The Gig Economy is Built on Sand

The Gig Economy is Built on Sand

  • mdo  Admin
  •   Articles
  •   August 9, 2021

Software solutions are replacing jobs, leading to more gig-work. Automation and robotics are reducing jobs, leading to more wealth inequality and gig-work. In a study commissioned by Upwork and Freelancers Union "it is predicted that the majority of the U.S. workforce will be freelancers within a decade (by 2027)." Increasingly people are turning to gig-work on the internet to find income. It may seem easy and that there is an endless stream of opportunity available, but what are the barriers to entry and what really is the quality of opportunity available?

The Gig Economy and Modern Freelancing: The Gig Economy is a growing segment of the real world economy that features precarious working conditions like low pay, low hours, and lack of benefits as work moves online. "Estimates show as much as a third of the working population is already in some gig capacity. Experts expect this working number to rise" (Investopedia). Many people work several gigs.

Read more, all about the Gig Economy, here:

Categories of the Gig Economy include: Ridesharing Gigs (ex. Uber/Lyft), Delivery (ex. Doordash), Tasks (ex. Taskrabbit), Freelancing, Selling (ex. Etsy), Tutoring, Caregiving, Online Surveys (wrought with fraud) , Asset Renting, Selling Digital Assets, and Entertainment Streaming (ex. YouTube, Twitch, Spotify).

One reason why the Gig Economy is so fast growing is that it is easy to jump on board, all you need is a Smartphone and Internet access to download an App or visit a website. However, that's no guarantee for income. While a lot of gig platforms purport a bounty of opportunity, a feature of Gig work is typically low hours and low pay and a lack of benefits: On a popular Freelance gig website called Fiverr the typical pay for one gig task is $5 as you compete against hundreds of other gig workers. Another example of low pay is the example of 99Designs, where freelancers must join a competition against hundreds of other designers with only a potential to earn if selected as the winner. In research related to the task gig platform "Mechanical Turk" "the average worker earned roughly $2 an hour". Since most of the work is a form of freelancing (independent contractor) there are also no benefits as seen in a traditional economy. Some gig-work platforms attempt to maximize profitability by cutting worker rates and cutting benefits which can lead to a reduction in quality of services provided.

With increasing competition for the gigs themselves comes increasing inequality, such as on Spotify. The same issues of low pay, lack of benefits and rising inequality appear in the Creator Economy.

But what Freelance work pays well? According to the top 5 are as follows: 1. Web designer. 2. Computer programmer. 3. Graphic designer. 4. Tutor. 5. Marketing specialist. The competition is very high and all of these require significant time and access to specialized education, training, software, and often times special equipment. In another case, and although very high in competition, creating a portfolio of digital assets to sell on marketplaces like envato could eventually lead to a significant source of income:

What methods are individuals left with to find income? Donations for publishing content such as writing blogs and publishing software tools. Here similar problems arise, where individual creators don't have a large marketing budget and can't get much awareness. Donations must be done through companies like Paypal creating several extra steps on the seller and buyer sides, making donations unlikely and rare. Social Networks are experimenting with paying per post... this may seem like a great idea at first and could prove lucrative for some, but it is really a bad idea because it will only further increase wealth inequalities.

In summary, the quality of opportunity is very low for finding income on the internet, and it is getting worse. What is happening is that there are new economies arising out of digital technologies, but there is no foundational income floor to better support individuals and encourage proper innovation.

What is needed are policies that enable Digital Economic Inclusion. DIGICEN defines Digital Economic Inclusion as ensuring everyone has access to the variety of tools necessary to participate in the economy and society, while encouraging democratic participation and social entrepreneurship. The necessary tools include: a foundational income floor, such as a Universal Basic Income (UBI), freedom to use the CBDC, access to Internet-enabled Devices and Apps (Universal Access), and access to Democracy Technology, such as Voting Helper Apps. Digital Economic Inclusion cannot work without a commitment to diversity. Participation in the economy and the access to personal financial empowerment tools also enables the time and resources for increased Social Entrepreneurship, projects that work towards societal-improvement, and planetary-betterment both locally and globally.

DIGICEN advocates for Digital Economic Inclusion and the Digital Economic Inclusion Innovation Cycle, Learn more here:

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