Eh Sayers Episode 4 - Who Wins and Who Loses in the Gig Economy?

Release date: January 7, 2022

Catalogue number: 45-20-0003
ISSN: 2816-2250

Eh Sayers podcast

This fourth installment of Eh Sayers focusses on the growing market of gigs and their place in an ever-changing landscape of job flexibility and/or instability. What are the socio-economic benefits and drawbacks of a gig worker and how are they affected by COVID-19? As more people work remotely and the workday structure changes due to the pandemic, how will the Canadian economy reflect these changes moving forward? Paul Glavin, associate professor, Department of Sociology at McMaster University discusses the impact and acceleration, freedom and limitations for gig workers across the nation.


Tegan Bridge


Paul Glavin, Department of Sociology McMaster University

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Eh Sayers Episode 4 - Who Wins and Who Loses in the Gig Economy? - Transcript

Tegan: Welcome to Eh Sayers, a podcast from Statistics Canada, where we meet the people behind the data and explore the stories behind the numbers. I'm your host, Tegan.

Have you ever heard of the gig economy? If you've ever taken an Uber or a Lyft or hired a freelancer through an online platform, you've participated in the gig economy and hired a gig worker.

Gigs are paid work that don't fall under the umbrella of traditional employer-employee relationships. Gig work can include small tasks, think chores or errands, or short or long-term contracts. This includes some self-employed freelancers and on-demand workers who are usually hired for specific jobs through online platforms, such as Uber or TaskRabbit.

One branch of the gig economy is the platform economy. To find out more, we spoke with Paul Glavin.

Paul: I am Dr. Paul Glavin associate professor of sociology at McMaster university.

Tegan: How would you define the platform economy?

Paul: Well, in its broadest terms, the platform economy is any economic activity that's facilitated through a platform, which is typically an online platform but the one part of the economy that's receiving most attention right now, I would say, is digital labor platforms that are [...] match clients with a particular service with a pool of available workers. And these are platforms like Uber, Instacart, fiver, and they're behind most of the growth of gig work in the last decade.

Tegan: And do you have an idea of what percentage of Canadians are platform workers?

Paul: Well, it's an area we're still learning a lot about because of inconsistent definitions of the phenomenon. But in my own research, I find that about 13% of Canadians report finding work through a digital labor platform in the last month.

Now, that was a survey of Canadians conducted in September, 2019. So just before the pandemic. A year later we reran the study and slightly less but similar... roughly similar percentage reported platform work.

Tegan: Between 2005 and 2016, the share of gig workers in Canada grew from 6% to about 8-10%. Remember though that we can't compare StatCan's data directly to Paul's because gig work comprises many different types of work, while Paul here is only talking about platform workers.

Tegan: When I hear the term platform work, I think about the people who drive for huge ride sharing platforms. Is that necessarily the case?

Paul: Well, we do tend to think about Uber first, right? Because it's known for popularizing the labor platform labor model, but there are ever increasing numbers of platforms that offer a wide array of services and perhaps services, are work opportunities that are much easier for workers to access.

Right? I mean, Uber and Lyft require access to a vehicle that can be a barrier to entry. So, there are other types of platform work that I think are growing. Particularly in the pandemic, like food delivery, remote, online platform work. And I think they're growing in prevalence perhaps when ride hail services are seen as perhaps less safe from workers' perspectives and, and also passengers.

Tegan: Gig workers are found in many different industries. A 2019 StatCan study found that the arts, culture, recreation and sport industry had the highest share of gig workers, followed by the health industry and then sales and service. Those whose main occupations were in manufacturing and utilities were least likely to be gig workers.

Tegan: Could you talk about who works in the gig economy? Are there easily distinguishable categories of workers or are they all fairly similar.

Paul: No, it's a pretty diverse group of workers who are performing platform work. Some do it as a primary job, but only a small percentage do that. Many others do it as a second job, supplementing a primary employment.

And within that category, there are quite [...] it's quite a diverse group with a range of motivations, right? Some people are doing it for just some extra spending money. Some people are doing it because their primary job... the income isn't sufficient. And some just do it for sort of general income security.

