8

Jan

New Gig Economy is  Slavery in New Garb

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Prof Shivaji Sarkar

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New Delhi | Wednesday | 8 January 2025

A significant challenge is emerging in an economy striving to regain momentum: the rise of exploited workers celebrated as gig workers by institutions like NITI Aayog. These labourers, forming the fastest-growing workforce segment in India, face precarious conditions. The fear of losing their jobs and pushing their families into starvation silences many who might otherwise protest their exploitation.

Paradoxically, the country’s think tank lauds the shift to a gig economy, characterised by short-term contracts and freelance opportunities over stable, long-term employment. For workers, however, this model brings constant stress, erratic schedules, and an absence of essential social security benefits. While corporations thrive on reduced costs and liabilities, the toll on human lives is devastating. Lessons from Bangladesh’s economic collapse serve as a stark reminder of the dangers of widespread joblessness and discontent among the youth.

For businesses and shareholders, the gig economy is a windfall. But for workers and society, the drawbacks are profound. The term "gig," once used by musicians to describe short-term engagements, reflects the instability and exploitation that have plagued artists for generations. Similarly, today’s gig workers grapple with low pay, lack of benefits, and gruelling conditions, with some even resorting to extreme measures like repeated abortions to stay competitive in this unforgiving race.

 

Article at a Glance
The rise of gig work in India, celebrated by institutions like NITI Aayog, presents significant challenges for workers who face precarious conditions and lack essential benefits. This segment, projected to grow from 7.7 million to up to 30 million by 2029-30, is characterized by short-term contracts that lead to job insecurity, erratic schedules, and low pay, with average earnings around ₹15,000 per month.
While corporations benefit from reduced costs, the human toll is severe, as many workers endure exploitation and stress, sometimes resorting to extreme measures to remain competitive. The shift towards gig work has eroded traditional employment relationships, complicating workers' rights and protections.
Despite some decline in youth unemployment, the overall labor market remains precarious, with millions of informal jobs lost. Experts warn that without intervention, the gig economy may perpetuate exploitation and inequality, undermining the dignity of work in India.

 

NITI Aayog estimates that India’s gig workforce, which contributed 1.5% of the GDP in 2020-21, will grow from 7.7 million workers in 2020-21 to 23.5-30 million by 2029-30—a staggering 200% increase. This expansion favours companies by minimizing their liabilities, even as the Aayog acknowledges gig work as one of the worst forms of employment. Gig workers lack paid sick leave, health insurance, pensions, and protections against irregular work schedules, leaving them vulnerable and unsupported.

Despite these glaring issues, the Aayog presents the gig economy as a "free" market system where temporary work arrangements dominate, and organizations hire independent workers for short-term needs. It admits that this model erodes traditional economic relationships and creates job insecurity, irregular wages, and uncertain employment status. The Labour Ministry, influenced by NITI Aayog, recently replaced 44 labour laws with four labour codes that further complicate redressal mechanisms for workers.

Companies like Amazon, Flipkart, Blinkit, Uber, and Ola epitomize the challenges of this system, creating global anguish among workers. Meanwhile, global leaders like Elon Musk and former U.S. President Donald Trump have advocated for policies that exacerbate these conditions by limiting work visas and promoting casualization.

India is at a crossroads, navigating the challenges of balancing corporate interests with workers’ rights. The latest Annual Periodic Labour Force Survey (PLFS) reveals a youth unemployment rate of 12.9% in 2020-21, 12.4% in 2021-22, and 10% in 2022-23. While there has been some decline, unemployment remains a significant issue. In 2016, there were 44.85 million unemployed individuals, a slight decrease from 48.26 million in 2014.

The average income for gig workers hovers around ₹15,000 per month, with companies like Amazon and Blinkit cutting per-piece delivery rates. Inflation rates of 6-9% and declining GDP growth—5.4% in recent years—compound the struggles of these workers. Agriculture employment has decreased, and the construction sector has seen only marginal growth.

Between 2015-16 and 2022-23, 6.3 million informal sector enterprises in India shut down, resulting in the loss of 16 million jobs. According to India Ratings, this downturn is attributed to demonetization, the Goods and Services Tax, and the COVID-19 pandemic. Meanwhile, the IT sector faces challenges, with many experienced professionals losing their jobs and turning to gig work in their 40s.

From 2017-18 to 2022-23, the PLFS reported a decline in salaried jobs and a rise in self-employment, often including unpaid helpers in household enterprises. This shift highlights the growing precarity of India’s labour market.

The gig economy’s flaws are also evident internationally. In November 2024, a U.S. court ruled that Amazon’s digital control mechanisms, such as apps and algorithms, could incur significant liability. A California court fined the company $5.9 million for failing to provide workers with written task instructions on 60,000 occasions. In India, the Madurai Consumer Commission ordered Amazon, Samsung, and Divine India to pay ₹2.1 lakh for causing mental agony to consumers. Additionally, the Competition Commission of India (CCI) has moved the Supreme Court to expedite 24 pending cases against Amazon and Flipkart.

The rapid rise of companies like Blinkit and Zepto underscores the boom in Indian e-commerce, with firms like Swiggy, Instamart, Uber, and Ola taking cuts as high as 40% per transaction. These practices add to the stress faced by workers, who already operate in an unregulated environment lacking robust legislation to address unfair trade practices and data privacy concerns.

The Indian Code on Social Security, 2020, recognizes gig workers as a distinct category but has been criticized for its lack of legal mandates, universal coverage, and accountability mechanisms. While the U.S. remains the largest market for gig workers, countries like India, Indonesia, Australia, and Brazil are emerging as strong contenders.

Experts highlight how illegal immigrants in the U.S. often fall into forced labour, boosting the economy at their expense. The agricultural sector is a prime example of such exploitation. This trend suggests that the gig economy is being promoted deliberately to sustain a pool of cheap labour.

India must take proactive steps to address these challenges. Engaging with the International Labour Organization (ILO) and other global forums to establish fair wage codes and equitable job practices is essential. Without robust intervention, the gig economy risks becoming a modern-day system of exploitation, perpetuating inequality and undermining the dignity of work.

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