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Final Report - Seu 230 Labour Economics
Final Report - Seu 230 Labour Economics
Final Report - Seu 230 Labour Economics
SEMESTER 1,2022/2023
ASSIGNMENT
REPORT TITLE:
Lecturer Name :
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SEU230 LABOUR ECONOMICS
SEMESTER 1, 2022/2023
GROUP WORK
EVALUATION
Group Number: A2
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Table of Contents
No Details Page
Abstract
4.0 Conclusion 17
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ABSTRACT
Gig Workers are part time or independent workers who work in the service sector. There is no
doubt that the gig economy has boosted after the Covid-19 Pandemic and highlighted the plight
of gig workers as they do not receive equal benefits and perks as those affiliated with permanent
jobs. In this project, we have highlighted some of the issues faced by most gig workers in
Malaysia as well as globally. These issues include lacking in benefits and job security received
by gig workers, the financial instability and the growing competition among gig workers. Apart
from that, we have also suggested ways to look after gig workers’ well-being which includes
providing them with financial protection, safety net and introducing minimum wage for gig
workers across industries. Policy makers can develop effective measures to support the gig
economy as a new engine of growth by analyzing the labour market demand in detail.
Keywords: Issues, Well-being, benefits and job security, financial instability, growing
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1.0 INTRODUCTION
Since the beginning of the 2007+ crisis, the popularity of occasional and taskwork has grown
globally, particularly in the United States. During the crisis, it allowed businesses to cut labor
expenses and was sometimes the only opportunity for people to generate an income and make a
life. The concept of a "gig economy," defined by jazz club musicians in the early 1900s as
individuals enhancing work flexibility but without the benefits of the employed, such as
healthcare, pensions, and paid holidays, has been around for more than a century.
Consider the 1930s Great Depression. The concept of less reliable and less location-based work
grew in popularity. Drought and falling prices caused many farmers to sell their property. They
were unable to obtain stable employment. As a result, they were forced to work as migratory
workers, moving from farm to farm.The first temporary agency was established in the 1940s,
providing firms with temporary office workers and other clerically skilled labor.
As the need for more flexible work schedules and non-permanent labor increased in the
1990s, 10% of the US workforce was employed as contractors, temporary workers, and on-call
workers.When the digital era took off in the late 1990s and early 1990s, so did the gig
markets began to emerge, giving a venue for gig workers to find work.
A gig economy is a labor market in which contract workers and freelancers fill temporary and
part-time positions instead of full-time permanent employees. Flexibility and independence come
at the expense of job security for gig workers. Many businesses save money by foregoing
rewards such as health insurance and paid vacation time. Others offer some benefits to gig
workers but outsource benefit administration and benefit programs to third-party suppliers.The
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gig economy is a large and rising phenomenon that is rapidly affecting one of the most key areas
of the economy and society: the labor market. The phrase "gig economy" refers to labor markets
that are temporary, on-demand, irregular, and frequently task-based. The term "gig," which
originated in the music industry, is now often used to describe work in a far larger range of
businesses, including food and beverages, transportation, education, and many more.
The gig economy employs around 30% of Malaysia's working force (5 million individuals),
and the figure is expanding. With the advancement of technology, online platforms have been
freely and easily available to anybody, anywhere and at any time, increasing the number of
spectrum of people.E-hailing services such as Grab and MyCar (GOJO), as well as online food
delivery services such as Foodpanda and Grab Food, assist a significant portion of gig
employment in Malaysia (Lim 2021).The causes driving the growth in job transitions and gig-
workers in Malaysia, according to (Ng et al. 2017), include the accelerating cycle of
obsolescence and renewal of industries and job descriptions as a result of rapid technological
advances, and changes in the traditional employer-employee relationship, which has resulted in
COVID-19 epidemic, which struck most industries and caused unemployment to surge, was
another reason that led to the expansion of the gig economy in Malaysia.
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2.0 Issues of Gig Workers
There are 3 main issues of gig workers which are lack of job security and benefits, growing
competition among gig workers and financial instability among gig workers that we will discuss
The gig economy can be demanding when there is no consistent source of income. You should
prepare for times when you might make less money since you might experience periods when it
is hard to get a job. The most recent instance is McDonald's, where employees at two fast food
locations recently took the uncommon step of going on strike in order to demand better
compensation, more secure contracts, and union recognition. The rights of the workers are not
the only concern here. Long-term commitments to unstable employment combine with other
problems when people do so. The exorbitant expense of housing keeps people dependent on their
parents for the rest of their lives. There are reasons to think that low-quality occupations with
unstable work schedules are bad for your health. The members of the socioeconomic categories
with the lowest levels of prosperity suffer the most from these drawbacks.
