According to Manpower Minister Lim Swee Say, gig jobs are considered temporary/contractual jobs sourced on online platforms through an intermediary. These intermediaries aim to match or connect service buyers with workers who take up these short-term or piecemeal jobs. What sets gig jobs and freelancers apart is the use of such online platforms to find work. Unlike gig workers, Freelancers do not actively use online platforms to look for work. Some examples of Freelance jobs include swimming and music teachers.
The gig economy primarily consists of new jobs that are characterized by their short-term and on-demand nature. New jobs in the gig economy include delivery drivers, private car drivers, multimedia artists, web developers and the like. These new jobs give workers more options to choose what they want and can do, coupled with the improvements in technology over the past decade or so further helped spread these opportunities to everyone. Mobile apps such as FoodPanda and Deliveroo allows for anyone to work in delivery, so long as they own a transportation vehicle. Uber and Grab allows for anyone with a license and a vehicle to earn extra income by becoming a private car driver for hire.
The attractiveness of gig jobs lies in the fact that gig jobs allow workers to personalize their work timings to suit their own preferences and need and this cannot be found easily in traditional 9-5 jobs. Workers in the gig economy have the freedom to choose when to start their work, to take a break or to end their work; such flexibility and choice cannot be found in normal office jobs nowadays. Office jobs often lack proper work-life balance because overtime work is commonplace.
Gig economy is growing fast but at an alarming rate in the business and IT industries. In a list of top jobs for the gig economy by CareerCast, Contract Accountant (1st), Management Analyst (6th), Software Developer (9th) and Web Developer (10th) are ranked in the top 10 (Rahim, 2017). According to a Toptal survey, 760 business executives out of 1000 expect the use of contingent talent to increase in the next 3-5 years, a jump from 51% that was surveyed in 2014 (Kearns & Younger, n.d.). In this fast-changing economy, firms have to adjust and form teams much faster, placing pressure on traditional hiring and talent acquisition mechanisms (Kearns & Younger, n.d.). The gig economy, on the other hand, provides firms and companies with easier and more cost-effective options of “outsourcing” jobs to gig workers.
1.2 Gig economy around the world
Many countries have seen a boom in such gig businesses, especially with the weak job market due to the recent recession.
Taking the case of the US, where 34% of the workforce is engaged in gig economy , we can see the growth of this economy reaching previously niche sectors such as law, with companies like LawDingo being able to make use of an idea “Uber for Lawyers”, which are contract attorneys, even going as far as attracting fresh graduates to work for them (Gabrielle, 2017). The idea that graduates favour gig jobs can be evident with college students being the most knowledgeable and heaviest users of the gig economy (Derrick, 2016).
In Japan, there is a rise of “freeters”, people who make a living by working part-time. Japanese graduates are opting for such work, due to especially poor working conditions in regular employment. On top of that, the lead up to the 2008 financial crisis had companies in Japan overworking their regular staff, concurrently hiring part-time workers to do menial work. In summary, graduates who do not wish to be ‘exploited’ like full-time worker paired with shrinking full-time jobs, opted to be freeters instead (Keiji, 2005). To top it off, there is also a shift in the mindset of Japanese youths, leading to a more mobile and entrepreneurial business climate in Japan, since corporate jobs are no longer as secure as they used to be. (Yumiko, 1999)
The prevalence of the gig economy in many countries around the world have paved the way for Singapore to join in the phenomenon. Hong Kong is a country very similar to Singapore in economic structure, where it mainly relies on finance and trade, and due to its small size, has to rely on manpower for economic growth.
Taking the example of Hong Kong, since the 2008 Financial Crisis, it has resulted in changes to the job market there, Hong Kong’s millennials became more receptive towards contract jobs, coupled with the increase in contract jobs, as well as the rise of the sharing economy caused a booming gig economy scene (Soo, 2017), giving hope that the same may happen in Singapore as well.
1.3 Gig economy in Singapore
As more and more people are starting to use delivery apps such as FoodPanda and Deliveroo, traditional hawkers and food centres are seeing a fall in the number of people patronizing. Critics of private car hire have also mentioned that apps such as Uber and Grab are competing with traditional taxi drivers for business and that these startups are ‘stealing’ the income of taxi drivers due to their popularity.
