Think Big, Think Gig: How the Gig Economy is Affected by the Pandemic

Wisteria | March 2nd, 2021

You hear the familiar sound of the motorcycle slowing down in front of your gate, and the driver calls you out to receive your parcel. It was the last thing he needed to deliver to reach his quota for that day. This scene is the most prevalent form of gig work in our country’s current situation. When the pandemic first surfaced and the lockdown took place, there was an imminent danger looming over the country’s labor force.


As of December this year, the unemployment rate of the country jumped to a staggering 8.7 percent, compared to the previous year’s 4.5 percent. Consequently, the number of unemployed persons rose by 1.77 thousand to 3.81 million. Despite the crisis, some businesses found themselves booming, especially with the general public’s increased reliance on digital platforms and the mandatory lockdown being placed in the previous months. In this situation, the short-term and independent contract work of the gig economy became a beacon of hope for the country’s workers.


What is the gig economy?

Gig economy or gig work is not a new concept. Before, it was commonly known as the “freelance economy” or the “agile workforce” because of its flexible and temporary characteristics. It’s a good alternative for those who would opt for an independent and short-term line of work rather than sticking to a 9-to-5 job that would sometimes pay just as much as a gig does.


Employers in a gig economy setting are nontraditional because gig workers often set their work hours and choose their next gigs. In this set-up, it is difficult to point out who the employers are specifically because the nature of their work is to simply connect the contractors and their consumers. The gig economy covers a wide range of jobs - the most commonly known form are courier services but it can also be in the form of online selling, virtual tutoring, and other short-term and specific jobs.


How is the gig economy in the Philippines?

The country ranked sixth in the ‘Global Gig Economy Index’ in 2019 as one of the countries with the fastest developing market for the gig economy. The country’s earnings from freelance work showed a 35 percent increase. According to the report, Filipinos are involved in different types of gigs including “data entry/internet research, virtual assistance, and customer service” with data entry work having the highest percentage of engagement at 34 percent while customer service had 8 percent.


Because of the COVID-19 pandemic, businesses are obliged to adjust to the new system that must ensure the safety of both their consumers and employees. There was also a visible downsizing of the active workforce because of the losses incurred over the lockdown.


Consequently, workers would have to explore other alternatives for their livelihood. The shift in the workplace urged Sen. Sonny Angara to file the Senate Bill 1469 or the National Digital Careers Act last May to boost and reinforce virtual careers. He claimed that freelancers are still able to earn, while also being able to work at their own pace and in the safety of their own home. Employers also benefit from hiring freelancers since it would yield lower costs and a bigger talent pool, according to Angara.


For the gig economy to thrive and for the people to bring back their livelihood through digital careers, the bill seeks to institutionalize the new employment standards appropriate for the current setting.


The Downside of Gigs

Because gigs are only short-term, workers in this field lack the stability usually expected from one’s main source of income. The Philippine Statistical Authority even classified the workers of the gig economy under the underemployed labor force for expressing their desire for more hours of work, or an additional source of income.[a]


Gig workers are also not included in the coverage of the Labor Code of the Philippines. This means that workers may not be able to experience protection against work violations, contract breaches, or the failure of employers to pay their dues. There’s also no guarantee that gig workers will be able to receive the basic labor rights in the Labor Code such as 13th-month pay, healthcare benefits, and retirement pay.


The gig economy is one of the industries that were left unscathed by the pandemic. It’s convenient and accessible, and can sometimes pay just as much as traditional work arrangements. However, the workforce must first be secured and institutionalized through a legal framework for it to become a solution for the country’s employment crisis.[b]


References

Hasnan, L. (2019, October 9). Philippines’ fast growing gig economy. The ASEAN Post. https://theaseanpost.com/article/philippines-fast-growing-gig-economy


Madell, R. (2020, January 17). What Is the Gig Economy? Definition, Pros & Cons, Jobs. FlexJobs. https://www.flexjobs.com/blog/post/what-is-the-gig-economy-v2/ 


Nagamora, J. (2020, May 6). Spare by the Virus: The rise of the gig economy during the COVID-19 Pandemic. ASEAN-Australia Strategic Youth Response. https://aasyp.org/2020/05/06/spared-by-the-virus-the-rise-of-the-gig-economy-during-the-covid-19-pandemic/ 


Yumol, D. (2020, May 21). DOLE estimates 10 million workers will lose jobs this year due to COVID-19 pandemic. CNN Philippines.

https://www.cnn.ph/news/2020/5/21/dole-estimates-ten-million-workers-will-lose-jobs-covid-pandemic.html 


Trading Economics. (n.d.). Philippines Unemployment Rate. Trading Economics. https://tradingeconomics.com/philippines/unemployment-rate



Keyword: C19AS, gig economy

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