ias-toppers-gig-economy
Editorial Simplified

Gig economy & India’s informal sector workers [Editorial Simplified]

There is a wide range of positions that fall into the category of a “gig”. It has its own pros and cons. In the changing scenario of economy, it would be the effective change in India.
By IASToppers' Editorial Board
August 11, 2017

Contents

  • What is gig economy?
  • What Factors Contribute to Gig Economy?
  • Positive Aspect of Gig Economy
  • Problems: India’s Informal Sector Workers are Facing
  • Conclusion

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GS (M) Paper-3: “Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.”

 

What is gig economy?

  • In a gig economy, temporary, flexible jobs are commonplace and companies tend toward hiring independent contractors and freelancers instead of full-time employees.
  • A gig economy undermines the traditional economy of full time workers who rarely change positions and instead focus on a lifetime career.

ias-toppers-gig-economy-uber

What Factors Contribute to Gig Economy?

  • In the modern digital world, it is becoming increasingly common for people to work remotely or from home.
  • This facilitates independent contracting work, as many of those jobs do not require the freelancer to come into the office to work.
  • Employers also have a wider range of applicants to choose from, as they do not necessarily have to choose to hire someone based on their proximity.
  • Employees often find that they need to move around or take more than one position in order to afford the life style they want.
  • Economic reasons also factor into the development of a gig economy. In many cases, employers cannot afford to hire full-time employees to do all the work they need done, so they hire part-time or temporary employees to take care of busier times or specific projects.
  • People also tend to change careers many times throughout their lives, so the gig economy is the reflection of this occurring on a large scale.

ias-toppers-gig-economy-works

Positive Aspect of Gig Economy

  • Ola and Uber drivers are the first informal sector workers to be immersed in new-age tech.
  • Their work is organized around data, timestamps and geo-references, making it traceable and trackable.
  • Algorithms that run platforms also systematise parts of work unlike in previous non-tech work.
  • Processes and protocols were never a part of their previous work as lorry drivers, chauffeurs or drivers based at traditional stands.
  • Rides come continuously.
  • Payments come in regular intervals, partly in hand through cash, partly in banks, expanding savings from the near to the mid-term.

Problems: India’s Informal Sector Workers are Facing

Editorial gettyimages-496816114

  • According to the union, drivers are put under control and supervision amounting to employment, but neither do they enjoy their flexible work nor they receive benefits.
  • As informal sector workers who know how to maintain continuity in income, falling incentives have upset their calculations of spending, saving and repaying debt.
  • The same algorithms that give drivers a written history of work and earnings also allow companies to be faceless.
  • Legal contracts that safeguard future income (preventing untimely dismissal) and future savings (provident funds) have not been available to them.
  • A country wide skilling and job crisis leaves these informal, semi-skilled workers with limited work options- driving, with low barriers of entry, is vital here.

Conclusion

  • There is a wide range of positions that fall into the category of a “gig”. It has its own pros and cons. In the changing scenario of economy, it would be the effective change in India.
[Ref: The Hindu]

 

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