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The Gig Economy Is So Much Bigger And More Complicated Than You Think

Great attention and concern has been generated in recent years about the ‘gig economy’: the many thousands of individuals who perform various tasks and jobs for pay (‘gigs’), organised through web-based apps and platforms.

Some celebrate the flexibility and autonomy of gig work. Others worry that minimum standards (like minimum wages) will be sacrificed in the rush to a digital labour market.

One big problem inhibiting the discussion over how, if at all, to regulate the gig economy has been a lack of reliable data on gig jobs. Traditional labour market statistics (like those issued every month by the Australian Bureau of Statistics) don’t specifically report on gig jobs. So researchers and policy-makers have had to guess about how many gig workers there are -- and how well they are paid.

Now, thanks to an inquiry into the gig economy launched by the Victorian state government, we are finally getting some answers. This week, the inquiry (headed by Natalie James, formerly the Fair Work Ombudsman for Australia) released initial results from an unprecedented survey of gig workers. The results shocked many observers; here are some highlights.

Gotta get dat bread...
How many gig workers are there?

The on-line survey questioned more than 14,000 adult Australians from all regions. (All respondents had to have access to the internet.) Of that total, almost 1000 (or 7 percent) reported having performed some kind of platform-based gig work within the last year. Another 6 percent of respondents have performed gig work in the past, but not within the last year.

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What are the most popular platforms?

The survey asked gig workers to list the platforms they worked for. Not surprisingly, the most common were the well-known transportation, food delivery and odd-job apps: Uber, Uber Eats, Freelancer, Deliveroo, and Airtasker. Most gig workers worked for one of those “big five” platforms. But there are a great many other diverse platforms -- about 100 in total -- engaging other gig workers.

Is this the new-look staff meeting? (Image: Getty)
What jobs do gig workers perform?

Driving passengers and delivering food are the most common forms of gig work. But there are many other occupations being affected by gig practices: from professional services (like accounting) to creative design, skilled trades (like electricians) to home care for persons with a disability. The low-cost business model pioneered by early platforms like Uber is now being copied many other jobs.

How much do gig workers make?

Proponents and critics disagree passionately over whether gig workers make decent wages or are badly exploited. The Victorian survey suggests that both may be right. A few gig workers (mostly in professional services and skilled trades) report earning more than $50 per hour. But many others report very low wages. Shockingly, 40 percent of gig workers didn’t know how much they made.

In the most common occupation -- ride-share and food delivery -- median wages were just $20 per hour. And remember: that’s before the worker’s own expenses. Ride-share drivers cover their own vehicle, petrol, insurance and other costs. After those expenses, income for most drivers will fall far below the national minimum wage (which rises to $19.49 per hour on July 1).

Very professional, five stars.

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How many hours do they work?

While a surprising proportion of adults perform at least some work for digital platforms, their hours of work are typically very short. Almost half of current gig workers work fewer than five hours per week. And almost half sign on less than once per week. Only about one in six gig workers (or a little more than 1 percent) rely on a digital platform for the majority of their personal income. For most platform workers, gigs are a way to earn a few extra bucks -- not a way to truly support themselves.

So... what does it all mean, exactly?

The Victorian survey confirms that the practices of the gig economy are spreading through all regions, and dozens of occupations and industries. If its findings are accurate, then gig jobs now represent a significant and growing share of total employment.

To put the trend in perspective, consider that about 62.5 percent of Australia’s adult population is employed in any given week. The Victorian survey indicates that 7 percent of adults performed gig work in the last year: more than half at least once per week, the rest less frequently. That implies that around 5 percent of adults perform gig work in any given week -- and that, in turn, constitutes about one-twelfth of total employment.

IT, hold please.

The growth of gig work, and the very low pay earned in many (but not all) gig occupations, may therefore help to explain some puzzling quandaries in recent labour market statistics. On one hand, the Australian economy has created a lot of new jobs in recent years. On the other hand, wages are growing more slowly than at any time since the end of the Second World War.

The growth of the gig economy may help to explain this apparent contradiction. Yes, a lot of people are working gigs -- and the practice is spreading to more and more occupations. But average hours are very low, and hourly incomes for many are well below legal minimums. So while the gig economy is certainly contributing to Australia’s total job creation, its impact on incomes and standard of living is more questionable.

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It will require creative thinking by policy makers to make sure the growing number of gig workers in Australia actually has a chance of earning a decent income. Top priorities will be ensuring basic standards are met (like minimum wages) and giving gig workers more stability in their hours. Perhaps the Victorian inquiry, newly armed with this fascinating survey data, can come up with some answers.