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Badly Hit by Covid-19, Brazil and Latin America May Become Trapped in a Gig Economy

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Coronavirus has hit the healthcare systems and societies of the global south even harder than the rest of the world due to their already weak economies and high debt levels. Latin America is no exception, and has been particularly affected due to very high infection numbers.

With more than 7.9 million cases and more than 300,000 deaths, the region has been described as the world’s worst hit region. That is why, according to the World Bank’s June assessment, the Latin American economy will contract 7.2% in 2020 as a whole.

What’s more, some of the promising, if modest, trends of the last two decades are being reversed by the pandemic. This was a region that was starting to reduce huge levels of inequality thanks to significant economic growth from the commodity boom that ended in 2013, as well as some innovative wage policies and social programs introduced by progressive governments.

Within this context, younger people are being especially badly hit. School closures are hurting education and, as in many countries, job prospects for them are particularly bad. If the region cannot control the virus and kickstart its economy, we will see the growth of a “lockdown generation”, trapped in unemployment, informal jobs and in-work poverty.

Unemployment and the Gig Economy

Both the quantity and quality of jobs are deteriorating rapidly as a result of the economic paralysis created by the pandemic. The UN’s International Labor Organization estimates that the health crisis will push unemployment rates in the region up from 8.1% to 11.5% in 2020, the equivalent of more than 11.5 million newly unemployed.

As a result, an extra 30 million are expected to fall into poverty (and these estimates were made in May, before the effects of the virus really took hold). Young people will be disproportionately affected, having already been enduring unemployment rates that were three times higher than that of older adults before the pandemic.

But it’s the historically high level of informal work in Latin America that will make the recovery much more difficult. Before the pandemic, more than half of the workforce across the region was in informal and precarious employment, with no social protections like sick pay or even written contracts. Again, young people make up an even higher proportion of this informal workforce.

With economies contracting due to the pandemic, even more people are turning to gig work throughout the region in search of a daily income. But this comes with costs. Relying on work as a courier, taxi driver or providing cleaning services through an app was already a tough job.

It’s generally low-paid and circumvents minimum-wage laws, as workers are classed as self-employed or they simply work outside of all national labor laws. It’s precarious, offering no job security or benefits like sick pay or paid holidays. It’s also very isolating, as you are generally working on your own, and it offers very little in the way of career prospects.

Risks and Rewards

With the pandemic, the risks involved with gig work increased considerably as these workers come into contact with so many different people. But the pandemic also brought demand for these services, with more people ordering groceries and takeaways under lockdown, or taking taxis instead of public transport.

Yet life as a gig worker has not improved. Across Latin America these key workers have reported a lack of support in terms of personal protective equipment and health insurance. Huge numbers also say their incomes have stayed the same or even worsened, despite carrying out more jobs. In one survey of 298 drivers across 29 cities, 64% said their pay had dropped. This is due to changes in the terms offered by companies.

Thousands have protested for better pay and rights. The last couple of months have seen strikes by delivery drivers in cities across the region, including in Argentina, Brazil, Colombia and Mexico. Different app companies operate there but the demands are the same: for better pay from the companies and better regulation from governments to prevent exploitation.

The lack of regulation is a big part of the problem. It allows the dark side of the gig economy to develop: a growing pool of workers with no employment protection, underpaid with few other job options, and little power to negotiate with big tech companies managing their workforce through algorithms.

Latin America’s recovery from coronavirus will require significant change to the region’s labor markets. Without better protection from underemployment and in-work poverty, the region risks making inequality worse again. Listening to the demands of striking gig workers is a good place to start.

Luciana Zorzoli is a Lecturer in Employment Relations & HR Management, Cardiff Business School, Cardiff University

This article was originally published in The Conversation. Read the original article here: https://theconversation.com/coronavirus-could-create-a-lockdown-generation-in-latin-america-if-governments-dont-act-144161

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Insurers may gain from California gig drivers’ new benefits

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Ride-hailing and food delivery companies like Uber Technologies Inc., DoorDash Inc. and Lyft Inc. are preparing to roll out benefit packages that include health insurance subsidies for their gig drivers in California, a move that experts say could benefit managed care providers.

The healthcare subsidies are one of the results of California voters approving Proposition 22 in the Nov. 3 general election. The measure allows gig economy companies to continue treating their drivers as independent contractors rather than employees but also requires them to offer certain benefits comparable to those of full-time employees.

Under the provisions of Prop 22, gig employers must provide subsidies consistent with the average employer contributions required under the Affordable Care Act, which would enable contractors to buy healthcare coverage. Beginning in 2021, drivers will receive subsidies each quarter after they submit proof of coverage either via private carriers or through the exchanges.

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“If drivers were to pick an insurance coverage through the exchanges or the individual market, UnitedHealth and Anthem would be well-positioned to absorb this demand because they offer cost-effective access to healthcare services through a large network of physicians, hospitals and outpatient facilities,” Hardy said in an interview.CFRA Research analyst Sel Hardy said the new law could present profitable opportunities for carriers such as Anthem Inc. and UnitedHealth Group Inc.

Piper Sandler analyst Sarah James said Centene Corp. and Molina Healthcare Inc. could also benefit from the new measure.

“Insurance companies are making anywhere from low- to high-single-digit margins on exchange products,” James said in an interview. “Centene is one of the largest exchange providers and they’re also, from a percent of total company earnings perspective, the most exposed to that business.”

The subsidies will be based on drivers’ engaged time with passengers, which is limited to driving to, picking up and transporting customers to their destinations. Time spent waiting between gigs would not count.

Drivers engaged between 15 and 25 hours a week would receive subsidies amounting to approximately $184 per month, while drivers engaged more than 25 hours per week would receive subsidies of about $367 per month.