So, you know, you have a great diversity. But we do see some patterns. We see that younger workers are more likely to be engaged in platform work. We find that minor[...] visible minorities and recent immigrants to Canada are more likely to be in platform work. I think that those patterns probably reflect some of the challenges those groups face in gaining access to more regular permanent employment.

And so your platform work may be lowering the barriers to entry for certain perhaps marginalized groups of workers or workers who have historically been marginalized from, from traditional employment.

Tegan: In 2019, StatCan found that about half of all gig workers also had one or more wage jobs. That means they weren't solely relying on their gig work to support themselves. The study also found that gig work was more prevalent among immigrants than among Canadian-born people. In fact, 10.8% of male immigrant workers who had been in Canada for less than five years were gig workers, compared with 6.1% of male Canadian-born workers.

Tegan: So you studied the mental health of platform workers. Could you talk a little bit about what you found?

Paul: Yes. Well, we analyzed multiple measures of mental health in our study of Canadian platform workers and a fairly clear pattern emerged regarding their wellbeing. Compared to wage employees and the, and the traditional self-employed platform workers reported higher levels of depression and anxiety. They reported greater sense of powerlessness in their lives, and they also reported feeling more isolated and lonely, which is strongly predictive of access to social support, which is important for wellbeing. Importantly, though it wha[...]These penalties, these mental health penalties appeared to be primarily experienced by those who performed platform work as their main job.

So for the majority of platform workers, we didn't find any major differences in their mental health compared to other workers and other employment arrangements.

Tegan: Work and financial concerns were the leading sources of stress for Canadians ages 18 and over in 2019.

Tegan: You talked about stress and distress. What... Do you have any idea what caused platform workers distress? What's the source of that?

Paul: Yes, there would seem to be a number of factors that were at play. First of all, platform workers reported higher levels of financial hardship compared to other workers. And we know that financial strain is a very strong life stressor that affects physical and mental health.

Now we don't know whether or not this financial strain arose because of platform work or because people who were financially struggling were self-selecting into platform work. So that's something we're going to need to look at in more detail in the future. There was also high levels of work-family conflict amongst platform workers.

And that was somewhat surprising given that there's a narrative around platform work that it involves flexibility for the worker to choose when they do their work, when they[...] how long they work for. And we actually found that Yes, the platform workers did report having more flexibility in their schedules, but it didn't seem to help them balance work and family life.

In fact, despite that resource, we typically call that a job resource in the work and mental health literature.

As a job resource, that flexibility didn't seem to help them balance their work and family life.

And there are a number of possibilities that are at play. Again, like financial hardship, it could be that we're looking at a group of workers who were struggling with balancing work and family in their previous career- jobs. And they pursued platform work because of its flexibility. And so we're seeing a self-selection of this group into this type of work.

It's also possible though that just the platform work isn't as family-friendly as it might appear. If you look at qualitative evidence from interviews with platform workers, you often see ride hail drivers, delivery workers, even freelancers online talk about how while in principle they can log on whenever they want and they can stop working whenever they want, that their work hours are in reality more dictated by outside factors like market demand for their services, right?

So, you know, if you're a ride hail driver, you need to work when there's demand for your services. And when[...] and that typically is evenings and weekends, which are not family friendly. If you're a remote freelancer, you might have international clients. And there[...] and you may have to work to their time zones, which is… Could be in the middle of the night.

So while there is this, I think narrative about flexibility and platform work, I think there are significant constraints for some groups of platform workers, particularly those who want to make this their main job, because then they're going to need to be working 30 plus hours to do so.. And then that flexibility, they might not really be able to exercise flexibility so that it aligns with their preferences.

So, yeah, I, I think there are, there are questions about this narrative of flexibility that we need to look more into.

The final factor that we found at play involved higher levels of isolation or feelings of isolation and loneliness among platform workers. And we know that social isolation and loneliness are problematic for workers' well-being. We certainly know this now with the pandemic and we've seen how it can impact our health.