There are currently about 200,000 freelancers here in Singapore as of 2016, representing 9% of resident employment. Of the 200,000 freelance workers, around 84% of them are primary freelancers, workers who freelance as their main job, including private-hire car drivers, private tutors, and insurance agents. The remaining 16% of freelancers, representing about 1.5% of resident employment, work freelance part-time on top of their usual job, including students and retirees who take on side jobs for additional income.
As of July 2017, there are over 50,600 applications for the Private Hire Car Driver’s Vocational License, increasing significantly from the 10,500 applications from August 2015 to July 2016. About 47% of Institute of Technical Education, 35% of polytechnic and 10% of university graduates went into part-time, temporary or freelance jobs in 2016 – more than double of that a decade ago. Singapore may see a 59% growth in the share of contingent or contract workers over the next three years, according to a study by Willis Towers Watson. This is due to companies being more likely to look to adopt automation, together with changes in companies’ systems and processes will drive demand for highly-skilled, contract-based specialists.
2. Objective of Report
A weak job market after the 2008 Financial Crisis has led to the gradual rise of the gig economy in Singapore, with a growing percentage comprising of young graduates and millennials. However, the rise of the gig economy would have to be managed, as it could lead to problems of having insufficient savings to carry such workers through retirement, placing gig workers at risk.
“Facilitated by technology, we can expect the gig economy to keep growing. There is potential upside, there is potential downside too.”
Mr Lim Swee Say, Minister for Manpower
The biggest concerns stated by freelancers, according to the Ministry of Manpower, are in order: income security, lack of assurance of payments and savings for retirement. Despite such concerns, many graduates are still willing to take up such gig jobs.
With choosing to take up such gig jobs, there are both merits and demerits, not just on the individual, but it might have a larger impact on the economy as well. The benefits can be clearly seen in the provision of jobs for people in the weak job market, and providing supplementary income resulting in a larger disposable income.
What cannot be clearly seen are the implications, where many jobs in the gig economy do not contribute to Central Provisional Funds(CPF), thus lacking a safety net in the future, where it might lead to groups of Singaporeans not having sufficient savings. It might not seem like a huge problem now, but in the near future, these gig workers would not have CPF to help with their retirement therefore leading to larger social implications.
Through analysis of the above literature reviews, if the government starts to regulate gig economy to give more benefits and protection to the millennials, we believe that the trend of graduates choosing to pick up gig jobs in the Singapore would increase in the coming years, together with a booming gig economy. This can possibly be accounted for by the flexibility such gig jobs provide among the many reasons. However, there are many demerits to such gig jobs as well, and without proper measures in place to curb these mitigations, the rise of the gig economy may become detrimental to Singapore in the long term instead.
Why would graduates look towards gig jobs after graduation? Is the gig economy a boon or bane? And if it is a bane, will this be a long term problem, or can it be resolved in the short term allowing for the gig economy to be an essential part of Singapore’s economy? These are some of the questions that we aim to address with this report.
We plan to understand first-hand why graduates would choose to pick up such job and using that data, we might be able to better advice on the long term implications in the economy at large.
For our study, we opted for the use of an online questionnaire for the purpose of understanding on a general level, an undergraduate’s thoughts when job hunting. We wanted to understand the possible considerations for the undergraduates when picking a job, as well as learn about any possible interests in the gig economy.
3.1 Online Questionnaire
We choose to adopt a cross-sectional online questionnaire with our sample group consisting of 82 students in higher education. Typeform was chosen as the platform on which the survey was going to be conducted due to convenience of use, as well as being able to generate reports on the data.
The questionnaire first aimed to understand the demographic of our sample group, and asked questions about their age and gender, etc. We then asked about what our sample group would look for and consider when searching for a job. Following which, we aimed to understand the sample group’s viewpoint towards gig jobs, and aimed to find correlation between the considerations when searching for a job and the willingness to take up gig jobs.
3.1.1 Sample group of students
To get our sample group of students, the survey was shared through social media platforms such as Whatsapp and Telegram. The sample group came from people whom the survey was spread to and shared with. The survey would take about 3-5 minutes to complete. The time period where our survey data was taken from was from 13th October 2017 to 22nd October 2017.
