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SINGAPORE: Around the world, the COVID-19 pandemic has dashed hopes for a better future.
In Asia Pacific, 81 million jobs were lost in 2020, according to a new report from the International Labor Organization.
The unemployment rate in many countries has increased from single digits to double digits.
But it still remains in the single digits for Singapore. In fact, Singapore’s unemployment rate fell for the first time in 2020 to 3.3 percent in November, while the unemployment rate for citizens fell to 4.7 percent.
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The fiscal support provided by the Government has cushioned the fall.
Since the pandemic, the Singapore government had set aside more than billions to stimulate the economy and maintain jobs through measures such as the Employment Support Scheme (JSS) and the Job Growth initiative, including in the Budget 2021.
Meanwhile, the concert economy provided a lifeline that kept many afloat. During the circuit breaker, workers in the travel and tourism industries turned to food delivery jobs to increase their income.
One year after the pandemic, why do users, passengers, and restaurants still have complaints about food delivery apps? A business professor and the founder of a carpool app have their say on CNA’s Heart of the Matter podcast:
THE LURE OF THE GIG ECONOMY
Outsourced economy work has been popular in Singapore for some years now, even before the pandemic.
Many here have turned to self-employment while waiting for permanent employment or use it to supplement their income while venturing into business, education, or entrepreneurship.
The gig economy also provides an alternative source of income for those less able to work full time.
According to the Ministry of Manpower, the number of self-employed in Singapore stood at around 211,000 in 2019, around 10 percent of all employed residents, up from 200,000 in 2016, showing a steady increase.
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It’s the same around the world: Forbes reports that 36 percent of Americans do some kind of flexible work, and companies are also hiring these part-time full-time workers to keep labor costs low.
Workers in the outsourced economy at Uber, Deliveroo and Lyft fear they will no longer be able to survive on the meager income from jobs that leave them increasingly vulnerable AFP / JACQUES DEMARTHON
Part of this revolution has been driven by technology – the rise of apps that let you order whatever you want with your phone.
This became even more focused during COVID-19.
Throughout the circuit breaker and since then, there has been a greater reliance on these services, although ride-sharing apps like Grab saw their transportation business drop in 2020 as people commuted less.
For workers traditionally at the lower end of the skill scale, this was too good an opportunity to miss. Drivers and food delivery people for companies like Grab could make thousands a month.
In a world without gigs, these workers may have been confined to steady jobs like cashiers or security personnel, cleaners, with long hours and potentially lower wages, or no work at all.
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All this activity has added to the coffers of platform companies and, by extension, to the economy.
Take, for example, Grab’s net revenue, which grew 70 percent in 2020, driven by an increase in its food delivery business. The tech giant is even pushing forward its IPO targets for this year. That’s not bad if the company continues to create more high-value jobs for Singaporeans.
MORE SUPPORT FOR THE GIG ECONOMY
What lessons can we draw from this phenomenon? The gig economy has done well in protecting citizens from unemployment, even if this is not necessarily widespread.
Maria Figueroa, Director of Labor and Policy Research at Cornell University’s College of Industrial and Labor Relations, told the media that during this crisis, “those who offer online services can outperform freelancers with tied income. to events ”.
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Overall, however, this lightweight asset model makes companies like Grab, Deliveroo, and Airbnb more resilient to economic fluctuations.
The question, of course, is what else can be done to support these workers, who are at the mercy of market fluctuations.
The recent UK court ruling that Uber drivers should be treated as workers rather than independent contractors promises changes underway towards stronger protections and better recognition.
The “concert economy” involves millions of people in all kinds of jobs, from Uber drivers to Deliveroo delivery teams AFP / PATRICIA DE MELO MOREIRA
In Singapore, measures were implemented last year to support training programs and reinforce the CPF savings of workers in the contract economy.
Ideally, there should be plans for the self-employed to undergo skills training tailored to their fields of self-employment that create potential for advancement within the sector.
Outsourced workers can be trained to better interact with customers. They can also learn how to generate business opportunities as contract workers and start their own business.
Such a move will be in line with the government’s push at SkillsFuture, to build a skilled, relevant and future-ready workforce.
The government can also help ensure that concert workers have adequate social safety nets.
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Workers who remain long-term in the gig economy may end up accumulating small contributions to their Central Provident Fund (CPF), affecting their retirement, housing affordability, and health care supplies.
Businesses that rely on an autonomous military must also set aside funds for a CPF contribution scheme for concert workers.
For example, starting in 2020, self-employed government-hired workers took advantage of the Contribute-As-You-Earn (CAYE) pilot program: a portion of the payment for their services is automatically transferred to their Medisave accounts.
It is time to extend this to private sector workers as well. This will help both private sector employers and employees participate in the gig economy.
The moves to improve collective bargaining through the establishment of an Association of Delivery Champions last December and the National Association of Private Rental Vehicles in 2016 are also worth seeing.
A LOSS OF TALENT AND RESOURCES?
Some may say that a boost to the concert economy may be “a waste of talent.” These concert workers could be working full-time jobs with skill scales that they can scale instead.
A private rental care driver in Singapore. (Photo: Aaron Chong)
But looking for work is a coincidence of expectations. Concert work despised by some may be a dream job desired by others who enjoy or need the flexibility.
Workers can spend more time with their young children or older parents and not spend money on childcare or elder support, respectively.
Lastly, how do we treat workers who want to quit concert jobs and move on to a nine-to-five job as a technician or analyst?
As an economist, I believe in markets.
So let the forces of supply and demand determine wages and other benefits for workers. Also, if there is no friction, people should be able to move back and forth between the concert and the traditional economy.
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One may wonder if gig workers lose out if companies change their hiring policy, if they don’t have marketable skills thereafter. This can be costly for concert workers, and as a result, should the government discourage concert workers?
It’s hard to speculate on all the future jobs and skill requirements. No one could have imagined life as an “influencer” or an application designer just 10 years ago.
Therefore, it is difficult to predict how tour worker skills evolve and how valuable they will be in the economy of the future.
But on the question of whether the government has a role, the answer is a resounding yes. As a society, we must ensure that all citizens have a strong social safety net.
Sumit Agarwal is the Low Tuck Kwong Distinguished Professor of Finance, Economics and Real Estate at the National University of Singapore (NUS) Business School. He is also a co-author of Kiasunomics and Kiasunomics 2.The opinions expressed are those of the author and do not represent the views or opinions of NUS.
