Is the gig economy harming its workers’ well-being?
July 13, 2017
If you’re like most people, you probably wish you had more money. Sure, you could ask for a raise or take on another job, but your income would still be limited by the salary you agreed to or the number of hours you’d be permitted to work. You could get around this by starting your own business and paying yourself whatever you want, but there are no guarantees you’d even make a cent.
Fortunately, the “gig economy” addresses these issues by allowing people to monetize what they already have on their own terms, in their own time. Apps like Uber, AirBnB, and TaskRabbit are enticing because your earning potential is nearly infinite: the more rides you give, guests you host, or tasks you complete, the more money you make. The option to work as needed offers a level of convenience and flexibility that seldom exists in the traditional workplace, but it’s not without costs.
The dangers of on-demand employment
Although the gig economy has enabled millions of people around the world to be more entrepreneurial and maximize productivity in their spare time, it hasn’t been the most supportive of its workers. Here’s why:
- Workers aren’t always entitled to employee benefits. Because they aren’t paid a salary, gig workers are considered self-employed contractors. This means human resources isn’t required to provide them with health coverage, pension planning, or any other employee benefits. Similarly, they aren’t protected by the legal structures that grant employees basic rights in the workplace.
- Workers can be easily exploited. A number of factors can limit workers’ ability to avoid exploitation. First, it’s harder for them to communicate and assemble because they are spread out over vast geographical distances and rarely get the chance to meet each other or their “employers”. Secondly, workers are commonly students, people supporting their children or parents, or otherwise low-income earners who have neither the time nor resources to advocate for themselves. Lastly, there are no permanent contracts to guarantee wages, and the rate per gig is often quite low.
- Workers aren’t guaranteed work. This is especially the case in smaller towns and rural areas where there isn’t enough volume to keep gig supply and demand balanced. If no one is around to request a service, workers have no way of getting paid—regardless of how dedicated or resourceful they are.
- Workers may be less equipped to save for retirement. It’s hard to save money when income is as sporadic and unpredictable as it is in the gig economy. Moreover, unlike salaried employees, gig workers aren’t typically given pensions, company contributions to their 401(k) plans, or access to retirement planning resources.
- Workers’ primary motivator is often money. Without employee benefits, opportunities for professional development or career advancement, or even a strong corporate culture to belong to, there may be few reasons for gig workers to feel positive about their jobs. The perks of flexibility and convenience quickly become overshadowed by all the points mentioned above, leaving a paycheck as the main reason many workers continue to accept gigs.
- Workers are at risk of increased stress and burning out. Lacking limits on hours worked, a reliable work schedule, and overtime pay can cause people to work far more hours doing gigs for less money than they’d earn as full-time employees. The absence of job security compounds the problem and may result in higher stress, anxiety, depression, and other mental health issues for workers—not to mention reducing their capability to make ends meet.
How organizations can bridge the gap
Of course not all workers in the gig economy are facing these problems, but every employer owes their staff a basic level of support when it comes to workplace wellness and employee well-being. Some of the ways they can do this include:
- Providing a livable minimum wage.
- Limiting the number of hours worked, and/or offering overtime pay.
- Building a healthy, positive workplace culture that celebrates and cares for all workers, not just salaried employees.
- Suggesting alternative work when gigs are unavailable.
- Developing an assistance program workers can use to improve their overall well-being.
The final point is particularly important for organizations that hope to maximize staff engagement and sustainable growth. Workers who are healthy and happy tend to be more productive and loyal to their employers.
If your organization is looking to improve staff well-being, we have the solution. LifeSpeak is a digital library of 1,500+ expert-led videos, podcasts, and tip sheets that provide practical advice on topics ranging from proper nutrition and exercise to mental health, parenting, and financial stability. Workers can access LifeSpeak 24/7 from any mobile device, computer, or tablet, and use is completely anonymous and confidential. Our goal is to equip workers with the tools they need to live more fulfilling and healthy lives so they can be focused and engaged at work. For more information on how we can help your staff thrive, book a demo today.