Think Big: The ‘gig economy’ is growing fast, but we still don’t really know much about it
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Among its many impacts, COVID-19 has providing something of a boon for Australia’s fast-growing gig economy.
And a report this week from Australia’s Actuaries Institutes (AI) highlights the policy challenges that may arise from this new form of work, which provides flexibility and autonomy at the expense of basic employee entitlements.
While most are familiar with the term ‘gig economy’ these days, the AI report attempted to put a dollar figure on the growth of the sector over the last five years.
In 2015, the gig economy contributed $700 million to Australian economy activity.
By the end of 2019, that figure had risen by 800 per cent to $6.3 billion.
The AI paper is one of the first detailed studies commissioned for the gig economy, and as a result the Institute itself said that compiling the data was a difficult exercise.
“Currently it is very challenging to measure the size and growth of the overall gig economy, due to lack of regular data collection at the population level, and an agreed definition of the gig economy,” the Institute said.
But based on the data available, it was able to deduce that transport (Uber, Ola) and meal delivery (Deliveroo, Uber Eats) have been strongly impacted.
However, putting its actuarial skills to work the Institute said the data still isn’t strong enough to build an accurate summation of the industry based on industry participation, demographics and financial risks.
The AI said processes should be put in place to cross-reference employment data sets from the Australian Tax Office (ATO) and the Australian Bureau of Statistics (ABS).
It also recommended that resources should be applied to the generation of targeted industry surveys to learn more about the sector.
While the 2020 numbers aren’t in yet, the AI flagged trends which showed how the pandemic drove a huge acceleration in activity.
“Weekly consumer spending in the gig economy was over 40 percent higher between July and October compared to pre-lockdown levels,” the Institute said.
And for the meal delivery sub-component, the enforced lockdowns in Victoria saw activity double between July and October.
Numbers like that indicate that the use-case for the gig economy has become well established.
Along with the demand-side forces, workers are incentivised to carry out gig economy jobs for a number of reasons, the AI said.
They include flexibility of work, low barriers to entry and the ability to conveniently complement existing income sources.
However, under employment law they are deemed to be independent contractors, which means they aren’t entitled to benefits such as a minimum wage, leave (sick, annual, long-service) or worker’s compensation insurance.
Participation rates also skew to the more vulnerable members of society such as students and the formerly unemployed.
Weighing up the pros and cons, AI CEO Elayne Grace said it’s “increasingly important that we better understand the risks to workers, and how they might impact on future public policy”.
Across the board, more information is required to assess both “the benefits being accrued by gig workers and how the risks they also face are manifesting, particularly as the gig economy evolves under the COVID-19 pandemic”.