Much has been written about the financial support governments are providing for those who were employed when coronavirus was declared a pandemic by the World Health Organization. But what about the self-employed? How will the gig economy be affected? Will self-employment be an attractive form of work for those who find themselves on the breadline?
In this first of a two-part series, I focus on the impact both to the gig economy and the informal workforce.
Gig Economy: A Mixed Outlook
Gig workers are among the hardest hit economically by the coronavirus pandemic, according to a survey by AppJobs, an online platform that compares app-based jobs around the world. The survey of 1,400 workers across 73 countries found many had to quit their jobs due to a decrease in demand, as well as concerns over their own safety. Among the workers surveyed, some 89% are now looking for a new source of income.
Of course, the pandemic has also provided increased job opportunities for some. With the rise in home delivery — due to people self-isolating or staying at home due to lockdown measures — the need for warehouse staff, drivers and couriers has climbed. With public transportation presenting a heightened risk as workers return to work, ride-hailing platforms could command the market for transport. But if workers are incentivized to return to work by higher rates of pay despite being unwell, this could be detrimental not just for them but also for the wider society prolonging the impact of the virus.
Informal Workforce: WFH Not an Option
However complicated or concerning that may be for gig economy workers in developed countries, 1.6 billion of the world’s 2 billion informal economy workers are also significantly affected by the Covid-19 pandemic, leading to a 60% decline in their earnings. For those workers, stopping work or working remotely at home is not an option and no government support is forthcoming.
According to the International Labor Organisation, between Feb. 1 and April 17 of this year, 108 countries and territories announced at least 548 social protection measures to lessen the devastating impact of lost jobs and livelihoods.
Around one fifth (19.3%) are related to special social allowances/grants, closely followed by measures relating to unemployment protection (15.7%), health (9.5%) and the allocation of food (9.1%).
More than two-thirds of countries in Europe and Central Asia have implemented social protection measures in response to the pandemic, more than half of countries in the Americas and almost half of countries in Asia. In Africa more than one-third of countries have already done so, and about one-third of Arab States (as of April 24).
In my next article, I will discuss the specific safety nets established for independent workers in the US and the UK.