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The budget might promise jobs, but it overlooks gig economy workers





Source: Unsplash/ Kai Pilger.

Treasurer Josh Frydenberg promised a federal budget focused on “jobs, jobs, jobs”.

In one sense he didn’t disappoint. His budget speech mentioned jobs 37 times — an average of about once a minute.

“This budget is all about jobs,” he declared. But it wasn’t about all jobs.

While the budget devotes billions to getting unemployed Australians into traditional employment, it does little for those with diminishing opportunities to find work outside the ‘gig economy’, where they are effectively treated as subcontractors, not as employees with rights secured by the Fair Work Act.

The government’s $37 billion in subsidies for businesses include almost $4 billion for JobMaker subsidies (paying $200 a week for hiring a new employee aged 16-29, and $100 a week for an employee aged 30-35), and $1.2 billion for apprenticeships in advanced manufacturing.

There’s also $1 billion for businesses in the defence industry and $3 billion for infrastructure projects.

But largely missing from the government’s considerations are those in sectors hit hardest by the COVID-19 pandemic where jobs are increasingly precarious.

It is not just workers in ‘blue-collar’ jobs in hospitality and delivery that increasingly face few opportunities to find a secure, full-time job.

Casualised, part-time and freelance ‘gig’ work is also increasingly common in ‘white-collar’ industries such the media, the arts and higher education.

Rise of the gig economy

The term “gig economy” was coined in 2009, at the height of the global financial crisis, as scores of unemployed and underemployed workers picked up various odd jobs to cover their living expenses.

Journalist Tina Brown (a former editor of The New Yorker) described workers in the knowledge economy increasingly depending on “a bunch of free-floating projects, consultancies, and part-time bits and pieces” for work.

Brown predicted the gig economy was “the new face of the job market” for knowledge workers.

A decade on, it’s difficult to track the exact scale and shape of the gig economy — partly because terms such as ‘gig work’, ‘freelance work’, ‘flexible work’ and ‘digital platform work’ are used interchangeably.

Australian Bureau of Statistics numbers, for example, are often cited to show the proportion of “employees without paid leave entitlements” hasn’t risen greatly in the past two decades. But this doesn’t capture the insecurity of workers not counted as employees.

A 2016 report by the Grattan Institute estimated 0.5% of Australians used peer-to-peer work platforms once a month.

A 2019 national survey of 14,000 Australians found 13% of respondents had undertaken “digital platform work”, with 7% doing so (or seeking to do so) in the previous 12 months.

The five most common platforms used were Airtasker, Uber, Freelancer, UberEats and Deliveroo. The most common type of work was food delivery, followed by professional services work, maintenance and then writing or translation work. More than a quarter had done computer-based work only.

According to technology researchers writing in the Harvard Business Review: “The COVID-19 pandemic could well prove to be a pivotal point in the gigification of knowledge work, and many firms will be attracted by the prospects of the direct and indirect cost savings that the gig economy model seems to offer.”

Gig work during the pandemic

As a freelance writer and PhD candidate, I can relate. Through my paid work and own experience, I’ve seen how the COVID-19 crisis is affecting both blue- and white-collar workers.

Earlier this year, when the first wave of the pandemic hit, I was commissioned to write an article about the four major food delivery platforms in Australia (Uber Eats, Menulog, Deliveroo and DoorDash). It was supposed to be a comparison article aimed at potential customers, explaining which platform is best. But speaking to delivery drivers made it clear not a single one of these companies would guarantee their workers a minimum wage.

One of the gig workers I interviewed was Joseph, who was delivering food around Perth for UberEats. As the first restrictions kicked in, his work evaporated almost immediately.

He told me that one week he made $78 for 10 hours’ work — about $7.80 an hour, less than half the national minimum wage of $19.84 an hour. After fuel and vehicle costs, he estimated he cleared just $20.

All five delivery workers I interviewed said they had earned less than the national minimum wage at one time or another.

Joseph at least qualified for JobSeeker, but others were migrant workers with no right to welfare payments.

Being a white-collar gig worker

The irony of writing about gig workers such as Joseph who grapple with precarious work is that the article I was writing was itself gig work.

Over the past few years, I’ve worked regularly as a freelance journalist and copywriter for various publications and brands.

In a typical week, I’d spend Monday in an office writing listicles and advertorials for a website aimed at high school students. On a Tuesday I’d commission and edit articles for a travel website. For the remainder of the week, I’d pitch interviews and feature articles to publications.

I commuted to different offices and co-working spaces around Sydney, worked from my windowless bedroom or in nearby cafes.

I accepted just about every writing gig I could find, using all my own equipment, setting my own schedule and invoicing as a sole trader.

I took occasional cleaning and bar-tending jobs for extra cash.

Though I mostly enjoyed the work, it was challenging to stay on top of five or six different gigs simultaneously. I spent a lot of time chasing up late invoices and it was difficult to financially plan beyond paying my monthly rent.

Closing the loophole

Now, as a PhD student, I am contemplating how much the gig economy has encroached on academia. It has been estimated that up to 70% of teaching staff in some Australian universities were precariously employed, as casuals or on short-term contracts, before the pandemic.

These academics were naturally the first to lose their jobs, with the universities excluded from the federal government’s JobKeeper scheme.

If the government is “all about jobs”, it’s time to acknowledge the need for substantive reform to Australia’s industrial relations laws, to close the legal loopholes that allow businesses to exploit workers as non-employees.The Conversation

This article is republished from The Conversation under a Creative Commons license. Read the original article.

