[Work Revolution] "Gig Economy, New Opportunities but Threats to Job and Economic Security"

Interview with Sarah Kessler, Deputy Quartz Editor

Unemployment Insurance Extended to US Freelancers
More Likely to Seek Own Business Than New Jobs
Robust Social Safety Nets Needed During Economic Crises

Sarah Kessler, Deputy Editor of Quartz (Source: Sarah Kessler Homepage)

[Asia Economy Reporter Hyunju Lee] "If the United States did not have 'emergency unemployment insurance,' it would have faced great difficulties due to the novel coronavirus infection (COVID-19). In the future, a social safety net should be created that guarantees protection through this type of insurance even if one does not work at 'one company.'

Sarah Kessler, Deputy Editor of Quartz, said in an email interview with Asia Economy, "I think many problems that existed in the 'Gig Economy' became more visible due to COVID-19."

Deputy Editor Kessler published a book related to the gig economy titled The Age Without Jobs. The book diagnoses that while the gig economy can create new opportunities, it can also further weaken workers' job and economic stability. The gig economy refers to an economic model where people are hired temporarily on an as-needed basis in industrial fields. From the worker's perspective, it refers to a 'temporary job economy' where they are not employed somewhere but work temporarily when needed. Uber drivers are a representative example. The term "gig" originated in the 1920s around American jazz venues, where musicians were hired for short performances. It implies playing under a one-night contract. Later, it expanded to mean working as a sole proprietor signing short-term contracts with companies.

When the U.S. passed the COVID-19 economic stimulus package, freelancers and 'gig workers' were also allowed to receive unemployment insurance. Deputy Editor Kessler said, "At the early stage of COVID-19 spread, delivery drivers did not receive protections such as masks or sick leave from the companies they worked for," adding, "All they were told was to just stay home if they were sick." She also said that without emergency unemployment insurance, many people would have faced difficulties. She said, "Companies like Uber will ask more questions about whether their workers are actually freelancers or employees."

On the 12th, an unemployed person is looking over the unemployment benefits guide at the unemployment benefits briefing held at the Seoul Employment Welfare Plus Center in Jung-gu, Seoul. Due to the economic downturn caused by the novel coronavirus disease (COVID-19) crisis, the employment shock has intensified, and the amount paid for unemployment benefits in April reached 993.3 billion won, setting a new record high. The number of new applicants for job-seeking benefits increased by 32.9% (32,000 people) compared to the same month last year, reaching 129,000 people. Photo by Kim Hyun-min kimhyun81@

Various work styles such as remote work using untact (contactless) technology are expected to affect hiring methods as well. Large companies have already declared that they will not hire large numbers of regular employees. The number of individuals and companies using new hiring methods through matching platforms is also rapidly increasing. Deputy Editor Kessler said, "I cannot be sure whether more freelancers will be produced after COVID-19," but she predicted, "However, the possibility that people who lost jobs will start their own businesses instead of finding new jobs is higher."

The somewhat unstable economic foundation of the gig economy requires a stronger social safety net. Deputy Editor Kessler emphasized, "Due to the COVID-19 crisis, Congress decided to allow platform workers to temporarily enroll in unemployment insurance," adding, "These types of programs should be considered to accommodate new jobs that will appear in the future."

She also mentioned that disparities among gig workers should be taken into account when constructing social safety nets. She pointed out, "Wealthy gig workers such as lawyers, consultants, and creative freelancers are not affected by vulnerable social safety nets," and "In the case of low-wage workers, since minimum wage laws or existing employment practices legally fail to protect them, if social safety nets do not function properly, the situation could worsen."