Gig Economy turning into a race to the bottom for employees
The Gig Economy in the UK is showing signs that it is definitely here to stay, given the fact that it is the perfect location for finding gig workers, courtesy of the UK’s position as a major technological hub in the market. Be it any kind of business relationship, there should be a two-way street. Both, the employer and the employee should be satisfied with the outcome of the task and as a result, the employees should get the pay that they deserve. However, the scenario is quite the opposite when it comes to the gig economy.
Understand the Scenario
A majority of gig workers and other part-time workers take loans for the unemployed on benefits because they are not able to procure satisfactory wages. Moreover, the fact that they do not know for how many hours they would be working for and the uncertainty involved with gigs. They also cannot enjoy health insurance coverage and other benefits that they might get in a regular job, which is why they need to pay for all of this out of their own pocket. When it comes to the gig economy, workers are typically employed for a short duration of time and the market remains quite active for hours. Once workers decide to leave a company, they do not face a cash crunch since they usually work on short-term gigs so the wage hit is short-term as well.
On the other hand, with the advancement in technology, there is a lot of clarity about the productivity of workers, which allows employers to see how well they are working and how much time it takes for them to complete a task. The employer can also easily assess the quality of these gigs. This is beneficial for the employees as well since they can bag better jobs in the market by knowing their true potential. The traditional power that the majority of employers have over their employees is also diminished. However, the gig economy might look like a pot of gold at the end of the rainbow, the real scenario is quite different.
Since there are plenty of workers in the market, there is a lot of competition, because of which wages are dipping lower. This is the real drawback of the gig economy. Since there is direct exposure to the market, wages are less likely to be stable. Gig workers offer their skills and labour at competitive prices through companies, which provide platforms and compete with other workers. The competitive nature of this industry is what is creating downward pressure on wages and is highly impacting the working conditions of employees. While there are numerous benefits involved in terms of flexibility to work, there is also a lot of concern, especially when it comes to workers who have lesser skills in comparison.
Prices can vary significantly and they solely depend on the current demand and supply in the market. The wages are extremely low when there is an excess of supply and low demand. Since plenty of workers are competing for wages, the prices for these gigs keep plummeting lower and the only one benefitting from this is the employer. Therefore, the assurance of steady income is hampered, which traditional jobs generally provide. This also has two sides:
- Some might be happy while having a steady, yet low income
- While, others might be happy leaving that behind
The fact is that most employees choose these jobs according to their own preferences, but if a majority of jobs start turning into gigs, workers would not have the choice and would be compelled to work on gigs.
How is the Gig Economy in the UK impacting Traditional Industries?
Traditional industries are facing a major disruption in the market because of the gig employers who are new entrants in the market. Another concerning factor is that a large number of employers in the gig economy have little to no concern for workers and their conditions. The entire concept of paying for per task endangers the rights of workers.
The companies who hire gig workers themselves claim that they are merely giving workers a platform to connect with customers yet they still seem to find loopholes to exploit workers rights and increase their own profit margins, which only leaves employees with the resort of taking loans to make ends meet. While it may seem like a very insignificant win, it is still admirable that courts and authorities in the UK are showing compassion towards gig workers and are working towards eliminating unfair business practices when it comes to gig economy.
Overall, it is a serious matter that the low-quality working conditions of the gig economy might have a negative impact on the overall wellbeing and mental health of workers. While loans for the unemployed on benefits can truly be beneficial for such workers and help them to pay their bills on time and be able to afford commodities, the bigger picture portrays that the condition of the market should improve.