Indonesia and Peru are developing economies that have been severely hit by the pandemic. Despite being so geographically distant, culturally dissimilar and with markets of such different sizes, they share two key similarities from an international employment relations (IER) perspective:
- Both countries are witnessing an exponential rise in the development of the gig economy and digital platform jobs.
- An absence of regulation, and informality shroud both of their employment systems.
So where’s the opportunity during such a time of crisis?
As COVID-19 has proven to be a pivotal turning point in multiple ways, this case is no different. A more equitable labour relations system, we believe, is imperative in order to bridge social gaps for gig workers.
How do we achieve this?
By reinforcing the workers’ collective movements, rather than only dealing with the legal dichotomy of employee versus self-employed.
Similarity 1: A rapidly growing gig economy
Emerging economies such as Indonesia and Peru are often perceived to constitute a lower concentration of gig workers compared to the global North, as shown in Figure 01. However, this is far from the truth.
Rather, the market for digital work in emerging countries is increasing rapidly. It is estimated that the use of digital labour platforms in the global South has significantly contributed to the annual growth rate of the gig economy, which stands at around 25% per year (Graham et al., 2017).
Given the COVID-19 crisis, the digital revolution and the gig economy is only expected to strengthen as such jobs are showing resilience (Ustek-Spilda et al., 2020).
The number of Rappi riders have multiplied exponentially due to the;
- deactivation of multiple activities by the pandemic’s lockdown
- decline of formal employment
- ease of accessibility to platform work
The rapid rise of the online gig economy –especially in the creative, multimedia and transport industries – informs its immense potential in curbing unemployment. That is because this Internet-based form of work – which has been adopted rapidly in recent years to constitute one-third of Indonesia’s 127 million people, according to Bloomberg data (Unair, 2020) – remunerates gig workers with a reasonable salary (IDR 3.4 million), rendering it as a promising and competitive alternative to regular forms of employment.
Similarity 2: A legal void for gig workers
Gig workers’ classification as self-employed impacts their access to rights and benefits, as it makes it complex to identify an agent who could assume the role of a traditional employer. This could not only accentuate the precariousness of gig work but also trigger the creation of the collective movements and voice. Workers depend on gig platforms for their livelihoods, which is even more critical considering that many have to cover their operating costs with their income (Johnston & Land-Kazlauskas, 2018; Thompson, 2018; Jesnes, 2019).
This topic is not within any current legislative agenda, although recently the Ministry of Labour and Promotion of Employment have suggested their inclination to classify gig workers as 100% regular employees (MTPE, 2020). However, legislative ambiguity combined with the already high informality of the labour market in Latin America and the Caribbean – which according to the ILO a couple of years ago was around 53.1% (International Labour Organization, 2018) – increases the level of complexity for the structuring of a collective movement or voice.
The self-employed and freelance nature of gig work is characterised by increasing worker precarity and insecurity.Platforms do not accommodate workers’ aspirations, nor do they develop a pipeline for career progression especially for those in low-skill work. This reflects the further degradation of labour (Aneja and Mawii, 2020).
Opportunity: Glimpses of collective representation
Collective action and voice is founded on solidarity, and through them coordination, as well as complaints, recommendations and aid is provided. Although it is not frequent, the use of social media or online groups are useful to coordinate collective action demanding better labour treatment. Regarding the latter, in 2019 a group of riders gathered outside a well-known delivery App in Lima, claiming the company to back down on its commissions’ reduction (Cerna, 2019).
Collective coordination is useful for accidents or even when economic help is required because these virtual forums are used to gather the assistance needed. These cases show how, despite being faced with adverse conditions, gig workers’ collectives are making their way to weave networks based on solidarity and mutual aid (Graham, Hjorth, et al., 2017; Rosenblat, 2019; Cant, 2020).
Despite the fact that informal workers also constitute a high percentage (60%) of the total Indonesian workforce, platforms, driver communities, and unions affiliated with the platform economy, to some extent helps in preventing the deterioration of working conditions. For example, the company Go-Jek helps their drivers subscribe to the government health insurance programme, while at Grab Bike, workers are automatically enrolled in the government’s professional insurance programme (Alonso Soto, 2020).
Moreover, many gig workers have joined self-organised community organisations that function using mutual aid logic, that constitutes horizontal networks and strong social commitment.
This mutual aid-based approach, which builds on a long tradition of associational behaviour in Indonesia’s large informal sector, has facilitated high levels of membership and member participation in small, geographically based driver communities (Ford and Honan, 2019). This logic, however, is less well suited to;
- staging large-scale protests
- negotiating with the app-based transport companies
- engaging with the government
- overall affecting structural change (ibid), in comparison to unions
As shown by the cases of Indonesia and Peru, reinforcing large-scale collective representation for gig economy workers is a critical starting point, if an equitable labour relations systems for gig workers is to be achieved in the years to come. Specifically, a mutual aid approach could serve as a base for collective representation in gig workers’ challenge for improved working conditions (Ford and Hanan, 2019).
However, such everyday forms of collectivism must be supplemented by unions and other large-scale organisations to pose a strong challenge to the power of their pseudo-employers, in search of improved labour conditions.
It is also critical that such organisations and collective movements embrace the importance of educating and training informal workers, to develop their economic potential to engage productively, not only in informal gig work, but gradually in formal work as well (Palmer, 2008).
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