Opinion: Secure future of gig workers
It’s important that the government works out a social security cover for the fast expanding gig economy.
By Nripendra Abhishek Nrip
Hyderabad: The internet is a very powerful business platform. Many people are able to generate a good income through this network. In today’s digital world, the definition of employment and the nature of work are also changing rapidly. A new global economy, named the ‘Gig Economy’, is fast emerging. The gig economy is a free market system in which temporary work opportunities generally exist and various organisations hire freelance workers for short-term engagements.
By 2024, the gig sector is expected to account for about 4% of India’s total workforce, according to a report by financial services platform StrideOne. It is expected to provide employment to around 23.5 million workers by 2024, a three-fold increase from just 8 million – or 1.5 per cent of the workforce – in 2020-21.
Ubiquitous Workforce
This type of work has grown in popularity in recent years because it is more productive. It provides flexibility and freedom and can be a cost-effective solution for businesses. Gig workers are the ubiquitous new workforce. They are the people who get us the food we order online, take us from home to the office or wherever we want, and usually provide many services that go unnoticed.
There are two fundamental factors behind the growth of the gig economy in India. Firstly, technological development. Technological changes have made it much easier to contract and for freelancers to find work. Secondly, due to the stringent labour laws in India, many companies prefer to have a contract workforce. The many changes made on both fronts – digitisation and labour – have helped.
Attention Missing
The Indian government needs to pay much more attention to the development of the gig economy. This is because this economy is currently facing unemployment due to a lack of inclusive growth.
Creation of jobs in the gig economy will boost employment. In addition, Indians are facing the problem of unemployment stemming from agriculture. The gig economy will be able to provide gainful employment to such rural youth. This is also likely to improve competition in the short term depending on the volume of work. Hiring freelance workers helps companies rationalise their workforce and reduce costs. This improves the competition and skills of the companies.
The gig economy also gives freedom to the workers, which can prove to be beneficial for them. It gives workers the freedom to work at their convenience, with no fixed hours. They can switch jobs as per their interest areas. There is an opportunity for women in this economy. The requirement of working fixed hours per day deters women from taking up formal sector jobs. The gig economy provides women with jobs that offer flexibility in terms of working hours.
However, concerns exist about the lack of job security and benefits for such workers. It is estimated that the gig economy will further expand in India in the future and hence it should be supported by government rules and policies to protect the rights of workers and ensure fair treatment towards them. Many gig workers in India are not covered by labour codes and do not have access to benefits such as health insurance and retirement plans.
Lacking Protection
A survey by Catalyst Fund and KarmaLife found that 88% of gig economy workers ran out of money before the end of the month. Most of them attributed this to rising household and fuel expenses. Ninety per cent of the workers surveyed also said they would like to take a personal loan to meet their family expenses, but cannot do so due to the nature of their job. The survey also pointed out that around 40% of gig workers had no insurance, and only 24% had employer-provided insurance cover. The remaining 36% bought insurance by paying the premium themselves.
According to research by Flourish Ventures, before the pandemic, most gig economy workers earned above Rs 25,000, while after the pandemic, nine out of ten workers were earning less than Rs 15,000. There are many possible reasons for this high-income fluctuation. Gig workers in India are often paid less than traditional workers and lack the same legal protections.
The gig economy is heavily dependent on technology and internet access, which again creates a barrier for those who do not have access to these resources. This further increases inequality. Gig workers may lack the same social connections and support systems as traditional employees as they often work independently and lack a physical workplace.
The government is considering providing affordable medical care at subsidised rates to employees working in the gig economy in Employees’ State Insurance Corporation (ESIC) hospitals and dispensaries. This can provide relief to the employees associated with the gig economy as the companies have to pay for their employees.
The Social Security Code Bill, 2019, was introduced by the government in the Lok Sabha in the last session of Parliament. The Bill proposes to provide social security cover for the first time in India to employees working in the gig economy. It states that the government will introduce a scheme to bring gig workers under ESIC.
The government of India should establish clear regulations and policies for the gig economy to ensure the safety of gig workers and hold companies accountable. The government should invest in education and training programmes to improve the skills of gig workers and increase their income-earning potential.
