As coronavirus makes freelancing popular, govt must make wage policies, safeguards for gig workers

Updated: Jun 12, 2020 5:34 PM

The disruption of 'stable jobs' in the Covid-19 aftermath and technological commotion has potentially disrupted the employment landscape of the country, pushing it towards a transitional phase by replacing older molds of work with a new one.

migrant workers, agri rural economy, industrial centres, Larsen &Toubro, Covid-19 pandemic, NSDC, living conditions of workers, Dharavi, skilling programmesThe numbers are large—even if around 60-70% of about 100 million migrants go back to the states where they were employed, that is 60-70 million people—so there can be no overnight solutions. (IE photo)
  • Deepak Sood

The disruption of ‘stable jobs’ in the Covid-19 aftermath and technological commotion has potentially disrupted the employment landscape of the country, pushing it towards a transitional phase by replacing older molds of work with a new one. This new work environment includes rising numbers of digitally connected, highly-skilled specified freelancers or ‘gig’ workers who have been welcomed wholeheartedly by the employers worried about the bottom-line in a highly competitive business today. A report by ASSOCHAM puts the annual growth rate of gig economy at 17 per cent and predicts that it will touch $455 billion by 2023.

Even before the coronavirus pandemic ravaged the world with the loss of lives and economic activity, creating mass unemployment, across the world and in India, technological advances like robotics and Artificial Intelligence (AI) had pushed the low-skilled workers to the brink of unemployment. The Fourth Industrial revolution underlined the use of technology, while disrupting the job market.

What’s been said so far?

The gig economy is termed as one of the biggest trend impacting the future of work by World Economic Forum (WEF). It is supposed to revolutionize the way we work by reshaping careers and the way we do business. It afforded certain flexibility to companies to appoint a worker or a freelancer with the required skill for a short duration, saving the cost of appointing a full-time employee with an additional
financial burden such as wages, overtime, provident fund, insurance, and other fringe benefits. Also, with the young workforce – read Millenials and GenZ – in their talent pool and wanting to have a different lifestyle than their parents prefer to associate with the gig economy owing to benefits such as flexible timings and choice to engage in multiple jobs to enhance income.

Post Covid-19

Now with Covid-19 creating havoc with the established, structured and formal ways of doing business, the shift in the job market is a given. The scope of the Indian Gig economy would shift significantly, moving from the large number of blue-collar jobs to start including various white-collar jobs as well. While contract workers in factories and low-skilled jobs struggle with high incidence of unemployment, the knowledge economy stands to benefit from the gig framework.

As per a report, India faces a loss of 135 million jobs, due to the pandemic, leading to a 35 per cent rise in unemployment in the country. Also, the technological adoption done by the companies to facilitate employees to work-from-home has augmented the out-of-the-box thinking for Indian businesses resulting in newer ways to reach out to candidates with requisite skills. Workers or freelancers can procure multiple projects or gigs at the same time, thereby increasing their income manifold. Owing to the current pandemic and consequent technological push, the trend of having senior roles, including some CXO-level roles, as part of the gig economy, is expected to become a reality sooner than anticipated.

A survey conducted by WEF says that companies in India are open to the possibilities presented by new technologies and digitization and are optimistic about the future. It is imperative at this juncture when the labor market is going through a tectonic shift to gauge the impact of the growing gig economy on a country like India. As per reports, the share of the gig economy in the Indian services sector is close to 25 per cent and set to grow at a rapid pace post-pandemic.

Digital Future

If given proper impetus, the increased digitization and technological adoption have the potential of creating greater jobs and economic inclusion. However, it will require high-skilled employment opportunities and equally skilled labor force. The rapid transformation that has taken place during the lockdown needs to be capitalized to create a level-playing field for all segments of the society from low-skilled to high-skilled laborers and also provide opportunities to hone skills for upward mobility. The emergence of domestic and international freelancing digital platforms will also prove as a game-changer, especially for the expanding knowledge economy. Indian government’s impetus to startups and digitization will help in better opportunities at income generation online and will also help in the matching of the skilled workers to the job digitally.

Do we need a policy for gig workers?

The answer to the above question is yes. As the share of the gig economy rises northwards, it is vital to bring a protective umbrella for this segment of the workforce. The government needs to put the policy framework in place to guarantee a direction in terms of wages and other benefits. This would be geared to protect the rights of these freelancers and contract workers as per the International Labour Organizations diktat. While the western countries have already taken the lead in formulating the rights of the gig workers, India should follow the lead. However, India has a unique ecosystem, and policies should be tailored to suit the requirements. In its endeavor to create an inclusive future of work in the country, the Government should include the Indian industry as a key stakeholder in formulating the policy framework.

  • Deepak Sood is the Secretary-General, ASSOCHAM. Views expressed are the author’s own.

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