Syllabus
GS Paper 3 – Indian Economy – Issues relating to development and employment.
Context
The Karnataka government’s plan to introduce legislation for the welfare of gig workers is a welcome and necessary step.
Source
The Hindu| Editorial dated 23rd July 2024
A case for regulating gig-based work
The Karnataka government’s plan to introduce legislation for the welfare of gig workers is a welcome and necessary step. This initiative is crucial for addressing the specific challenges faced by gig workers and ensuring their rights and protections are upheld. By targeting the pervasive myths and systemic issues within the gig economy, the proposed Bill aims to create a more equitable and transparent environment for these workers.
Types of Gig Workers
- Freelancers: Paid per task.
- Independent Contractors: Paid on a contract-to-contract basis.
- Project-based Workers: Paid by the project.
- Temporary Hires: Employed for a fixed duration.
- Part-time Workers: Work fewer hours than full-time employees.
Benefits of the Gig Economy
- For Workers
- Offers more flexibility, autonomy, income opportunities, skill development, and inclusivity.
- For Employers
- Provides access to a diverse talent pool, lowers fixed costs, enhances scalability, and improves customer satisfaction.
- For Customers
- Delivers more choices, convenience, quality, and affordability.
Concerns Associated with the Gig Economy in India
- Lack of Formalization: Many gig workers operate in the informal sector, limiting their access to credit, government support programs, and other resources.
- Lack of Legal Protection & Social Security: Gig workers are not covered by labour laws and lack protection against workplace harassment, discrimination, and unfair termination.
- Payments, Incentives, and Growth Models:The absence of a minimum wage guarantee affects worker stability and growth opportunities.
- Lack of Training and Upskilling: Many gig workers lack the necessary skills for their jobs.
- Social Stigma: Gig work is often viewed as temporary and low-paying, with a lack of societal recognition.
- Increase in Voluntary Unemployment: Some individuals prefer the autonomy and flexibility of gig work over traditional employment.
- Disruption of Work-Life Balance: Gig work can negatively impact sleep patterns and daily activities.
- Lack of Job Security: Workers are typically engaged on a project or assignment basis, leading to job insecurity.
Karnataka Bill Addressing Myths of the Gig Economy
Myth 1: “No Boss”
- Claim: Aggregators promote the idea that gig workers have no boss and are considered “partners” or “captains.”
- Reality: The algorithm and local team managers dictate work conditions, hours, order deliveries, cancellations, ratings, and even terminations. Workers, in reality, face stringent monitoring and control, contrary to the notion of being their own boss.
- Legislative Response: The Karnataka Bill mandates aggregators to disclose algorithmic parameters that affect work allocation, denial, categorization, and usage of personal data, thus reducing algorithmic control and empowering workers.
Myth 2: Flexibility
- Claim: Gig workers enjoy flexible work arrangements.
- Reality: True flexibility resides with employers, not workers. Incentive schemes force workers into mandatory login hours to earn sufficient income, stripping them of any real flexibility.
- Legislative Response: The draft Bill includes provisions for fair contracts, income security, and the right to refuse work without penalties, enhancing the position of gig workers who lack both employee protections and independent contractor freedoms.
Myth 3: Part-time Work
- Claim: Gig work is part-time, providing supplementary income.
- Reality: Studies show that 96% of cab drivers and 90.7% of delivery workers rely entirely on gig work for their income, often working over 10-11 hours daily.
- Legislative Response: The Bill mandates social security for gig workers, acknowledging their full-time commitment and providing support for old age, health shocks, and other events.
Gig Economy Regulatory Framework in India
- Code on Wages, 2019: Mandates a universal minimum wage and floor wage for all sectors, including gig workers.
- Code on Social Security, 2020: Recognizes gig workers as a new occupational category.
- Dedicated Social Security Fund: Extends social security benefits to gig workers.
- Motor Vehicle Aggregator Guidelines, 2020:Entitles gig workers to term insurance of Rs 15 lakh and health insurance of Rs 10 lakh, with annual increases of 5%.
- Government of India’s Stance: Although it endorsed platform workers’ rights at the G-20, the Code on Social Security offers minimal protections and detaches gig workers from essential labor rights.
- State Initiatives: Rajasthan has passed legislation for gig workers, with Karnataka, Jharkhand, Tamil Nadu, Haryana, and Telangana following suit.
Suggested Way Forward
- Overtime Payment Beyond Regular Hours: Platforms should pay overtime for hours worked beyond the stipulated “regular” hours due to the physically intense nature of the work.
- Payment of Minimum Wages to Platform Workers: Gig and platform workers should be treated as employees and receive minimum wages.
- Preserving Work Flexibility for Gig Workers: Social security design for gig workers should maintain their work flexibility.
- Stronger Social Security for App-based Workers: Government oversight is needed to ensure fairness in the algorithms and mechanisms used by platforms.
- Welfare Board for Gig Workers: Establish a welfare board to support gig workers, with mandatory registration details provided by aggregators.
- Addressing Occupational Health Hazards: Provide essential safety training and equipment, especially for high-risk roles.
- Addressing Mental Health: Companies should promote work-life balance and encourage taking breaks.
Conclusion
The gig economy, while offering numerous benefits, also presents significant challenges, particularly in terms of legal protection, social security, and work-life balance for gig workers. Addressing these issues through comprehensive regulatory frameworks and supportive measures is essential to harness the potential of the gig economy while ensuring fair and secure working conditions for gig workers.
Related PYQ
Examine the role of ‘Gig Economy’ in the process of empowerment of women in India. [ UPSC Civil Services Exam – Mains 2021]
Practice Question
Discuss the impact of the gig economy on workers, employers, and customers in India. Highlight the regulatory framework and the associated challenges for gig workers. [250 words]