Economy & Tech
20 July 2021
Discussions on the merits of the gig economy are spreading across the globe as temporary, flexible jobs are now commonplace as well as companies’ stance toward the hiring of independent contractors and freelancers instead of full-time employees.
Such flexible, temporary or freelance jobs often involve connecting with clients or customers through an online platform, which is why many working in the gig economy refer to their jobs as platform work.
First, it is a difficult task to estimate the size of the gig economy since much of the work may be underreported. A case in point, consider the fact that more than one-third of the Chinese labour force receive additional income by working extra jobs in the gig economy, and moreover, about 10 per cent of the Chinese workers use the gig economy as their main source of income. Nevertheless, the sector is very large and only growing.
As a caveat, it is rather surprising that China – the contemporary country in the world which is supposed to exemplify communist ideals, the social state and taking care of the working class – is the same one with the largest share of the gig economy.
In comparison, Sweden has the lowest share of the gig economy, and the government there has become the most stalwart in defending and extending the safety net provided by the state which is often lacking from this sector.
The gig economy has ballooned in Central Europe over the last decade with easily-recognised brands populating the streets and our apps for the convenience we have grown accustomed to, but for some in the industry, the impetus behind gig employment may not be so clear.
Roughly 10 per cent of the working population in Czechia are caught in the so-called Czech insolvency cycle.
These people are usually indebted to private companies or other creditors to such an extent that they actually have no prospect of paying off the debt as the Czech insolvency laws are quite strict when it comes to declaring bankruptcy; you must prove that you can pay back 30 per cent of the debt, which for most is an impossibility.
Moreover, in many instances, the original debt has been multiplied by factors of 2 all the way up to 10, which is why repayment is not feasible.
Thus, for this rather large portion of the working population, having regular employment does not really make sense, and they look to gigs often in the grey economy. However, these people are also the most vulnerable to exploitation and could use the benefits of government security which is currently lacking in the gig economy.
Whether or not there is a larger portion working in the Czech gig economy is therefore unknown, but there could be alternative reasons for some European economies display lower numbers of gig workers than many would expect.
On the other side of the channel, there is the UK – an undoubtedly capitalist and developed society. There the gig economy offers the same benefits as elsewhere (flexibility, freedom of choice, etc.), but it also has a very high level of social care and standards provided by the government.
Nevertheless, the difference between permanent employment and freelance work is notable in the United Kingdom.
If – for unfortunate reasons – someone working in the gig economy must solely rely on government assistance, it will only be a few hundred pounds a month which can barely cover your rent or mortgage payment, while a company is obliged to pay your wages if you are on leave for legitimate purposes (e.g., due to illness, accident, etc.), benefits a freelancer would miss out on.
Regardless of some of the drawbacks mentioned above for workers, the gig economy will most likely increase its share in the coming years.
There are potential alternatives such as hybrid models where some work is more regular, but not full-time and can be supplemented with the gig economy. This type of model could be especially attractive in Central Europe as it offers a marriage between the capitalist and socialist models while allowing for more regulation in the labour market and hopefully less exploitation.
This is a summary of a discussion with Albin Sybera (Analyst and Visegrad Insight Fellow) and Zsuzsanna Szabó (Journalist and Visegrad Insight Fellow) at the New Europe 100 Forum 2.0 on 10-11 December 2020, edited by Galan Dall, Editor-at-Large of Visegrad Insight. Find out more about the New Europe 100 network here. For updates, follow us on Facebook, Twitter and LinkedIn.
The interview is part of a project supported by the International Visegrad Fund.
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