NOW READ: Most of the 111,000 net new jobs created in August were in the gig economy: Is this a sign of what’s to come?

NOW READ: Delivery drivers in the gig economy are earning $10 an hour on average after costs: Survey

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Exclusive: Survey reveals pandemic’s toll on gig workers




More than two-thirds of gig workers have seen their incomes drop during the coronavirus pandemic, with almost a third cutting back on food as they struggle to cover expenses, according to new data from an industry survey shared exclusively with Axios.

The big picture: The pandemic has put ride-share drivers, personal shoppers and others at heightened risk of contracting the coronavirus without netting them benefits or additional pay.

By the numbers: The survey found that where one in five gig economy workers made less than $1000 a month in March, by summer that number had risen to three in five.

  • Nearly three in five said they couldn’t cover household expenses for more than a month without additional financial help if they lost their main source of income.
  • Black gig workers have been particularly hard hit, reporting lower earnings and greater concern about COVID-19 than their white counterparts.

Details: The survey polled 695 gig workers across five U.S. cities in July and August.

  • It was led by Flourish Ventures, a financial technology venture capital firm backed by eBay founder Pierre Omidyar, and Steady, a platform that connects people to part-time work at both gig-economy firms and traditional employers such as retailers.

What they’re saying: “All stakeholders need to be involved” to help get gig workers and others hard hit by the pandemic on firmer financial footing as the pandemic drags on, Flourish managing partner Emmalyn Shaw told Axios.

  • That includes the government and financial services providers, she said, as well as tech companies that may be able to alleviate financial troubles triggered or compounded by the pandemic through innovation.
  • Shaw cited as examples online banking startup Chime; Propel, which helps food stamp recipients manage their benefits through an app; and Cushion, which contests banking fees on users’ behalf for an annual subscription fee.

The bottom line: “There are all these ways technology can address people’s needs,” Shaw said. “The question is, how creative can you be?”

Go deeper:

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Gig Worker Groups Release Solidarity Letter Opposing Proposition 22




On Wednesday, ride-hail driver and advocate groups from 6 major cities across the United States released a statement of solidarity reiterating their opposition to a California ballot initiative proposed by gig companies.  

Proposition 22, as the initiative is known, is a ballot measure backed by app-based gig companies such as Uber, Lyft, and Instacart, and seeks to exempt the companies from reclassifying their drivers as employees.

“We stand in solidarity with mobile workers across the globe who are uniting to drive up standards in our industries and win our fair share from big app companies,” the letter says. “In the United States, we condemn actions in California by the giant global companies who are waging a campaign to misclassify drivers as a way to avoid paying minimum wage, healthcare, paid sick leave, workers compensation coverage and other benefits.”

Gig companies have spent the past decade protecting a business model that relies recruiting far too many workers and then misclassifying them. This allows gig companies to both minimize labor costs by denying workers benefits and protections, and keep wait times low by forcing most drivers to spend a significant amount of their time simply waiting for customers. These companies continue tweaking the independent contractor model to push as many costs as possible onto the driver and use venture capital subsidies to operate at unsustainable and unprofitable levels in pursuit of an eventual monopoly. Wanton disregard for regulatory law (“ask forgiveness not permission”) is also a key part of the strategy.

Uber, Lyft, DoorDash, Instacart, and Postmates have sunk nearly $200 million into their Yes on Prop 22 campaign, which has unleashed an unprecedented propaganda campaign in what is shaping up to be the most expensive ballot measure in U.S. history. 

“All eyes are on California as we witness the lengths these companies will go in order to defeat an employment protection law passed by elected officials that were put in office by the people of California,” the letter reads. “It is not only an attack on workers but it is an attack on democracy.”

Victory for the gig companies would mean the past decade of law-breaking, regulatory capture, lobbying, and malfeasance would now be codified into a law that would require a seven-eights majority of the California state legislature to overturn. After California, it’s likely that Uber and its coalition would turn their sights on other states flirting with their own versions of AB5, such as Massachusetts.

The stakes for gig companies are high. Faced with the prospect of Prop 22 failing, Uber and Lyft threatened to exit California in August if they did not successfully delay a legal ruling demanding the immediate reclassification of ride-hail drivers to employees. Uber and Lyft have also threatened to leave almost every single time a city has demanded the companies follow basic regulations about safety or licensing requirements. 

Those threats to leave California come despite the fact that the state is responsible for 9 percent of Uber’s global Rides and Eats gross bookings, along with 16 percent of Lyft’s rides. As commentators have long pointed out, Uber’s business model does not actually change the unit economics of ride-hailing—there is no taxi operator as large as Uber because it isn’t sustainable or profitable to be as large as Uber and offer what it does: taxi service with an app.

This has not deterred the ride-hailing giant from turning to threats. In an early October blog, Uber CEO Dara Khosrowshahi admitted that employment carried a “high cost” for the company—nationwide, Khosrowshahi claims that the company could only employ a quarter of a million drivers full time.

Defeat of Proposition 22 is unlikely to result in the outright exit of the ride-hailing companies, but a restructuring to a new business model is likely. At one point, Uber and Lyft were floating the franchise model as a possible alternative. All of this, however, distracts from the fact that we are in this position largely because of these companies and their desire to realize outsized returns regardless of whether the industry they were entering made any economic sense.

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