The Straits Times says

Planning for when the gigs run out

In Singapore as elsewhere, the onset of the so-called gig economy is an unavoidable aspect of the evolution of work. This economy is composed largely of workers who are neither on company payrolls nor are entirely self-employed. They are non-traditional workers who participate in alternative employment arrangements provided by companies such as Uber, working if and when they wish or need to. The economic agency of such workers was highlighted by a report produced by the McKinsey Global Institute last month. It found that up to 162 million people in Europe and the United States - or 20 per cent to 30 per cent of the working-age population - engage in some form of independent work.

The extensive nature of the gig economy warrants study. There are "free agents", who choose independent work and draw their main income from it. Then, there are casual earners, who choose to enhance their income through supplemental work. There are also "reluctants", who make their primary living from independent work but would like traditional jobs. Then again, there are the financially strapped, to whom supplemental independent work is an act of necessity. These four segments comprise a considerable swathe of the working population.

Beneficially, as McKinsey notes, independent work could raise labour-force participation, offer opportunities to the unemployed, and increase productivity. The sphere of independent work could expand as economic disruption sets in, cannibalising the remit of human labour through advanced robotics and 3D printing. The gig economy might well provide niches of survival in a world where lifelong employment, especially in a single company, is disappearing.

Nevertheless, the crucial question is how workers as a whole will fare in a world of shrinking payroll work. Brookings Institution scholar Mark Muro believes that the expansion of the gig economy, if left to its own devices, might contribute to reducing the share of American workers who can find basic economic security through their work.

In the Singapore context, the gig economy would go against an ingrained social environment in which Central Provident Fund contributions and medical contributions form the cornerstone of economic security, and retirement planning.

For all its laissez-faire attributes, the Singapore economy remains a redistributionist one in which employers are required to compensate employees fairly in a social compact that makes peaceful industrial relations possible in the first place. A gig economy would have no stake in that larger, longer-term social good. Its advent in Singapore cannot be stopped, but its progress can be regulated. Efforts by the National Trades Union Congress to support contract workers and freelancers provide a template for action.

A version of this article appeared in the print edition of The Straits Times on November 08, 2016, with the headline 'Planning for when the gigs run out'. Print Edition | Subscribe