Question

Explain what the implications of moving towards a ‘gig economy’, where fewer people work full-time jobs, will have on the unemployment rate and on the output of the economy.

Answer 1

The term "gig economy" refers to a general workforce environment in which short term engagements and temporary contracts are commonplace. Gig economy gets its name from small works which are done by individual workers , may be a short period of time. We cannot compare it with a "salaried job", but still it has its own status. Such an economy provides job opportunities for lay men or low wage workers, so that they can earn as much money as they would be in any other companies.

As technology is developing in a faster pace, we can see that not even a single person does not sit idle. The widespread use and availability of smart phones , laptop computers and online platforms ... all these are creating wonderful job opportunities to job seekers.All of them are engaged in any kind of work. Even if it is not a public job, they receive very attractive perks and allowances. Gig economy-based temporary work is prevalent around the world,and nowadays people prefer to choose a freelance job.  We can point out a number of examples like Zomato, Amazon, Uber etc.Through these agencies, people work as temporary employers. A firm can also use temporary workers to vary compensation in what would normally be an illegal or impossible manner. The role of temporary workers in the work space can also have the effects of coercing regular employees into taking more work for less pay.

When people move to gig economy, whether the unemployment rate will increase or decrease?It is said that unemployment rate will increase because, these workers are not considered as Employed. When gig economic workers are looking for remote job is not desirable for business.

Developing nations are now moving to gig economy, as it is able to break the vicious circle of poverty. If this causes to raise the PI, can we blame gig economy?