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How Technology Has Created the Digital Gig Economy

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It used to be that employees were expected to show up at a certain time and leave at a certain time. They earned an hourly wage or a salary. Usually, they also had a set number of hours a week they were expected to work, regardless of whether their place of employment was busy or not. Technology has changed the nature of their work, and made way for the development of the gig economy.

The Gig Economy

The gig economy isn’t about employees. It’s about independent workers. They’re typically freelancers or contractors. They get no benefits and sometimes, they work a lot. If a company they usually do work for has no work for them, they don’t work. Gig workers work from job to job and get to work within a wide range of career areas. Though it may seem like a lot, all of this is possible because of technology.

The Modern Workforce

Technology has made the workforce digital, and jobs are changing to compensate. People who work as gig workers often don’t work at a company’s site and instead work at home, in coffee shops, and other places. They communicate with potential employers mostly via email. These workers find potential gigs on job boards or through their networking efforts. If they don’t want to take on a gig job for whatever reason, they’re not required to.

The Ramifications

People who work as gig workers have more flexibility. Technology allows many of them to work anywhere that they have an Internet connection. If they’ve managed their business resources correctly, they don’t have to work for companies or people they don’t care for. Many giggers also find that this type of employment may allow easier entry into a career opportunities they want. They just need to take on a short-term project or two to build the experience section on their resumes. However, many giggers find income inconsistent. They also deal with company bosses who still want to treat them as employees instead of independent business owners, which can create conflict and, in some cases, legal issues. Companies who hire gig workers must be very careful of the demands they place on these workers. Otherwise, these workers could be seen as employees, making them eligible for all the rights and benefits of being an employee.

Technology has changed pretty much every aspect of a business, opening up work opportunities for those who want to work in the gig economy. This change has also helped employers increase profitability because they only have to only hire workers when they need them. However, this job trend has some downsides, too, which both employer and worker need to consider before participating in the gig economy.

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Workers

Target is giving frontline workers $70 million in bonuses — but their growing gig workforce say they just got hit with a major pay cut

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  • Target just gave 350,000 frontline workers $70 million in bonuses.
  • The company announced the bonus Monday, the same day some of its Shipt gig workforce protested outside Target headquarters in Minneapolis calling for fairer pay.
  • Willy Solis, a lead organizer with the nonprofit Gig Workers Collective, said gig Shoppers were a part of why Target was able to enjoy 273% annual growth in same-day service sales — including curbside pick up, drive up, and Shipt.
  • If you are a Shipt Shopper and would like to share your story, email aakhtar@businessinsider.com.

Target announced Monday that it would offer more than 350,000 frontline employees a $200 bonus each, or $70 million in total.

Target previously gave all hourly full-time and part-time store and distribution center workers $200 bonuses in July. Eligible employees include hourly members in stores and distribution centers, seasonal hires, and hourly team members who “support Target’s guest and team member contact centers.”

Meanwhile, some gig workers for Target-owned delivery service Shipt held a demonstration Monday outside of the company’s headquarters in Minneapolis protesting a new pay model.
Pay for Shipt workers, called Shoppers, is now determined using an algorithm rather than a flat rate, the company confirmed to Business Insider. Shipt classifies Shoppers as independent contractors who are not eligible for employee benefits, including minimum wage or healthcare.

Read more: Leaked Target memo reveals how the retailer is trying to obliterate germs in its stores by wiping down everything from ATMs and handcuffs to Bullseye, the company’s mascot

Some Shoppers have said the algorithmic pay model has lead to lower wages. Molly Snyder, the chief communications officer for Shipt, said Shoppers make $21 per shop including base pay, promo pay, and tips, which did not change on average during the new pay model, but some workers may have seen a decline in pay. Snyder also said there were more Shoppers for Shipt “than ever before” last weekend.

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One study, conducted by Coworker.org and an MIT PhD student, found the new pay model resulted in lower pay for 41% of Shoppers, and the number of people earning less is growing.

