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Coronavirus will hit gig workers particularly hard

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Investors in the gyrating US stock markets might be forgiven for feeling seasick this week. On Wednesday, share prices rose more than 4 per cent after the Super Tuesday primaries and approval by the House of Representatives of an $8bn package to combat the coronavirus outbreak.

It is easy to see the reason for cheer: $8bn is far more than the $2.5bn initially suggested by the White House, and it will be mostly directed to hospitals and medical research. However, before investors become too excited, they should note what is sadly missing in this bill: a commitment to plug the holes in America’s medical and social safety net that have been exposed by the disease, known as Covid-19.

This matters. If these holes go unfilled, and the virus keeps spreading, this could exacerbate the potential economic pain. And, as US Federal Reserve officials know only too well, it is foolish to rely on monetary policy to cushion this blow — notwithstanding Tuesday’s decision to cut rates by 50 basis points.

To understand why America’s weak safety net matters, consider an issue that has sparked hot debate in recent years: the rise of the so-called “gig” economy, in which workers are paid piecemeal for contingent work, often linked to tech platforms, such as ride-hailing and food delivery.

Tracking the size of contingent activity has always been notoriously hard. However, economists estimate that about a quarter of American workers currently do gig work, considerably higher than in previous years, and nearly half of these rely on it as their primary source of income.

In some ways, the gig economy has been positive for US growth: the creation of new tech-related gig jobs has helped to push unemployment down to 50-year lows. It also seems to have kept a lid on wage growth and inflation, enabling the Fed to keep rates low.

But the dark side of this arrangement is insecurity. Contingent compensation is unpredictable. Gig workers generally lack access to company-funded unemployment insurance, sick pay and medical benefits. In Europe, this is offset by public safety nets; not so in America, for the most part.

Well-paid gig workers, such as software engineers, can cope with this insecurity by purchasing private insurance. But many gig workers are low paid and sacrifice this to join the pool of 27.5m Americans who lack health insurance. Others buy cheap policies that require them to pay the first several thousand dollars of medical bills themselves.

This creates obvious medical risks with the coronavirus. The cost of testing and treatment will deter some Americans from seeking care if they fall sick. Tales of sky-high bills are buzzing in the media. A Miami man says he received a $3,270 bill for a voluntary coronavirus test; an American evacuated from the outbreak’s epicentre in Wuhan China received a $3,918 bill for mandatory quarantine in San Diego. The lack of sick pay may encourage unwell gig workers to keep working. And many low-paid gig jobs cannot be performed at home. Delivering a pizza or driving an Uber car still requires a human.

If the coronavirus sparks a lasting downturn in travel, tourism and the retail sector, it will hit low-paid contingent workers particularly hard. Indeed, United Airlines cut domestic flights by 10 per cent and the threat of more could shatter confidence. This matters in a country where so many households live pay cheque to pay cheque that nearly one-third of American families could not meet an emergency $400 bill from existing resources.

What can be done? Congress could make coronavirus testing and quarantine, and perhaps treatment, free for all US residents who lack insurance. New York state has taken a first step by waiving co-payments for testing. But much more is needed. Laurence Boone, chief economist at the OECD, has suggested that governments should use “temporary direct transfers” of cash to support vulnerable households, if the virus spreads. That would deliver far more impact and reassurance than the vague pledge of $1bn in loan subsidies to small companies in Wednesday’s bill.

But American leaders must start a proper debate about creating a better longer term safety net for gig workers. California is doing this in a piecemeal and imperfect manner. However, federal action is needed. Congress could start by considering some sensible proposals on portable benefits from senator Mark Warner and the Aspen Institute.

But none of this was included in this week’s House bill. And Fed chairman Jay Powell knows rate cuts are not enough but is wary of wading too directly into policy matters. Therein lies a potential tragedy.

gillian.tett@ft.com

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The Big Gig: FinTech Australia’s new board member

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Former senior advisor to the Turnbull and Morrison governments Harry Godber has been added to the board of FinTech Australia as an independent director.

