Mains Practice Questions

Introduction

The Economic Survey of 2020-21 noted that India had emerged as a leading country for flexi-staffing or gig and platform workers

• The rapid rise of the app-based gig economy in India with a gig workforce projected to reach 23.5 million by 2030 has reshaped urban employment and created new forms of social stratification.
• While it has democratized access to jobs, it has also entrenched inequalities due to unstable incomes, lack of social security, and differential access to opportunities.

Body

Gig Economy Leading to New Forms of Social Stratification in Urban India:

• Creation of a Precarious 'Gig Worker' Class: Gig workers face income instability and lack benefits like health insurance or paid leave, unlike salaried employees.
  • This creates a "working poor" class, vulnerable to economic volatility. For instance, delivery partners for Swiggy and Zomato earn based on demand, leading to unpredictable earnings.
• Wage Disparity and Economic Vulnerability: The gig economy has widened wage gaps between “high-skill” (e.g., IT freelancers) and “low-skill” (e.g., delivery drivers) workers.
  • While high-skill workers enjoy more autonomy and better pay, low-skill workers struggle with low wages and limited bargaining power.
• Lack of Social Security and Growing Inequality: Unlike salaried workers, gig workers lack social protections like provident funds and pensions, making them susceptible to economic and health shocks.
  • The Covid-19 lockdown exposed this vulnerability, with many gig workers losing income without compensatory support.
• Algorithmic Control and Exploitation: Gig workers are managed by algorithms that dictate their schedules, tasks, and earnings.
  • Frequent changes to policies by platforms can lead to arbitrary pay adjustments and job insecurity, contributing to stress and power imbalances in worker-employer relations.
    • Example: A 24-year-old gig worker was made to pledge to skip toilet and water breaks until all packages from six large trucks were unloaded.
• Rating-Based Class System: Workers with 4.5+ ratings gets better time slots, creating an "elite class" of highly-rated workers.
  • Workers with better ratings get access to premium localities and earn significantly more than those in peripheral areas.
  • Example: Food delivery workers in South Mumbai earn more than suburban counterparts.

Despite creating new stratifications, Gig Economy has also been key in:

• Significantly increasing economic opportunities and social mobility, with platform workers’ average earnings rising by 48% in 2023 compared to traditional low wage employment.
• Offering flexible work options for 28% of women.(Taskmo Gig Index).
• Enabling workers to pursue education while working with 47% of the gig work now in medium skilled jobs (NITI Aayog).
  • Additionally, large numbers of migrant workers have found quick employment in urban areas through the gig economy.
• Playing a crucial role in addressing income inequality and reducing unemployment to help India to reach a USD 5 trillion economy by 2025.

Conclusion

The rise of the app-based gig economy has undoubtedly expanded job opportunities in urban India but has also introduced distinct social stratifications. Addressing these emerging inequities requires a strict implementation of Social Security Code, 2020 and fair labor practices within the gig economy.