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Insight: How the Gig Economy Transitioned from Part-time Opportunity to a Flourishing Industry

(Art by Jericho Louise Clemente)

Freedom, double-edged as it is, lies in the heart of the freelance, or gig economy. The sector draws creatives who choose independence over a rigid 8-hour daily work schedule and refuse to be limited by an office setup.

Though it has evolved into many faces and has involved a variety of workers, the gig economy traces its roots to the financial crisis in 2009, when many earned income not by traditional jobs but by taking “gigs”, or several part-time jobs when opportunity comes.


What was once born out of necessity is now an increasingly attractive option for some who choose to escape the conventional nine-to-five. The World Development Report 2019 reports that globally, the total freelancer population is estimated at around 84 million, or less than 3 percent of the global labor force of 3.5 billion. This number counts those freelancers who may also engage in traditional employment. The world’s largest freelancing platforms—Freelancer of Australia, Upwork in the United States and Zhubajia in China have a total of 60 million users, but only 10 percent of the registered users in these avenues are active.

Most of them come from India, Bangladesh, Pakistan, United States, the Philippines, and the United Kingdom. Intuit and Emergent Research even predicts the number of gig workers in the U.S. to double in the next four years, bringing the number of gig workers up to 9.2 million in 2021. In Asia Pacific, 84 precent of talent managers hire or use freelancers, based from a report of KellyOCG, the outsourcing and consulting group of Kelly Services.

A case study by PayPal demonstrates some insight into what leads more workers into the gig pool, and con rms much of what we already know about the freelance scene: According to freelancers in the United States, they dove in because they want to be their own boss, work from anywhere, choose projects they can enjoy and have exible schedules.

Working two-way, employers also embrace the gig economy because of the reduced cost, supervision, and  even tax avoidance. Businesses are increasingly choosing gig workers rather than long-term employees who may exit soon, especially with studies saying that younger employees are more likely to leave their organization within five years.

Moreover, the evolution of gigging into a main source of income is also a result of employer’s demand and convenience. Employers look for individuals with specific set of skills and sometimes fail to find them within their circle. For example, the 2018 Growth Barometer puts the scarcity of skilled talent as a setback for many US companies than for those in other countries. With the unemployment in the U.S. at a 40-year low, the internal talent pool does not suffice, hence the need for freelancers.

The World Development Report 2019 reflects this need for human capital. Many jobs in 2019 will require specific talents — from technological know-how, problem-solving, and critical thinking to other skills like perseverance, empathy and collaboration. Gone are the days of staying in a single job or a single company. This will offer more doors for gig workers who o er a diverse range of abilities.

The gig system is also anchored in the inevitable technological innovations, which have altered the way people work and their terms. The digital infrastructure made it easier to source on-demand services. Ridesharing, for example, Asuqu in Nigeria bridges creatives and other experts with businesses across the continent. Tutorama, based in the Arab Republic of Egypt, connects students with local private tutors. A good study as well is Andela, a U.S. company that specializes in training so ware developers. It has trained 20,000 so ware programmers across Africa using free online learning tools. Once qualified, these programmers work with Andela directly or join other Andela clients across the world.

Even in countries where technology is slow in progress, gig workers who belong in the informal sector thrive. The World Development Report says, informal work persists on a vast scale in emerging economies, as high as 90 percent in some low- and middle-income countries. Informality is prevalent in these countries with regulations, taxes, and social protection schemes that some entrepreneurs may nd burdensome. The informal sector, however, comes with its consequences: no written contracts, no health or unemployment insurance schemes, and none of the protections provided to formal workers, putting gig workers in a regulatory gray area.

These challenges will apparently persist in the next few years. Around 30 percent of the workers by 2020 will be comprised of contingent workers — including contractors, temps and the self- employed, according to the Gig Economy Data Hub by Cornell University and the Aspen Institute.

This only proves that the gig economy needs to rede ne itself with the system’s evolution over the years, as well as a rethink of social protection. There have been moves around the world to provide cloaks of protection for gig workers. For one, in the United States, there are calls for the establishment of a third employment category for gig workers. Labor and economic experts Seth D. Harris and Alan B. Krueger say they will fall under the category, “independent workers”.

In their proposal, independent workers — regardless of whether they work through an online or o ine intermediary — would qualify for many of the bene ts and protections that employees receive, including the freedom to organize and collectively bargain, civil rights protections, tax withholding, and employer contributions for payroll taxes.

Developments in freelancers payment and tax transactions can be expected. In Shenzhen, China for example, the tax bureau is initiating a blockchain project with WeChat Pay, a mobile payment platform many gig workers rely on to get paid. Transaction information will be shared with the tax authority in real time for tax records.

Insurance is also being worked out. Ant Financial, the largest financial technology company in China, launched in April 2018 a welfare program for small shops and self-employed workers, many of whom are gig workers. These workers can avail of free health insurance as long as they use AliPay, the payment product of Ant Financial, for transactions.

It’s a system that’s far from perfect, yet the face of freelancing continues to evolve according to changing work habits, needs, and technological advancements. In any case, the growing number of freelancers and its subsequent opportunities only prove the gig economy’s viability as a legitimate means of livelihood for the rest of the world.


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