Magazine of Socialist Action in Australia

Gig economy: A push by employers to increase exploitation

Reading Time: 3 minutes

The nature of work is undergoing a global shift. In late 2016, a report by the McKinsey Global Institute revealed that 30% of people in the United States and Europe are working independently in the so-called “gig economy”.

There are similar trends in Australia. A 2015 study by Upwork revealed that 4.1 million Australians – or 35% of the workforce – fall into the ‘freelance’ category and contribute $51 billion to the economy per year.

The gig economy refers to a growing number of workers no longer working traditional 9 to 5 hours. Instead they tend to work independently on a task-by-task basis, sometimes for various different employers.

Freelance arrangements have been common in many industries for years. However, since the economic crisis in 2008, freelancing – or gigging – has moved into a much broader range of occupations and industries.

The development of technology has been a factor in the rise of the gig economy, with apps revolutionising the means of communication and transaction through the internet.

But at the same time even those employed in professions such as engineering, accounting and teaching have seen full time jobs disappear only to be replaced with short term contracts and other forms of insecure work.

We are often told that this type of work is ‘empowering’ and ‘on our own terms’ but nothing could be further from the truth. The Financial Times reported that 30% of workers only do it as a last resort. Workers employed on this basis are also much more likely to come from poorer households than rich ones.

The New York Times wrote in 2014 that the gig economy is made of people who “often work seven-day weeks, trying to assemble a living wage from a series of one-off gigs. They have little recourse when the services for which they are on call change their business models or pay rates. To reduce the risks, many workers toggle among multiple services.”

Workers are often classified as ‘independent contractors’ in order for the employer to avoid a whole range of associated costs. None of these workers enjoy basic rights such as a living wage, annual leave or sick pay, let alone secure hours and certainty in their lives.

Despite the difficult situation many of these workers find themselves in, there have been examples of a fight back. Perhaps the most famous is Deliveroo.

This UK-based company delivers meals for many popular chains. It has grown rapidly, expanding into 12 countries in just three years. Couriers working for Deliveroo are becoming a common sight as they weave through the traffic in many major cities.

When Deliveroo proposed a change to the courier’s pay structure in August 2016, hundreds of Deliveroo’s riders took to the streets of London. Riders very quickly calculated that they would not be able to achieve a sustainable income without working longer hours or rushing. After a standoff lasting almost a week, the dispute was resolved largely in the riders’ favour.

The rise of the gig economy coincides with the rise of casualisation and growing wealth inequality. In April 2016, then Employment Minister Michaelia Cash told a meeting in Sydney that the gig economy needed to be embraced “whether we like it or not”.

The rise of the gig economy merely represents a push by employers to further increase their profits at the expense of workers’ wages and conditions. There is nothing inevitable about it and there is no need for it to be embraced.

The main task at hand is for the worker’s movement to understand the nature of the gig economy, and to push back against employer attempts to increase exploitation. We need a major union-led campaign against casualisation and contracting out. While many people would like some flexibility with their working arrangements, most desire security of hours and security of tenure.

We need to fight the shift towards casualisation in existing sectors with industrial action. In new and developing areas like the ‘sharing economy’, attempts need to be made to organise these workers into the trade unions. As the Deliveroo example shows, obstacles can be overcome and successful actions can be organised.

If the unions embraced workers trapped in the gig economy, it would not only help to reverse the trend towards wealth inequality but it would also help to rejuvenate the movement which has been in decline for the past couple of decades.

By Conor Flynn


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