, sick leaves or even retirement benefits to fall back on.
  • Also, the payment is assured only on the completion of the project giving a sense of financial insecurity.
  • The lack of any kind of protection was also deterring several talented workers against participating in the economy
  • No stable and secure employment: These so-called jobs do not provide health insurance, nor pay for overtime with no sick leave.
  • Lack of income security: There is no room for wage negotiations, and unions are absent. In the gig economy, job creation should be seen as the provision of livelihoods for entrepreneurs.
  • Grievance redressal mechanism: For instance, when Ola and Uber started cutting back incentives, the drivers in Mumbai decided to go on ‘strike’.
    • But there was no clarity against whom they were striking. When the strikers agitated at a local transport commissioner’s office, he had to tell them that he did not regulate the hail-a-taxi business.
  • The Central government recently passed the social security code which could cover gig worker as well.
  • One of the key proposals includes the creation of a social security fund which is around 1 per cent of the aggregators’ annual turnover.
  • This fund would be used primarily for the welfare of the unorganized and the gig workforce 

Regulation:

  • This sector observes lot of skill gaps.
  • Constant upskilling and reskilling is required for such talents to stay industry relevant and market ready.
  • A categorical clarification could ensure that social security measures are provided to workers without compromising the touted qualities of platform work.
  • Countries must come together to set up a platform to extend their labour protection to the workforce who are working part-time in their country.
  • Companies employing the workforce on a temporary basis should also be made responsible to contribute to their insurance and social obligation other than just their tax commitment.
  • There is a need for a socio-legal acknowledgement of the heterogeneity of work in the gig economy, and the ascription of joint accountability to the State and platform companies for the delivery of social services.
  • In the Code on Social Security, 2020, platform workers are now eligible for benefits. Actualising these benefits will depend on the political will at the Central and State government-levels and how unions elicit political support.

Way forward

  • Constant upskilling and reskilling is required for such talents to stay industry relevant and market ready.
  • The government needs to come out with some more regulations to protect the workforce of the gig economy.
  • Also, at present, there is no mechanism to address the issue of redress of disputes.
  • It could also mean countries coming together to set up a platform to extend their labour protection to the workforce who are working part-time in their country.
  • Companies employing the workforce on a temporary basis should also be made responsible to contribute to their insurance and social obligation other than just their tax commitment.

Conclusion

  • The scope of the gig economy in a country like India is enormous. The government needs to come out with a comprehensive legislation to empower and motivate many to take this path.
  • The gig economy and its workforce cannot be overlooked when we talk about the future of employment.
  • With a population of over 1.3 billion, and a majority of them below the age of 35, relying on the “gig economy” is perhaps the only way to create employment for a large semi-skilled and unskilled workforce.
  • Therefore, it is important to hand-hold this sector and help it grow. We need policies and processes that give clarity to the way the sector should function.