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Making the gig economy fairer

All workers in the sector should be paid the National Living Wage

by Frank Field , Andrew Forsey / February 3, 2017 / Leave a comment
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Black cab drivers protest against Uber in central London ©DINENDRA HARIA/NEWZULU/PA Images

By inviting Matthew Taylor, former head of the No. 10 policy unit, to lead an Independent Review of Employment Practices in the Modern Economy, the prime minister has demonstrated her commitment to striking a fairer deal for people at the bottom of Britain’s labour market who are striving for their keep.

Many of those people are working in what is called the “gig economy,” an industry largely reliant on drivers, classed by the companies with whom they work as being self-employed, who deliver people and packages at a low cost and a fast pace with the help of online technology.

For some working people, the gig economy provides the opportunity of flexible work, and a supplementary income, around which they can fit other commitments. However, for many others the gig economy represents a life of low pay, chronic insecurity and exploitation, in which all of the risks in the employment relationship are unloaded onto them by the company with whom they work, and the gains go almost exclusively to the company in question. This is why we have made a submission to Taylor’s review. The submission includes proposed solutions to these problems—such as a guaranteed National Living Wage as part of a broader national minimum standard of fair work.

The predominance of self-employment in the gig economy enables companies to avoid their obligations to pay the National Living Wage, tax and National Insurance contributions, occupational pension contributions, and holiday and sick pay. Likewise they are able immediately to dismiss working people, or enact severe reductions to their weekly hours, without there being any right of appeal against those decisions. Examples of the sulphurous effect of the gig economy on our society, in which the odds are so heavily stacked in favour of companies, include working people being bullied while at their dying child’s bedside, and having their work removed from them while caring for terminally ill relatives.

People working in the gig economy are at risk of taking home as little as £2 an hour—less than a third of the National Living Wage—because the companies with whom they work pay low piece rates which have been cut in recent years. These rates are insufficient both to cover the costs people must necessarily incur to fulfil their jobs, as…

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About authors

Frank Field
Frank Field is Labour MP for Birkenhead and Chair of the Work and Pensions Select Committee
Andrew Forsey
Andrew Forsey is the head of Frank Field MP’s parliamentary office. He and Field have co-authored two reports on the gig economy: "Wild West Workplace: self-employment in Britain’s ‘gig economy’" (September 2016); and "Sweated Labour: Uber and the ‘gig economy’" (December 2016)

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