The Gig Economy - Freedom of Choice or a Race to the Bottom?

The Online Gig Economy
At least 20%-30% of the working population in developed countries are working in the gig economy. Are we witnessing a revolution in working practices or a repackaging of old work concepts in new technological clothing, and what is the downside?

This week John Harrison is joined by Eddie Keane from the School of Law at the University of Limerick and Diane Mulcahy, author of the book ‘The Gig Economy’ to explore the pros and cons of the issue.

Diane Mulcahy noted that the gig economy is a lot larger than perhaps many people realise. “If you don’t have a full-time job, you are not a full-time employee, then you are in the gig economy. If you are a consultant, a contractor, a freelancer, an on-demand worker or a part time worker, then you are in the gig economy.” Eddie Keane says that the gig economy is in many ways old wine in new bottles. “It’s really about part-time work without any kind of concept about being hired again”. Eddie Keane says that the gig economy is very attractive for people who may be thinking of setting up a business on their own. “One of the advantages of the gig economy is that they can dip their toe into the water. There is also quite a lot of under reporting. …On a personal preference basis, people like the autonomy that the gig economy brings people. People like being able to pick and choose between jobs, and not be constrained to a strict working week. But all of this comes at a cost”. For knowledge workers, Diane Mulcahy says, it is all about control. “You can control the type of work you do, who you work with, where and when. The gig economy is really very merit-based. …it’s not about the process of getting the work done, it’s about the results.”

There is another side to this however, and that is the exploitation of low-paid workers. Diane Mulcahy feels that this is not an issue, as there are “always winners and losers in any economy. …The gig economy is not a panacea; it doesn’t solve all of the problems of our economy, so those situations continue to exist in a gig economy.” Eddie Keane says the problem is “that you are going to have more work than there is available.”

Eddie Keane points out the legislative dilemma in western Europe having come about because protective legislation is based upon a dichotomy, that either you are classified as an independent contractor capable of looking after your own interests, or an employee who would be considered to be vulnerable and therefore in need of protection for a variety of reasons. “The issue is that because of historical reasons, we tend to equate employees with those that have particular attributes, in western Europe those attributes were of a servant, in the older master and servant era, so when we are looking at whether protective legislation applies to someone or not, what we are actually looking for are specific attributes that a servant would have had, such as the ability of the hirer to control what the worker does, when and how they do it and things like that… when you try to transfer that across to an average gig worker what you are really looking at is the question: does that particular gig worker have to perform duties in the future for that hirer, and at all times, the answer would be no. That excludes the gig worker form being an employee which then excludes them from protective legislation like a minimum pay or holiday entitlement. …This creates a quite vulnerable situation for them, particularly when they can be competing against each other for the work. You could get into this famous phrase which is: ‘A Race to The Bottom.’”

Diane Mulcahy says that such situation is the result of the failure of public policy that has shown up in the court system. She makes the point that there is no such thing as job security any more, even if you are full-time employee. “That’s gone, that’s an old way of thinking.”

The guests also discuss whether or not UBI would work in America and Europe, about how taxes should be levied in a gig economy, and what defines vulnerability in the new gig economy.

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