And it seems that. Platform workers may be more isolated in their work, right? They're typically performing their work on their own. They may have little contact with other platform workers. Indeed. They might actually be in competition with other platform workers for assignments and their interactions with perhaps customers could be fairly limited.

And so they tend to start[...] exist on the fringe of organizations. And... while there might be some cases where they do seek out support from other platform workers, we know that for example, there are online communities for delivery drivers and ride hail workers. These are communities I think that offer more informational support rather than social support.

And so I think there[...] it is an inherently isolating type of work if this is the work that you do as your full-time job.

Tegan: A 2019 StatCan study found that the gig earnings of the majority of gig workers did not exceed five thousand dollars per year. The median net gig income was only $4,303. Yet, for more than a quarter, their gig earnings represented all their annual earnings and more than 89% of their total annual income.

Gig work is not evenly spread among all income brackets in Canada. The percentage of gig workers in the lowest 20% of the individual income distribution was about twice as high as the percentage of gig workers in the highest 20%.

Tegan: What did you mean when you wrote that platform firms can use algorithms to undermine worker autonomy?

Paul: Well, if we think about what algorithmic management is. That's when a firm uses technological techniques to remotely manage their workers. So digital labor platforms generally manage a geographically dispersed workforce.

Right. And they don't have much direct contact with their workers. So they instead rely on data collection and surveillance of their workers to automate most of the supervisory decisions. These decisions are made by software algorithms that operate without the need for human intervention. And they could be involved in assigning workers to particular tasks, it could be deciding on compensation levels, evaluating work performance and even terminating workers. So the algorithms are what make the digital labor platforms so effective for the on-demand services that we as consumers enjoy. But they do pose problems to workers. I [...] qualitative interviews with workers find that there are challenges to workers autonomy and their success on the platform that are posed by these algorithms, right?

So for a start, the decision-making rules that these algorithms are based on are not always transparent to the worker. So it's not always clear why one worker might be offered a well-paid assignment when others receive less desirable assignments. And workers often describe these algorithms as effectively blank boxes, right?

And this transparency or lack of transparency can extend to things like specific job assignments. So we've heard reports from delivery workers that they complain about not knowing the location details of an assignment until they've actually accepted the assignment. And this could place them somewhere across a city, for example, far away. And that lack of transparency of information about the assignment undermines the worker, right? Their ability to make decisions about where and what assignments to accept.

There's also, I think, challenges for workers to question the algorithms, right? They could be temporarily deactivated from a platform if their average reviews scores are falling below a certain threshold. Now with a human supervisor, a worker could offer some context for a bad review. Maybe it was an angry, unfair customer, but algorithms rarely take into account mitigating circumstances.

Now, there are grievance procedures, but those can take time to pursue. And in the meantime, that worker might be unable to work. So you hear quite commonly workers complaining about feeling at the mercy of some cold detached AI supervisor. And again, I think that runs contrary to a narrative of platform work as being independent and free from supervision.

Tegan: In 2019, 45% of enterprises in Canada use some kind of advanced or emerging technology, 6% use Artificial Intelligence.

Tegan: could you talk about what it means, or can you talk about the phrase or the idea of the eroding social contract between employer and employee?

Paul: Yes. I mean, we've been witnessing this for decades, right? In many ways, when we are talking about platform work, this is the next step in a longer term process that some call the casualization of work, right? Where we are seeing permanent employment opportunities diminish and the growth of less secure, alternative work arrangements, right?

Like, basically temporary contracts, fixed term contracts. And these inherently involve a weakening of the bond between a worker and that employer, because they are not bound indefinitely. Their relationship is temporary. And so when we think about platform work, it really is, I think the next stage in the casualization of work. Rather than seeing something particularly innovative we've been seeing this for some time. But now we're seeing workers have almost... or these platform workers have almost no contact with the digital labor platform.

Tegan: In 2018, more than 1 in 8 employees worked in a temporary job. About 6 out of 10 temporary employees worked full time, compared with close to 9 in 10 permanent employees.