3.1.2 Organisation of data
The raw data was compiled into a Typeform Report, where the data could be seen in the form of bar graphs, representing the percentage of the answers that were chosen, as well as the actual numbers of people who replied. This can be seen in Diagram 3.1(Annex C). Where it can be seen that 52% of the undergraduates who took the survey were males. For ranking questions, an average was also given in the report, allowing for an easy way to see the mean data.
For some multiple choice questions, a bar graph may not be the best way to analyze such data. For example, for our question on the most important consideration when picking up a job, we used a pie chart to organize the data instead, allowing us to clearly see which consideration was the most important, as seen in Diagram 3.2 (Annex C).
3.1.3 Analysis of data
Whilst analyzing the data, it was noted that there might have been a slight amount of biasedness in the surveys done towards the response, due to our questionnaire topic being on the gig economy and majority of our responses come from the IT and Business undergraduates(where gig economy would thrive more so than specialised field like nursing). However as we were looking to study general trends, and looking at what is most important to graduates in general, outliers in the data were largely disregarded as they do not accurately depict the viewpoint of the majority but instead a minority group.
3.2 Strengths and Limitations of the methodology
By opting for an Online Questionnaire for our methodology, we understood that choosing such a methodology would come with its own strengths and limitations, which we would analyze and take into account in our findings.
By using an online questionnaire, we were able to send out the survey quickly and efficiently, allowing for a fast collection of data. Also, as the survey was online, we were able to reach out to undergraduates from a myriad of schools which we could not have done so if it was a pen and paper survey.
The data from the online questionnaire could also be very quickly and easily quantified. The quantified data then allows for ease of comparison between our data and other research, to be able to see and learn about change in behaviour or thoughts of undergraduates over time.
Due to the anonymity of the survey, biased response was minimized, as there would be little to no pressure to give an ideologically sound response.
Due to the short time period the survey was sent out, the sample size was restricted to people who accessed the survey during the time, not allowing for a larger sample size of students whom the questionnaire may not have been spread out to.
As mentioned earlier, due to the topic of the survey being on gig workers, the bias can be seen based on what the students are studying, for example, business students may be more inclined towards the gig industry as there are many possible freelance and gig jobs in the business industries.
Based on the data collected from our survey of 82 student respondents, we have noticed the following
4.1. Shift in importance for job security and work-life balance
4.1.1 Job Security
Respondents were given a multiple choice questions regarding what they considered was most important, following this multiple choice question is a short answer question where we hope to gain more insight to the reason why they thought their choices were the ‘most important’
According to a 2013 survey done by Our Singapore Conversation of 4000 Singaporean(Peace, 2013), one of the top three priority for Singaporean was Job Security however we could see a shift over the years, in 2016 it was found that the top motivator for job hunting due to Job Security has fallen to only 17% and the reason for job retention due to Job Security was only 26%(Channel News Asia, 2016).
After surveying 82 university respondents we found that Job Security has once again fallen in ranking, it is a concern for only 11% of the surveyees (Diagram 4.1, Annex C). Our findings is further supported by Singapore Business Review(SBR) article which states that Job Security has become less of a concern for millennials today, Randstad Employer Brand Research (REBR) also noted that previously 61% of the respondents had placed importance on Job Security, it has since fallen to 42%. REBR hinted that this fall in importance ranking for Job Security might be due to increased millennials in the workforce(Singapore Business Review, 2017).
4.1.2 Work-life balance
What’s interesting is that in the same SBR article, we can see work-life balance moving up the importance ladder from 32% to 57% taking the second spot in ‘Top 10 Attractiveness
In order to understand what is truly going on in the millenials’ mind, in our survey, we introduced ‘Freedom and Flexibility’ which is the freedom to stop work or do a job switch whenever one liked and the flexibility to work whenever one wants to.
Surprisingly, when this option was given 21% of our respondent placed high importance on it and only 16% placed an importance in work-life balance. Freedom and Flexibility takes second spot after Income and Work-life balance takes fourth spot after Job Satisfaction(Diagram 4.1).
