The gig economy growing fast
Working from villa in Bali nice but there are pitfalls
All over Australia, people are setting up home offices or renting space in shared offices and going to work for themselves. It’s the “gig economy”, where rather than taking a job with a single employer, workers do jobs for a range of employers at the same time or do short spells of contract work, moving from company to company.
Working like this has long been established practice in things like contracting, writing and design, but it’s moving into other professions as well, such as software development, sales and marketing, admin support, and even the law.
Online platforms such as Upwork and Freelancer.com are connecting people who want work with others who want specific tasks done.
By one estimate — albeit a selfserving one from Upwork — the number of Australians undertaking some form of freelance work has risen from 3.7 million in 2014 to 4.1 million in 2015.
It’s part of a global trend. Intuit estimates that contingent workers will make up over 40 per cent of the US workforce by 2020. It’s a trend that is being driven by a desire to exchange the traditional five day nine to five working life with something that offers more flexibility as a way of achieving the holy grail of worklife balance. Where their grandparents had a job for life, and their parents might have swapped jobs but still had permanent full-time work, millennials, in particular, are seeking something else.
There are also many benefits for employers in the gig economy.
Employers have access to a contingent workforce, who they can pick up at busy times and stand down when they’re no longer needed.
They also don’t have to pay the workers when they’re sick or on holiday or have to cover training, payroll tax and superannuation for them.
And in a significant shift from the centuries-old employment model where the worker provided the labour and the business provided the capital, many gig economy workers pay for their own laptops, phones, desks, offices and so on. But there is a risk that many Australians could pay a heavy price for the added flexibility that the gig economy supposedly brings.
Australia’s labour laws haven’t kept pace with the changing workplace dynamic. Laws ensure that salaried workers have a range of protections, such as being paid a minimum wage and not being required to work unreasonable hours or in dangerous conditions.
Freelance workers have no such protections. While they can in theory reject work, often the reality is different.
In competitive sectors there is often no negotiation over pay, with the freelancers knowing that others will do the job for the same rate and reasoning that something small is better than nothing at all.
Salaried workers in Australia have the benefit of the superannuation system, where an additional 10 per cent of their wage is put into a retirement account for them.
While it’s true that freelance workers can deduct some of their earnings to put into their retirement accounts, the reality is that many will spend their money on more pressing needs. We risk having one group of Australians with large retirement balances to live on and another group with nothing, forced to rely on the increasingly meagre aged pension.
Finally, it is sometimes questionable to what extent workers get the flexibility they want. They can find themselves working through the night or on weekends on an urgent project because they know if they refuse it, the client could go elsewhere.
Even so, when it works it can be great. Ask some of the gig economy workers who have moved their work to seaside villas in Bali for instance, enjoying a standard of living that simply wouldn’t be possible in Australia’s capital cities.