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The new law also requires network companies to provide on-demand occupational accident insurance to cover medical expenses, up to $1 million, as well as lost income resulting from injuries or illnesses suffered during engaged time. Disability payments and death benefits also must be similar to those provided by workers’ compensation.

However, gig employers do not have to offer other protections such as workers’ compensation and unemployment insurance, nor do they have to provide for family leave or sick leave or allow workers to form labor unions.

The measure overrides California Assembly Bill 5, signed into law in September 2019, which sought to bring labor protections to more gig workers and force companies to classify them as employees.

The industry responded by pushing Prop 22 and spending $200 million to back its passage. The measure was approved by a 58% to 42% margin.

The measure is scheduled to be officially approved by California Secretary of State Alex Padilla on Dec. 12 and go into effect on Dec. 17.

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Labour eyes stronger employment rights for precarious ‘gig economy’ workers

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Labour is looking at extending employment rights for workers in the so-called “gig economy” under plans detailed in a new think-tank report.

Precarious workers like Deliveroo riders and Uber drivers would get the same rights as other employees and have their rates set by collective bargaining, under the proposals being examined by Ed Miliband.

While the party’s final policies are yet to be decided, the shadow business secretary said new blueprint drawn up by Common Wealth contains “useful insights” into how workers’ rights could be extended.

Many workers currently miss out on basic employment rights because firms have successfully argued in court that they are in fact self-employed – a loophole that leaves them without holiday pay and even minimum hourly wages.

“There is nothing innate in the concept of the platform that means that work organised through it should be precarious, badly paid, or lacking in control,” the Common Wealth report argues.

Pinpointing “a weakness of regulation and the wider power imbalances” in the labour market, the think-tank recommends closing the loopholes exploited by tech companies to run down pay and conditions for workers on their platforms.

It says this could be done by creating a new “worker” legal status covering all jobs, whether agency workers, bogus “self-employed” or employees. There would be a “statutory presumption that all individuals qualify as employees unless the employer can demonstrate that they are genuinely self-employed”.

This would ensure all workers enjoyed rights such as statutory redundancy pay, sick pay, maternity, paternity, and adoption leave and holiday pay – which many do not currently get.

Zero hours contracts would also be scrapped and replaced with flexible contract that guaranteed employees a minimum number of hours, based on the existing German model.

Responding to the report, Mr Miliband, who sits on the board of the think-tank, said: “Digital innovation and developing technologies offer big opportunities for society, but we must ensure that companies do not wield excessive and anti-competitive power, so that technology works for the public good.

“This report provides useful insights into key ideas and concepts, including looking at how workers rights could be enshrined in light of the changing use of data; and how a National Investment Bank could help catalyse private investment in projects focused on the public good.”

The report also suggests that digital platforms like Deliveroo and Uber should be regulated like public utilities if they achieve monopoly status. It also

Mathew Lawrence, report co-author and Director of Common Wealth said: “There is nothing fixed or inevitable about how the digital economy operates.

“Though the monopoly power of the platform giants is producing a series of stark economic and social challenges, we can reimagine their power and recode how they operate. That should start with a new deal for all workers.”

He added: “But we should go further. A new architecture of multi-stakeholder ownership and control, giving suppliers and users of the platform genuine voice and control, can better unlock the democratic and enlivening potential of platform technology for all.”  

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This New Fort Worth Tech Firm Is Bringing the Gig Economy to the Energy Industry » Dallas Innovates

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A new technology firm has launched out of Fort Worth that uses first-of-its-kind technology to connect mineral managers and royalty owners to energy professionals across the U.S. for project-based work. 

Fittingly named, the company essentially offers freelance jobs to those in the energy industry through a tech-enabled marketplace. The platform, which Energy Freelance says is the only one of its kind, has two-fold benefits for both sides of the energy industry.

Mineral managers and mineral and royalty owners are given access to a network of experts, and can create projects and hire qualified workers in a matter of minutes. On the other end, landmen and energy professionals are able to find consistent contract work during a period of market change amidst COVID-19.

Projects posted range from title research and due diligence to GIS mapping and data validation.

[Photo: Energy Freelance]

According to Energy Freelance, the tech is filling an urgent need in the industry. Millions of landmen, title attorneys, and others now have a dedicated place to complete projects they traditionally wouldn’t have an opportunity to.

They’re also able to be their own bosses. The benefits of using the platform, according to the Energy Freelance team, are: access to personalized job recommendations, more money earned by working directly with a client, and working from wherever and whenever.

At the same time, the millions of mineral and royalty owners are assured experienced, qualified workers have been hired to handle their energy needs.

In a time when the gig economy is booming, Energy Freelance’s entirely online marketplace wants to open a previously unavailable segment of the market.

“Uber has proven that there is a strong market for the ‘on-demand service’ and ‘be your own boss’ model,” Energy Freelance CEO and Co-Founder Ryan Vinson said in a statement. “We are taking that same concept and applying it to a vast and growing energy marketplace.”

Vinson, a serial entrepreneur, and the team that brought MineralWare and Energy Domain to market are the ones behind Energy Freelance.

Fort Worth-based MineralWare is a provider of cutting-edge mineral management software for banks, institutions, investment funds, foundations, family offices and individuals. In November 2019, MineralWare launched sister company Energy Domain, an oil and gas minerals royalties marketplace, the industry’s first end-to-end transaction platform of its kind.

Energy Freelance is also a MineralWare company.

“The industry and our clients at MineralWare have continued to ask for easier access to trustworthy industry professionals and competitive rates for project-based work,” Vinson said. “Through an efficient tech-enabled platform, Energy Freelance does just that and more.”

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