From our short answer question, many agreed that Freedom and Flexibility is the most important because they want more control of their life, such as how many hours for work and where do they work from
4.2. Living wage expectation gap
While 43% of our survey respondents strongly felt that an average income of $5000 is necessary for survival in Singapore, based on a Graduate Employment Survey for NUS, NTU and SMU, graduates of these universities should instead expect to earn a median salary of $3,300 per month (Teng, 2016) while 73% of SIM students would hold an average salary of $2,766. (The Straits Times, 2017). In fact, 1 in 3 graduates quit their first job within 6 months citing reasons of “desire to earn a higher wage” 47% of the time(Cheng, 2017).
Realistically speaking, an average income of $1,197 excluding rent(Numbeo.com, 2017) would have been sufficient to live in Singapore, but why would undergraduates feel a need to have an income almost 5 times than necessary?
We could perhaps reasoned that the high expected living wage is due to the rising cost of university tuition fee(Todayonline.com, 2016) and the loan university undergraduates have to pay off in the years following graduation. Not only that, we have to account for inflation and their want for a higher standard of living.
In any healthy economy, some inflation is always necessary to encourage people to spend. In Singapore our inflation rate has been on a rising trend and will peak at 1.9% by 2020 year on year(Statistica, 2017).
Thus with such high expectations for living wage and a decent expectation gap, it is no wonder 56.1% of the respondents would choose to take up gig jobs to complement their future existing ones(Diagram 4.2, Annex C) and depending on the type of gig jobs picked, the additional pay may be sufficient to meet the undergraduates expectation of $5000(Diagram 4.3, Annex C).
As a matter of fact, all of the 6.1% of undergraduates that cited ‘Maybe’ stated that they would want to pick up gig jobs, but only if it was not time-demanding.
Although most of our respondents would still pick traditional jobs over gig jobs, there is no denying that 78% of them will consider or have considered holding a gig job(full time or part time) with 36% believing that gig jobs might bring in more revenue.
4.3. Employee benefit and CPF contribution
4.3.1. Employee benefit, important for a different reason
According to an Employment Confidence Survey conducted by Glassdoor in 2015, nearly four in five employees value additional benefits over a pay increase. Additionally, younger employees aged 18-34 (89%) and 35-44 (84%) prefer benefits or perks to pay raises when compared to those aged 45-54 (70%) and 55-64 (66%). A significant finding in this survey is that of the different kinds of benefits, healthcare insurance, vacation time off, performance bonuses, paid sick days, and retirement plan and/or pension are ranked higher than a flexible schedule to an employee.
This finding is supported by a 2016 survey conducted by global recruiting firm Hays, it was found that the top motivator for job hunting in Singapore is salary or benefits. Further proving that generally when looking for a job, Singaporeans do look at benefits and salary more than a positive work-life balance or freedom and flexibility.
Our findings supported both surveys when 79% of our respondents find employee benefit very important or important while just 5% found it unimportant.
Yet at the same time, our findings opposed both survey when majority of the 79% also agreed that annual leave is the main reason why employee benefit is appealing.
4.3.2 Employee benefit and CPF will be the trigger for gig economy
For traditional jobs in Singapore, both employers and employees are required by law to
contribute a certain amount of the employee’s monthly salary into their CPF account. Employers are required to contribute between 7.5% to 17% and employees between 5% to 20% monthly depending on the employee’s age. This is just one example of employee benefits that are provided by traditional jobs. Other benefits include, individual performance bonus, annual leave, medical insurance coverage, and dental benefits.
Hence when given the question as to which jobs undergraduates would pick, traditional job won by about 10%(Diagram 4.4, Annex C).
But this result flipped when we told respondents that gig jobs would be given the same CPF contribution and insurance benefit, however there will be no other benefits such as performance bonus or paid sick leave(Diagram 4.5, Annex C).
We deduced that employees likely chose traditional jobs over gig jobs because of the employment benefits they provide. In traditional jobs, employees do not have to worry about their medical coverage or whether can they take paid leave for vacation. On the other hand, workers in gig jobs are not covered by the same benefits extended to employees of traditional jobs. Workers in gig jobs have to pay for their own medical bills and when they do go on vacation, they are deprived of their salary because it depends on whether they are working or not.
Therefore respondents agree that they will consider doing gig jobs full time if it provides the same CPF contribution and benefits such as medical insurance coverage. An increase from 40.5% to 59.3% who would take on a gig job without CPF and insurance benefit.
