A recent World Bank report has revealed that the ‘gig economy‘ comprises an unexpected 12% of the global labor market, surpassing previous estimates. This sector offers substantial opportunities, especially for women and young individuals in developing nations. While online gig work continues to grow in popularity, there remains an evident gap in social protections for its workers.
Although developed nations currently lead in the demand for gig workers, developing countries are not far behind, showcasing a rapid growth rate. For instance, job postings on major digital platforms in Sub-Saharan Africa have surged by 130%. In comparison, North America’s growth rate is only 14%. A significant 60% of businesses in less prosperous nations have increased their reliance on gig workers, a figure that drops to less than half in wealthier countries.
In a departure from traditional studies, this report includes data from both global and local platforms and takes into account non-English speaking workers. These considerations expose the sheer scale of the gig economy. An impressive 545 online gig platforms exist globally, catering to clients and workers from 186 countries. Around 75% of these platforms serve regional or local audiences. Furthermore, low- and middle-income nations generate 40% of the traffic to these gig platforms, highlighting their growing importance in the global economy.
The gig economy, with its flexible work structure, is particularly appealing to younger individuals. Many gravitate toward it for varied reasons, from earning income and acquiring new skills to needing a flexible work schedule that complements their educational or other commitments. Interestingly, women’s participation in the online gig sector surpasses their representation in the general labor market. Additionally, a notable proportion, six out of 10 gig workers, are based in smaller cities, rather than the primary population centers.
However, the gig economy is not without its challenges. In low-income countries, a vast majority operate outside standard labor regulations, devoid of social benefits. A significant wage disparity is also prevalent, with women earning just 68% of what men make on leading online platforms. The report underscores these issues and concludes with recommended strategies for policymakers. These aim to maximize the potential benefits of the gig economy while mitigating its associated risks.
By harnessing the capabilities of digital platforms, it’s possible to shed light on informal workers, amplifying efforts to offer comprehensive social protection. Prioritizing investments in digital infrastructure, fostering collaborations with digital platforms, and introducing innovative models of social insurance can enable developing nations to tap into this growing labor market segment. This could pave the way for broader economic opportunities and inclusivity.