Tegan: Yeah. Why does it matter whether someone's an employee or an independent contractor?

Paul: It matters because under current employment law, independent contractors don't enjoy many of the benefits and protections that employees are afforded. So labour legislation like the employment Senate act that covers things like minimum wage overtime, vacation pay, applies only to employees.

And if you're classified as self-employed, that also means you're not covered by some of the occupational health and safety protections that employees are covered by. So the rights to refuse unsafe work, right? Workplace inspections… These are particularly important during the pandemic. We've witnessed how the pandemic has exposed some of the vulnerabilities of those workers who are not covered by labor protections. And so, since platform workers are normally classified as independent contractors, it does affect their rights. It does affect the kind of benefits they have access to.

Tegan: 15% of the total Canadian workforce was self-employed in 2018. One-third of self-employed workers cited independence, freedom and being one's own boss as the main reason they were in self-employment.

Tegan: And what do you think of framing platform work as entrepreneurship?

Paul: I think I would question what someone means by entrepreneurship and it's not necessarily an easy thing to define, but if we think about in economics, entrepreneurship normally refers to an activity where someone works for themselves, bears the risk associated with any venture they take, but also the returns from that venture.

How well does that definition apply to platform work? To some extent, I think it does apply well for some freelance workers who are operating online and they can set their own fees and they're free to choose between clients. I think that does capture entrepreneurship. I'm just not sure it applies to some other types of platform work where you have, I think, significant constraints to their autonomy and how they do their work, right?

And if they're not able to set their own fees, if it's dictated by the platform's algorithm, if they face potentially deactivation, if they don't accept a certain percentage of assignments, if they're not given full information about the assignments, that looks more like an employee to me than an entrepreneur, but this is the interesting nature of this debate. It's not always clear and it could vary depending on the type of digital labor platform we're looking at..

The issue about platform work as entrepreneurship, I think, is controversial in part because yes, it may well apply to some people that are looking for freedom and independence, but I also think we're beginning to stretch that term entrepreneurship in a way that it often means more about an individual's resilience to uncertainty and precarity. And I'm not sure that type of entrepreneurship is necessarily beneficial.

So we might have people engaged in platform work, thinking of themselves as entrepreneurs, but without any of the benefits of it. And I'm engaged in some preliminary research right now that we're looking at how platform workers evaluate their social status.

So, there are measures of subjective social status that ask people to rank themselves on a scale of one to 10, with 10 being those who have the best jobs, best education, highest income. And we actually find that platform workers rate themselves higher in some social status compared to wage employees. They're similar to the traditional self-employed. So there is, I think, evidence that they do think of themselves differently. However, when we asked them, where do you see yourself in 10 years time on this scale? Most workers see themselves as ascending that scale, right. Rising in it. But platform workers actually are less optimistic about their mobility. So they actually report less mobility and expectations about mobility compared to wage employees. So there's an interesting dynamic where they rate themselves, their current situation, as doing very well relative to other workers, but they seem to be pessimistic about their prospects from social mobility.

And in some ways I think that that's reflecting their [...] They are buying into this idea of entrepreneurship, but they're also very aware of the challenges that are inherent in platform work for sustained economic opportunity.

Tegan: For most gig workers, gig work was only a temporary activity. Roughly one half of those who entered gig work in a given year had no gig income the next year. However, a non-negligible share of gig work entrants—about one-quarter—remained gig workers for three or more years.

Tegan: A StatCan study found that the size of the gig economy increased from 6.0% in 2008 to 6.8% in 2009. As some of those who lost their wage employment during the recession were pushed into self-employment. Do you think there's any chance that the pandemic could cause a similar trend?

Paul: There could. I mean as we see income supports begin to end, we could see this happen. I think people could seek out this type of work to deal with insufficient work hours in their primary job. Or if they're, if they're struggling to find regular employment, then we could see platform work serve as a sort of a buffer. It could also be though, because workers are just reprioritizing their work values. Now, as a result of the pandemic, there's a lot of discussion about this. And in terms of a growing desire for more flexibility, growing desires for being able to work from home. So certain types of platform work, but working remotely online from one's home, I think it is becoming more attractive because of the pandemic. But I do think, yes, that there might be an economic push depending on how the economy fares, as the pandemic continues.