4.4. Uncertainty regarding career paths
A study done by Young Academic, a student and education news based in the United Kingdom found that 1 in 5 graduates are unsure of their career path. This trend is also found in the US where fresh graduates are unaware of their career opportunity and are unsure of how to apply their skill set(LaBombard, 2016).
Back home, a survey done by Happi found that one in three or 32.5% of Singapore millennials were unsure or regretted choosing their tertiary education. 30% of graduates who left their job in the first year cited that they wanted to steer their career in a different direction(Cheng, 2017).
It would seem that graduates or undergraduates generally are unsure of what they plan to do with their degree.
Therefore it is not surprising to know that two-third of the respondents would prefer to take up a gig job in situations like these(Diagram 4.6, Annex C). In fact, since gig jobs are often short-term, these jobs provides opportunity for a switch once a term ends, leaving more rooms to explore the market and eventually once a graduate is sure, he/she could settle down in a field that he/she liked.
5. Discussion and Analysis
From our survey result, we are certain that if the government were to provide more benefits and protection, such as insurance, for the millennials in the gig economy, we will see a migration from traditional jobs to gig jobs (3.2 Employee benefit and CPF will be the trigger for gig economy). To further justify our point, a survey done by PwC, in United Kingdom, found that more people will consider going to gig work if they had better protection(Burgess, 2017).
Our first point (1.1 Job Security) have proven that less emphasis is placed on job security today. This means that undergraduates don’t value keeping their job for a long time as much, perhaps due to Gen-Y characteristic of being impatient and exploratory when it comes to career and jobs, in fact a research by SIS International Research stated that ‘Given a choice, Gen-Y would choose to switch job every couple of years’.
On top of that, our fourth point(4. Uncertainty regarding career paths) proved that generally, one third of the graduates are unsure about their career paths and career choices. Hence gig economy would prove to be a valuable field for them to explore.
Finally, our survey result and hypothesis differed when it came to the reason why undergraduates considered gig economy. We initially believed university students chose the gig field because of the flexibility and freedom it can provide hence flexibility and freedom is of utmost importance to university student. However according to our survey, income still remains the utmost important, with 31.7% ranking it first, in fact 59.5% would still prefer traditional job and 62.2% will consider taking a gig job to supplement their full-time income (Diagram 4.5, above). further proving that undergraduates would rather have more money and less freedom to themselves.
6. Further Analysis
The presence of gig economy will be a boon for Singapore and we should learn how to embrace this trend else we will lag behind in progression due to the changing societal mindset and the multiple business cycles we would soon experience with rising standard of living.
Instead of adjusting to work like the Gen-X did, Gen-Y employees want work to adjust to them. As Louis Efron said “Millennials don’t want jobs. They want lives.” add this to the fact that millennials will soon represent 40% of the workforce and 40% of the total workforce in 2020 is predicted to be engaged in the gig economy (French, 2017). We can see a rising urgency to incorporate the gig economy to our economy.
Truth to be told, perhaps our populace have already started its migration towards gig economy hence causing our unemployment rate to rise about 0.7% in the last quarter.
Gig economy will not only be big, but it would also help with our recession, when there is a gig economy going on, people who needs a job could simply go onto platforms like Uber and be a private hire in a matter of minutes, instead of having their livelihood taken from them the moment they are sack, they could go online and source for alternative work, guaranteeing a constant stream of some form of income.
Adding on, small, medium enterprises (SMEs) could benefit from gig economy as well. Singapore have been very supportive of SMEs, providing some form of funds every now and then. However SMEs might not be able to afford the best talents with attractive pay and benefits like the transnational multi-corporations(TNCs) could and hence would also be on the losing end when it comes to hiring talents.
Gig economy hence provide a platform for these SMEs to quickly go online and find the talent they need, contract them for only a short amount of time, giving these talents some form of experience while being able to source for cheaper work themselves.
Veritably, according to Princeton university, “94% of all new jobs created in United States between 2005 and 2015 came about through the gig economy.” we can definitely see a great potential in the gig economy.
It is also worthy to note that with the rise of gig economy it has fueled the rise of shared offices, especially so in the UK, the world’s largest market for serviced offices. Even in Hong Kong, such markets for shared offices have boomed(Evans & Fedor, 2016). Likewise in Singapore with our constraint on land space, the ideas of shared offices would definitely help alleviate our land use problems
7. Stakeholder Analysis
In this portion of our report, we will be examining the impact and implications of the rising trend of gig economy to the following stakeholder: 1) Government, 2) Business, and 3) Workers.