Mr Godber acted as an advisor to Minister for Superannuation, Financial Services and the Digital Economy Jane Hume, where he led initiatives in fintech and financial regulation. He also worked on Australia’s Consumer Data Right, superannuation reform and the introduction of new payment regulation.

Mr Godber was an Industry, Innovation and Science Adviser to Ministers Arthur Sinodinos and Michaelia Cash, and, in a separate role led product and strategy at the CSIRO’s Data61.

“With the right policy and regulatory settings in place, fintech is poised to lead Australian consumers and business through our economic recovery,” Mr Godber said.

Mr Godber currently works as head of strategy for Flare, a fintech focused on HR, banking and superannuation.

Harry Godber, a former senior advisor to the Turnbull and Morrison governments has been added to the board of FinTech Australia. Image: Twitter.

Deloitte has promoted Rob Hillard to be its Asia Pacific consulting leader, where he will oversee around $2 billion worth of consulting work in the region.

Mr Hillard has worked as the consulting giant’s chief transformation officer for the past year and was previously Deloitte’s chief strategy and innovation officer. After being made a managing partner in 2015, Mr Hillard oversaw the doubling of Deloitte professionals to over 3,000 by 2018.

Mr Hillard is a member of the Deloitte global board and the Chairman of the Australian Information Industry Association.

Australian Competition and Consumer Commission (ACCC) Commissioner Sarah Court is leaving the watchdog after more than a decade to join the Australian Securities and Investment Commission (ASIC). Ms Court joins ASIC after wide involvement in the ACCC’s work, including chairing the its enforcement, compliance, Consumer Data Right and legal committees and as a member of the merger review and competition exemptions committees.

“This is a well-deserved reflection of the experience, expertise, and wisdom Sarah brings to the table,” ACCC Chair Rod Sims said “ASIC’s gain is very much our loss.”

The new Australian Public Service Academy will be led by Grant Lovelock, who has been responsible for skills funding and apprenticeship policy at the Commonwealth Department of Education and Training. Most recently Mr Lovelock has worked at the Department’s National Careers Institute.

The University of Sydney’s United States Studies Centre (USSC) has added three more non-resident experts: former chief of staff to President Trump Mick Mulvaney, former Director General of ASIO Duncan Lewis and Sir Roland Wilson Scholar at the Australian National University’s National Security College Jennifer Jackett.

Mr Mulvaney and Mr Lewis join as non-resident senior fellows while Ms Jackett joins the University’s Foreign Policy and Defence Program as a non-resident fellow.

DXC Technologies lost associate partner Pewter Klement, who joined Avande this month. Mr Klement leaves DXC after three and a half years for the Microsoft focused Avande.

Alan Cameron has stepped down from the board of PEXA, the online property exchange network he helped establish in 2010, to fulfil a COAG initiative to deliver a single, national e-conveyancing solution to the Australian property industry.

Mr Cameron will be replaced by finance industry veteran Mark Joiner as independent non-executive Chairman.

Construction software firm Asite has announced the appointment of Kyle Hamer as chief marketing officer. Mr Hamer will lead the global marketing and communications team from the company’s Houston office.

AUmake, the ASX-listed company that connects Asian influencers with Australian brands has a new chief financial officer, with Tony Guarna joining this month. Mr Guarna has held finance chief roles at several ASX companies and joins AUmake as its user base hits more than 27,000 after launching in October last year.

Global semiconductor technology and equipment firm Revasum appointed Rebecca Shooter-Dodd as chief financial and operating officer, formalising her operating responsibilities in addition to her current role as Revasum’s chief financial officer and company secretary.

Former Gartner director Rhys Binney has been announced as Axe Group’s senior vice-president of growth strategy. Mr Binney joins the insurance software provider after three years as a director at Gartner for their CIO and CEO advisory groups.

UK fintech Marqeta has named Duncan Currie as country manager for Australia and New Zealand as part of its plans to establish an Asia Pacific Headquarters in Melbourne. Mr Currie is an industry veteran with almost two decades of payments experience, serving as a consultant and advisor to local fintechs, alongside stints at ANZ, Visa and Tuxedo Money.

