Labour issues in the digital economy

Abstract

Digital work platforms are transforming labor markets around the world. Firms that own, manage and deploy these work platforms have reframed employer–worker relations by defining their core business as the provision of the technology that enables certain services to be provided rather than the provision of those services, and offering their workers independent contractor arrangements rather than employee contracts. This has significant consequences in terms of wages, jobs security and other working conditions. Digital work platforms also increase worker welfare by offering unparalleled flexibility in setting work hours and most permit a workday to be segmented, allowing certain parts of the population who otherwise would not be able to work (due to other commitments or constraints) to have some source of income. At the same time, they pose significant challenges in the labor market. Companies replace employees with contract workers to control costs but this may lead to lower pay, benefits, and job security. Therefore, there is an urgent need for a policy debate on how to best prepare workers for this new reality. This document describes three main concerns: the issue of worker misclassification in digital work platforms, the lack of social security systems for workers in the gig economy that are not considered employees, and the problems that the isolating nature of on-demand work presents with respect to worker organization and the right to collective bargaining.