Willy Solis, a Shipt Shopper and a lead organizer with the grassroots organization Gig Workers Collective, said it felt insulting that Target give bonuses at the same time Shipt Shoppers are calling for fairer pay. Solis said Shoppers were a part of why Target was able to enjoy 273% annual growth in same-day service sales — including curbside pick up, drive up, and Shipt.
“We’re grateful and happy for Target employees to be recognized and for receiving that extra pay, but at the end of the day, we as Shipt shoppers have contributed significantly to make Target a very profitable company,” said Willy Solis, a Shipt Shopper and a lead organizer with the grassroots organization Gig Workers Collective.

Read more: Target just blew the doors off its first quarter earnings. Target CEO Brian Cornell says it was due to these two key factors.

Target bought Shipt in 2017 for $550 million to compete with Amazon and Walmart on same-day delivery. Target is currently valued at $82.5 billion.

If you are a Shipt Shopper and would like to share your story, email aakhtar@businessinsider.com.

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More Than One-Third Of Claims For Gig Workers, Self-Employed Unpaid – CBS Chicago

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TOM PURCELL: The fate of gig workers could turn on ballot question | Opinion

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Become an employee with full paid benefits, or remain a mostly independent gig worker? That debate’s raging in California as November’s general election approaches, and its outcome is likely to affect the entire country.

According to The Washington Post, “Uber, DoorDash and other gig economy companies are bombarding TV airwaves, social media and even their own apps with ads and marketing materials promoting a ballot initiative [Proposition 22] that they say would improve drivers’ financial situation and working conditions but that would also deny them the right to be classified as employees in California.”

Proposition 22 would give gig workers limited benefits and wage and worker protections, but establish them as an independent class of workers – and undo a 2019 California law, Assembly Bill 5 (AB5), that “would guarantee drivers access to the minimum wage, employer-provided health care and bargaining rights.”

I’ve long been self-employed, with the exception of some recent cybersecurity consulting contracts in which I was paid as a full-time employee with benefits, but that’s been my choice.

Being fully self-employed is not for the faint of heart. Besides cybersecurity consulting and writing a newspaper column, I have an apartment-rental business. I recently earned a real estate license and am selling properties, too.

I manage my own invoicing and taxes. I know to the penny – once my CPA explains it to me and I drop whatever mug of coffee I’m holding – how high my income taxes are. Few employees are aware of how much they pay in taxes or what their benefits cost their employers – which would be helpful to know before voting for new government policies that will increase both.

I manage my own health care insurance, which has gotten plenty expensive in recent years for individuals who don’t qualify for subsidies, in part because of government attempts to expand health insurance to everyone.

But, again, I choose to be self-employed. I like the freedom it provides. But it also makes me keenly aware of the unintended consequences of government regulations and policies.

California’s 2019 AB5 law would require Uber, for instance, to hire drivers as full-time employees with health insurance, paid sick leave and other benefits. Benefits are wonderful, but come at a price.

Uber claims that “if the company were forced to make all drivers across the country employees, for example, it could only support 260,000 full-time roles,” reports The Post. “That compares to 1.2 million active drivers the company was hosting on its app before the coronavirus pandemic.”

Uber also says fares would increase and drivers would be less available and timely – which means you might have to wait a while for your ride home to arrive after a night of enjoying the pub.

What it comes down to is that some politicians believe individuals shouldn’t have the freedom to exchange their skills and services for money from organizations, because organizations take advantage of those individuals. Joe Biden and Kamala Harris support AB5, not the watered-down Proposition 22.

Others think that in a free society, individuals should be able to offer their professional talents to anyone willing to pay for them, and government shouldn’t restrict the terms they negotiate. President Trump’s campaign supports that approach and is critical of AB5 (but has not, to my knowledge, supported Proposition 22).

That’s something else to think about when you vote in November’s election.

TOM PURCELL is a Pittsburgh Tribune-Review humor columnist and is nationally syndicated. Readers can contact him at tom@tompurcell.com.

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