Q. Define the concept of ‘gig’ economy and discuss its impact on labour market and workers’ social security net.
UPSC Sociology 2024 Paper 1
Model Answer:
Gig Economy
The ‘gig economy’ refers to a labor market characterized by short-term contracts, freelance work, and temporary positions, facilitated by digital platforms connecting service providers with consumers. This model significantly impacts the labor market and workers’ social security.
Impact on the labor market:
1. Flexibility and autonomy:
• Workers choose their hours, tasks, and clients
• Allows for better work-life balance and multiple income streams
• Can lead to unpredictable schedules and income volatility
2. Job insecurity and income instability:
• Lack of long-term contracts creates uncertain employment prospects
• Income fluctuates based on market demand and platform algorithms
• Challenges financial planning and credit access
3. Skill development:
• Promotes adaptability and diverse skill sets
• May hinder deep expertise development
• Replaces traditional career ladders with fluid progression
4. Labor market fragmentation:
• Divides workforce between traditional employees and gig workers
• Can exacerbate socioeconomic inequalities
Impact on workers’ social security net:
1. Limited benefits:
• Lack of employer-provided health insurance, paid leave, and retirement plans
• Shifts social protection burden to individual workers
• Challenges employment-based social security systems
2. Weakened collective bargaining:
• Independent contractor status limits unionization
• Reduces power to negotiate working conditions and benefits
3. Regulatory challenges:
• Labor laws often ill-equipped for gig work
• Creates legal ambiguities and potential exploitation
4. Individualization of risk:
• Workers bear economic uncertainties and market fluctuations
• Contrasts with risk-sharing in traditional employment models
In conclusion, the gig economy fundamentally shifts labor relations, challenging traditional work and social security concepts. It requires reevaluating labor policies and social protection systems to address gig workers’ unique vulnerabilities.
