The Gig Economy Can Erode Youth Unemployment
The old vision of employment with hundreds streaming through factory gates at 6:30 am is giving way to gigs. Work is changing. What firms need and employees want may remain the same, but how to get it and pay for it is evolving, so the State, trade unions should re-jig in line with job market and labour force reality.
Young workers are not in to get a retirement plaque so gigs — contract work via an app — will aid growth. In 2016, McKinsey reported “162 million people in America and Europe, or more than 20 per cent of the working age population, work outside normal employment,” and a half of those rely on gigs for their primary income, and happily so. (The Economist, November 5, 2016)
What people need from a job may be better satisfied by gigs than a nine-to-five, as many value leisure, flexibility, no boss or time clock, want to see their kids in daylight, and aim to avoid PAYE and bank the gross. As we move to indirect taxes — so suggests this Administration — the gig economy is timely and young workers could be at the forefront of gigs and growth.
The UK has some five million employees in this model, as businesses work to end the problems of peaks and troughs, absenteeism, and low productivity. They aim to simplify processes, for example pay for gigs go to your bank — no mounting paperwork! All have 360 degree information and software allows giggers to swap shifts and more — no hassle. Use of robots, standardized work, task management, means job packaging, so output can be disaggregated to check a worker’s productivity — ideal for gigs. Some wish a nine-to-five — wake 5:30 am, get kids ready, school at 7:00 am, and struggle to get back home by 7:00 pm — but youth wish to own their time, so gigs are fine. All parties interface with an app, which moderates the entire job chain — search, terms, and online exit appraisal of performance, customer satisfaction. All are accountable.
Our unemployment rate in January 2015 was 14.2 per cent, and among youth aged 14 to 24 was 34.5 per cent. It takes some $5 million to create a job and many small businesses only create one; and if a good job offer comes, all bets are off. Many cannot abide the tyranny of a small business — no vacation or personal day, no pension, and at times no money to pay self. Yet going forward career jobs will be few, so gigs will grow, firms will get high-energy workers, and giggers are happy not to be locked in and to get paid gross.
Workers and employers both want flexibility, top productivity and big income, so gigs are ideal. For youth, a job with pension, health care, holiday, gold watch after 35 years, is no better than gigs — flexible, varied work, maximize earnings, and sleep in on Wednesdays.
In 2016, Bloomberg featured Snagajob with 10 million users — bringing “the principle of swipes, geolocation and people-matching algorithms to hourly job recruitment” via a smartphone. And now, teamed with LinkedIn, it offers professional gigs, not just low-end ones.
Contract work gets a bad rap, but let all grow. Private security is often in dispute, but we can flip the script. Firms use gigs for costs, flexibility, good customer experience, rapid growth. So CityHour, Uber, AirBnB did not exist 10 years ago — multi-billion-dollar firms, but own no car or building. They say gig workers are more dedicated, productive, and customers “feel the care”; so what do workers want — variety, quality life, gym at 11:00 am, meet people, pick up sons at school, go to the range, and maximize earnings. Some juggle household chores and gigs, earn more than most, invest, pay into a health scheme, and live. Youth want work to fit their lifestyle; but to older workers the job seems life itself. Youth time now!
The state should facilitate gigs by HEART Trust/NTA courses, good databases, ease of getting documents, and bringing order to the market. Firms create permanent jobs and gigs as needed so do not hassle them. Existing firms must lead as new firms may take years to get to job creation stage. Training make youth gig-ready, so schools should use language courses as Duolingo, Babbel or Rosetta Stone or HEART Trust/NTA may develop apps for smartphone using good English speakers, so we see students on buses with earphones on mouthing good speech models — normal among students in Britain.
Today, the gigger may be a lady driving Uber who does babysitting three afternoons, a relief shift driving a bus on Sunday, and earns good money. You need government ID, smartphone; and for gigs in banking, security, childcare they should get a police certificate. We want maximum regular jobs and maximum gigs, so Cabinet must create the legal framework — no hassle for new bank accounts, and so on. The State and groups must stop fighting down contract work as it is better the youth do gigs than steal. We have never mass-produced career jobs, but if via gigs everyone is earning and gross domestic product is growing. Why fight it?
Michael Lee-Chin should ensure we create “gig apps” for industries, occupations by funding incubators at The University of the West Indies; University of Technology, Jamaica; Northern Caribbean University. Existing firms must be the focus to get quick growth as new investment may take years to create jobs and small firms may create only one job.
The American experience, a la The New York Times, is that in 2010 a new entrepreneur needed US$15,000 to start; a third of all starters would have an “up and running” business in six years and about one in five of these would have employees. The Small Business Association estimates 5.6 jobs are created at “a cost per job of US$31,169”. Thus it takes 16 people entering the start-up process to produce one firm which hires. What do data for Jamaica say?
HEART Trust/NTA should survey firms ready to go gig and what they offer. Young people may take four hours, three days a week, to add to a gig of three hours, five days a week, and so on. No firms should be excluded — services, manufacturing, sales, accounting, hard skills, and unskilled. Then, as Europe increases retirement age to reach near 70 (so pension schemes don’t crash), we too cannot afford to retire proven expertise at age 65. So promote the gig economy. Jobs for youth, jobs for all must increase so we grow and prosper. Stay conscious!
Originally published by Jamaica Observer