News / Economic Divide

The gig economy: Hampering wage growth

Friday, 30 June 2017 8:24 AM [ Last Update: Friday, 30 June 2017 8:24 AM ]

The gig economy

The gig economy: not something everyone is familiar with. In some ways, it is an evolving economy. The common understanding: that it is comprised of self-employment or jobs that use independent contractors: that is partly true: those jobs have been around for ages. But to define it as such would be a mistake.

The turning point came when the financial crisis occurred. That increased the rapid pace of gig workers into the economy due to the high unemployment that followed.

In the UK, it’s estimated that there are around 5 million people working as gig workers.

Some of the jobs: food delivery, drivers, and couriers. Then there are specialty jobs like computer technicians and graphic artists.

The gig economy has its advantages. One big advantage: flexible hours, meaning workers can control the times they can work, and how much time they can put into that job. This is while they juggle other priorities in their lives, and can stop where they work at any time.

Just think about it: this in itself changes the economic system.

In the case of employers, they hire when staff is needed, meaning when there is demand, they hire. The flexible nature often offers benefits to employers, as they only pay when the work is available, and don't incur costs.

In the case of employees, works as they go means they can juggle more than one job at a time: they will not be restricted to pay from one source, and can earn money from multiple jobs: the downside is that they miss out on benefits that come with jobs like health insurance.

What is the relationship between capitalism and the gig economy? Capitalism thrives on purchases. But the gig economy has negatively affected that link in which the workers benefited.

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