Tax revenue is the primary income for most countries and can be used for the development of a country. As a result, a main concern for many governments is usually how much tax revenue they are able to receive, whether it is from businesses or individuals. Gig workers are considered as self-employed workers and contractors and their tax contribution often depends on their own declaration. Self-employed workers and contractors tend to under-declare their income because they do not have a fixed income and they do not have to pay as much if they declare lesser. This will present a concern to the government because the under-declaration of income by self-employed workers will result in a fall in tax revenue for the government. The Internal Revenue Service (IRS) of USA attributes almost US$200 billions of its annual tax gap of US$450 billion to underreported individual business income (Mount, 2016).
Across literatures on tax avoidance, it is widely agreed upon that tax avoidance will result in social and economic consequences for the country. A study done by Crane and Nourzad (1986) showed that tax evasion is positively related to inflation. Timms (2015) further stated that tax evasion poses a bigger problem for developing nations because tax revenue accounts for a greater share of state income and the government often lack the resources required to tackle this issue.
The rise of the gig economy also facilitated the increasing exploitation of employees by their employers, whether it is traditional or gig economy. With the welfare and concern for their citizens at the forefront of public policy, governments will be more inclined to intervene and regulate the gig economy to protect their citizens. These interventions and regulations often require high amount of capital and resources that is taxing for the country. Coupled with the fall in tax revenue, these regulations will eventually become too taxing for the government to handle.
When choosing to employ gig workers instead of traditional employment, businesses run the risk of employing gig workers that are less committed to the company’s vision, culture, and less motivated to learn new skills (Dixon, 2016). This is because gig workers do not feel connected with the company because they are considered as self-employed workers and contractors and hired only when there is a demand. This is echoed by Andrea Broughton, a principal research fellow at the Institute for Employment Studies, that gig workers may feel less involved in the business than their permanent colleagues (Martindale, 2017). Marissa Poole, director of operations at Zirtual, suggests that permanent workers usually have more stake in a company’s success and would want to grow with the company. Conversely, this cannot be said for gig workers because their on-demand employment means that their employment will end once their work is completed. Thus, there is no need for them to align to the company’s vision and culture because they often change their company.
The on-demand nature of gig economy also presents a problem for businesses as they are unable to train and discipline their gig-workers because they are independent workers. The nature of these gig workers is such that they will only be called in when their help is required. Thus, companies usually end up not hiring the same gig worker as before. The constantly changing workers will make training hard for the businesses as they have to constantly train new gig workers from scratch. It is estimated that up to US$200 billion is spent on employee training each year (Dixon, 2016). A report by the Association for Talent Development (ATD) found that on average, US$1200 is spent on employee education and training in 2013 (Miller, 2014).
This section examines workers as two separate groups – gig workers and traditional workers.
For traditional workers, there may be concerns over job insecurity and low-income due to the threat of being replaced by gig workers (Cameron, 2016). With the rise of the gig economy, we see that more and more jobs are being replaced by gig jobs – the cheaper alternative. As a result, workers in traditional economy tend to be more insecure about their job prospect as they do not know when will they be replaced by gig workers. Furthermore, some businesses have exploited these insecurities of workers by threatening them to take a pay cut lest they be replaced by the cheaper option of gig workers. This is further echoed by Professor Roberson of Edinburgh Napier University, who stated that the flexibility of human resources and technological advancements allow for companies to scale up and down their business easily and outsource work (Robertson, 2017). Flexibility of human resources (in this case, the availability of gig workers) allows a company to be more inclined to switch from permanent workers to gig workers because it gives them the scale up (hire more) and scale down (hire less) as and when they want instead of being trapped in contractual agreements with permanent workers.