Tegan: What role, if any, does the gig economy play in growing inequality?

Paul: I think we have to be careful about assigning too much blame to the platform economy. Again, I think it's emergence could be a symptom of growing inequality, as you mentioned, with regards to the great recession.

It's no coincidence that we saw, I think, the growth of platform work after[...] in the aftermath of the great recession. And I think it's growth in the last decade might be more of a reaction from workers to simply inadequate wage work options. So it's receiving a lot of attention, this labor model of platform work. From consumers, from workers, also from other companies interested in reducing labor costs. But, I think these have been issues that platform workers have faced or workers have faced for a long time and these have been brewing for a long time. So I think in some ways, platform work is the extension of what's been going on for decades. And certainly has the potential to maybe exacerbate that trend, but I think it's not the beginning of that.

Tegan: Looking ahead, the prospects for young Canadians will continue to be shaped by many factors, including the gig economy. Research released by Statistics Canada examined the outcomes of youth from the perspective of intergenerational income mobility. It found that the correlation between a child's income rank, as an adult, and their parents' income rank has been trending up. This means that your income as an adult is increasingly affected by what your parents' income was when you were a teenager. This declining income mobility across generations, combined with increasing income inequality among parents, raises concerns regarding the longer-term prospects for young Canadians in low-income.

Tegan: Who wins and who loses in the gig economy?

Paul: That's a good question. I think first and foremost consumers win. I think if we were to look back 20 years ago, the idea that we would eventually have food delivered to our home in the middle of the night, within 30 minutes at a reasonable price, we would have laughed at that idea. And I think it's really great for consumers. I do think there are those who suggest that we're really enjoying fast convenient services that don't reflect the true cost, right? And the cost of these services are being subsidized by the venture capital behind platforms or the low wages of platform workers. But inevitably, undoubtedly, consumers are winning from this.

In terms of workers, I think there are those that are benefiting. Those who have in demand skills, particularly skilled Online freelancers, I think they are benefiting from the wider client base that these platforms provide. I think those who just want a small side income that they're not particularly reliant on, maybe they're more interested in this as something as a hobby. I think it's particularly useful for those perhaps who are thinking about entering retirement and it's a way to, you know, have a staged transition into retirement. That could be beneficial.

And certainly those that, as I mentioned, who struggled to get access to full time employment, maybe those with disabilities or younger workers with less experience, I think that it's beneficial for many of these.

At the same time, I would question whether or not these groups would still be better served to an extent, if they just had access to stable, secure employment that was giving the actual flexibility, right? Those who lose, I think, are those who become dependent on this for their full time income.

I don't think this labour model is set up well to deal with the needs of full-time workers. I don't think it deals with the financial needs, I don't think it deals well with the family obligations of these groups because of questions about how much flexibility they really have. And so right now we're looking at a small percentage that do this as a primary job.

The big question is whether or not this is going to grow, this particular group.

Tegan: Access to stable, secure employment is important, especially right now. A triple-protected job is one that has no predetermined end date, faces a low risk of automation, and is resilient to pandemics. Two in five employees aged 18 to 64 held a triple-protected job in 2019, prior to the COVID-19 pandemic.

Tegan: If someone would like to learn more about your work, where should they go?

Paul: Updates on my research are available on the sociology department's website at McMaster university.

I'm also a part of an ongoing study called the Canadian quality of work and economic life study. This is a study run out of the university of Toronto, collaborating with McMaster university and other institutions in Canada and we're tracking the work, family and health of Canadians through the pandemic.

And we have a website that is easily found labeled under the Canadian quality of work and economic life study.

Tegan: You've been listening to Eh Sayers. Thank you to our guest, Paul Glavin.

You can subscribe to this show wherever you get your podcasts. There, you can also find the French version of our show, called Eh-coutez bien. Thanks for listening!

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