Do you know more? Contact James Riley via Email or Signal.

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Free the Gig Economy! | City Journal

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Last week, the Biden administration made another effort to drag the U.S. labor market back into the past. The Department of Labor withdrew the independent-contractor rule, a Trump-era regulation that made it easier for firms to classify workers as contractors instead of employees. It’s not yet clear what will replace it, though President Biden says he supports the ABC test that California tried to implement, which would classify most contractors as employees—including not just drivers for Uber and Lyft but even freelance writers.

The Labor Department and the media are framing the administration’s move as a way to ensure that workers in the gig economy are protected and paid overtime and minimum wage. Yet many workers prefer the flexibility of contract work, which lets them set their own hours and work for other companies. According to a Fed survey, most gig workers report high levels of satisfaction with the arrangement. When California tried to classify gig workers as employees, the state faced pushback not just from companies but from gig workers themselves.

They have good reasons to prefer it. The nature of work is changing, as it has throughout history. It once was considered dehumanizing that most workers should be beholden to a single employer. Today, we’re forcing this arrangement on people who don’t want it.

The rollback of the Trump rule joins a list of policies—efforts to increase unionization, low-skill manufacturing, and “shovel-ready” infrastructure jobs—by which the Biden administration is attempting to shoehorn the modern labor market into a 1950s mold. The problem with these policies is that the labor market has changed. When work was more uniform, workers were easier to replace, so forming strong ties to one’s employer made sense for job security. Unionization also made sense because it allowed the large numbers of lower-skilled workers to pool together for similar pay and benefits.

Over time, however, manufacturing, construction, and most other jobs have become more technical, requiring skilled workforces. The more skilled the workers, the less incentive they have to attach themselves to individual jobs or to pool risk with fellow workers. The more skills you have, the less unionization makes sense because you’re effectively subsidizing lower-skilled workers. And workers today also place a higher premium on flexibility. This may explain why the unionization drive at Amazon has not succeeded.

As we emerge from the pandemic, we should expect the value placed on flexibility in work arrangements to increase. The expanded availability of remote work, combined with the continuing unpredictability of school re-openings and child-care arrangements, make benefits like the ability to set your own hours and the freedom to work for multiple employers more important than ever.

Some Biden policies, like making it easier to buy health insurance without an employer, move in the right direction. The administration would do well to pursue more measures like these that embrace the new economy, rather than trying to force workers into structures better suited for the economy of more than a half-century ago.

Photo by Drew Angerer/Getty Images



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Pixelbet becomes latest GiG Comply sign-up

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Gaming Innovation Group has lauded a “growing demand” for its automated affiliate marketing compliance screening tool after securing an agreement with Pixelbet.

The company’s solution enables operators to set-up their own criteria and checklist parameters to scan and check affiliate websites for content including igaming code red words, links and regulatory requirements across multiple jurisdictions

It works by using its rules engine to analyse real snapshots from affiliates’ campaigns, and provides operators with the promotional content that is being used in their brands’ promotions.

“The growing demand for our compliance solution is a clear sign that we have created a solution that has become the go-to compliance tool within the igaming industry,” noted Jonas Warrer, CMO at GiG.

“It’s great to see that new and ambitious companies such as Pixelbet value the importance of marketing compliance, we look forward to supporting them in their marketing compliance efforts with GiG Comply.”  

GiG Comply will permit the Malta-based gaming firm to set-up bespoke checklist parameters, which can be tailored to cover market-specific legislation and advertising standards. 

This will allow the group to remain proactive and in control of their affiliate marketing by ensuring that affiliates are aligned with their brand, that responsible gaming measures are visible on relevant pages, and terms and conditions are correct and up to date. 

Eirik Kristiansen, CEO of Pixelbet, added: “We are excited to partner up with GiG through its market-leading GiG Comply software. This strong product fits perfectly with our current and future business objectives, enabling us to further improve how we manage our affiliate compliance operations. 

“This partnership will help Pixelbet ensure that our affiliates can continue offering high quality experiences that are fully compliant with regional regulations and requirements.”



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