Gig economy workers have long expressed concerns about their working conditions. Photo / Getty Images
Gig economy workers have long expressed concerns about their working conditions. Photo / Getty Images
It's often difficult in a crisis to look beyond the immediate issues. However, if we are to come out of this pandemic stronger than we went into it, we must consider what wider lessons can be learned.
First,and rightly, when the chips are down the expectation is that the governments will step in to protect and support the most vulnerable in our society. Across the globe, we are seeing governments take emergency steps, with significant adverse impacts to budgets, deficits and economies.
Of course, this will inevitably have long-term effects way beyond the next few months. It will inevitably mean longer-term cuts to essential services, to health, social programmes, education and infrastructure as well as arts and culture, while the demands for social welfare and support will rise and will remain higher for some time.
This will require governments to rethink their approaches to how these burdens are shared between business and government (via taxation, duties, etc). For example, as COVID-19 started to affect the United States, I was fascinated to see Uber demanding that state governments provide support to their self-employed drivers as if they were employees, while at the same time the ride-sharing company was taking legal action against the state of California to challenge California's legislative ruling which defined Uber drivers as employees. Of course, Uber always sought to define its drivers as self- employed independent contractors (with no standard employee benefits) – until COVID.
This is the great fallacy of the gig economy. At its core the 'gig' involves the transfer of obligations from the corporation to the worker, who receives little beyond income (often below minimum wage) and flexible hours. While the individual sacrifices made by these workers may seem small, when they are added together whole economies were becoming imperilled by a generation of gig workers with nothing to fall back on and no safety net, often working for global gig owners who pay minimal tax in most of the territories in which they operate. The question always was: when these workers get old or sick, or there is some enormous economic cataclysm, who will be expected to support them?
Here Uber has helpfully provided the answer: "Why, the state, of course!" To be fair, there are examples such as Alphabet (Google), which has announced support mechanisms for its contractors, but these mechanisms would have been available as of right if these 'contractors' had actually been employees.
So as governments start to consider the lessons of COVID-19, our thinking about the gig economy must change. Unless we are willing to see our fellow citizens literally fall by the wayside, we are going to have to make changes to eradicate gig contracts that do not provide basic protections such as sick pay, holiday pay, superannuation and the minimum wage.
Andrew Barnes spearheaded the move into the four-day week at Perpetual Guardian. Photo / File
Any economist would tell you that the maths is simple – if more spending is needed in some areas, governments must raise funds by cutting services, selling assets, borrowing on international markets or by expanding the tax platform. Companies should not be able to arbitrage the system at the expense of their workers while often simultaneously avoiding contributing their fair share to the local tax base that provides both the safety net and critical infrastructure.
If the legacy of COVID-19 crisis leads to a reappraisal of our society, let that include a definitive end to the gig economy.
- Andrew Barnes, founder of Perpetual Guardian, is a major supporter of the four-day week.