For workers in the gig economy, their primary concerns lie in the lack of employee benefits and protection that are guaranteed for their peers in the traditional economy. In a report by Congressional Research Service (Donovan, Bradley, & Shumabukuro, 2016), it is found that the most common employee protections that are affected when workers do not have a traditional employment relationship are minimum wage, overtime compensation, unemployment compensation, family and medical leave, employer payroll taxes. Gig workers are seen as independent contractors and hence employers do not have the obligation to provide them with the same benefits are full-time workers. Furthermore, many of these gig workers find their gig jobs through online platforms that act as a ‘middleman’, connecting the jobs to the workers, which means that they are not technically the employers. In a survey done by Ernst & Young, it is found that 63% of gig workers are worried about a lack of paid vacation or sick/personal leave, 40% are uncomfortable with a lack of health care benefits, and 20% worry about the lack of retirement benefits (Storey, Steadman, & Davis, 2016).
Another concern for gig workers is the lack of career development. Most of the gig jobs are menial work and these gigs do not equate to career. Without a focus around career development, it will have an impact on a worker’s stability and satisfaction and this might result in a macro effect to the country (Charlton, 2015). Furthermore, with the increasing trend of graduates turning to gig jobs instead of traditional employment, it might facilitate a group of highly-educated but low-skilled workers. These group of workers lack experience and on-the-job experience which will affect their overall career development.
Based on our findings and analysis of our stakeholders, we have identified the key area to target as the benefits and welfare of gig workers. While the trend of people turning to the gig economy is just starting, the group believes that it is necessary for the government to regulate the gig economy to ensure that gig workers are not exploited.
The current situation is that gig workers are not provided with the same welfare and benefits – those of which are extended to their permanent employment peers. These welfare and benefits include paid sick leave, medical and insurance coverage etc. This is because gig workers are considered to be independent contractors – a category of workers that are not covered under the Employment Act in Singapore and thus not entitled to welfare and benefits. Taking a page out of the recent review of the gig economy by the United Kingdom, the Singapore government can similarly come up with a separate category under the Employment Act, to cover the category of gig workers. By recognising gig workers as a category under the Employment Act, the Singapore government can then come up with regulations for the gig economy to ensure that gig workers have their rights as well.
As most of today’s gig workers look for their gig jobs through online platforms and applications such as Uber and Task Rabbit, the government could perhaps look at regulating these companies to ensure that they provide medical coverage or insurance for their gig workers. The common argument that these companies give is that they are merely a “middle-man” that connects workers to jobs and thus they should not be providing welfare and benefits to the workers because they are not technically the employers. The government can introduce regulations to enforce that gig workers that use these applications are considered to be workers for these companies. Further regulations can ensure that basic medical coverage and insurance must be provided for these gig workers to cover any illness or injuries they sustained while on the job.
A second possible regulations that the government can look at is ensuring that full-time gig workers of a company have a minimum wage requirement or starting pay requirement. Many companies have been known to take a certain percentage or cut of their gig workers’ pay as a commission. As a result, many gig workers may earn a lot lesser than what they should be earning because of the exploitations by these companies. Thus, the government can introduce a regulation that provides a minimum pay/starting pay for gig workers. This regulation will ensure that gig workers earn a minimum pay once they have worked for a certain amount of time for the companies in a particular month. This regulation is aimed at reducing the exploitation of a gig worker’s pay by their parent companies in the name of “commission”.
The gig economy has undoubtedly resulted in benefits and costs to Singapore’s economy and society. With graduates seeming being more open to jobs in the gig economy, it may lead to the gig economy exp
anding in the years to come. Through this report, we have explored how undergraduates view the gig economy, as well giving us insights into what in the gig economy is attractive and what isn’t. Many parts of the gig economy are not properly regulated, due to insufficient research into the area, and many areas are banned by the government. This can be attributed to the lack of research studies and case studies of the gig economy in relation to Singapore.
The rise of the gig economy has been seen as a boon, especially in recent years, with the provision of jobs in the weak job market. Regulation on the gig economy without enough examination and studies, might result in the positive aspects of the gig economy not fully maximised, leading for there to be a deadweight loss due to market failure. However, lack of proper regulation of the gig economy may lead to problems as well, as seen in the Case of Uber and Grab affecting the Taxi business in Singapore.
It was studied in this report that with proper regulation, the gig economy can be a vital part of a country’s economy. With the correct regulation and steps put in place, the rise of the gig economy in Singapore can be managed, allowing for its benefits to be reaped at a minimal cost. This report has pinpointed the factors allowing for the continued growth of the gig economy, and by utilising that data, we hope that the gig economy can prove to be advantageous to Singapore’s economy.