Some service jobs are even more insecure for casual workers. Not only do they have to bear
hardships from a small number of customers, but they also continue to work without security
because they may be fired at any time. As the Guardian has documented, a disproportionate
number of allegedly freelance workers for firms like Uber, Deliveroo and Hermes have
complained of low pay, uncertainty, callous treatment, and harsher working conditions for many
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workers in business models that depend on these freelance workers to deliver more tremendous
that the gig economy opened the door for them to generate extra income. They are first exposed
to the Covid-19 infection and then exposed to the possibility of job dangers like accidents. Given
that they lack the same protection as full-time workers, the situation is even worse.
There are incredibly few gig jobs that offer retirement or health benefits of any kind. Even
though some long-term contracts may have modest benefit packages, this is uncommon. The risk
of gig labor is transferred from employers to employees, and individuals who engage in it may
experience financial instability and higher levels of economic and psychological stress than those
who work at traditional jobs. Of course, many of the protections offered by regular employment
are absent from independent labor. That covers things like the minimum wage, overtime pay,
paid parental leave, and health insurance with employer contributions. People may be at a serious
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economic disadvantage compared to regular employees if their gig employment doesn't pay
Overall, despite the advantages of creating their own schedules and being their own bosses, the
way gig platforms function creates significant barriers to young adults' long-term engagement.
The absence of benefits, notably health insurance, was a significant worry with gig work.
Benefits were cited by the majority of research participants as a key benefit of traditional
employment, which is one reason why almost all of them were interested in obtaining full-time
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The gig economy is made up of people who work on a short-term basis or as sole
technologies, not synonymous with low-end employment, and is a more economical employment
People working in the gig economy can register to work on the platform, and today the
gig economy is large and growing every day, with the number of temporary workers expected to
increase by more than 30 million worldwide in the next year. There are many reasons why people
want to join the casual workforce: mainly because it offers workers the flexibility of working and
the ability to telecommunicate. So part-time workers can choose their own free time to get the
job done.
According to a 2019 report by MasterCard, the global gig economy generates $204 billion
in revenue and is projected to expand by 17% by 2023. In the U.S., it is expected that the country
could witness even more odd-job workers by 2027. According to a report by Intuit, in the year
2020, 25-30% of the U.S. workforce consists gig workers and more than 80% of large companies
already plan to take on large numbers of gig workers in the coming years, which could
significantly reduce their company's financial outlay. Many independent workers today prefer to
have flexible hours when looking for work, especially during the epidemic, and this requirement
is especially important for parents who need to stay home to care for their parents and tutor their
children in school. The economic crisis and the impact of covid-19 have led to the bankruptcy of
many start-up companies, which are looking for other jobs as part-time workers. And some large
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companies, due to the economic downturn, can get the best talent at a reasonable price for a short
period of time, friendly to both parties. This is different from a company's full-time employees,
where the company does not need to pay for the odd jobs with five insurance and extra overhead
costs.
In the age of global outsourcing on internet platforms, the odd job economy is tearing
apart the traditional workplace. It is taking advantage of the fact that for the demand side, they
only need to place an order on the Internet, and there will be a large number of skilled people
putting in their "resume", and then the demand side can select the employees who meet their
needs from the large number of talents. Due to the rapid development of the Internet, the world is
now developing a huge, odd job market, and the odd job market is thus polarized, namely the
low-end odd job market and the high-end odd job market. In the low-end odd job market, the
industries such as online taxi, part-time take-away workers, couriers and errand masters, which
are paid on the basis of the piecework system, are the low-end odd job market. This kind of
market is very popular at present, because it has free working hours and achieves "more work,
more pay", which is exactly what many unemployed people and failed entrepreneurs will apply
for in the short term. In the high-end odd job market, such as the high-end talent market, medical
and education, students from universities and scientific workers from research institutes are
suitable "supplies".
With the booming odd jobs market and the increasing number of flexible workers, their
skills training, paid leave, and rights protection are not better protected. The odd jobs are
affecting people's better employment and since there is no social security provided for gig
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workers, the social costs of workers in the gig economy will be largely yield by individuals on
their own. As gig workers are freelance workers hence all risks associated with the work is the
individual’s responsibility.
to be working in the casual labor economy, and that number is growing. Some join the casual
economy for the extra income, while others use it as their primary job. With the rapid growth of
the Internet, working from home may have become the preferred and norm for the masses,
especially since the outbreak has left a large number of workers facing home quarantine or
unemployment, with the percentage of part-time workers likely to exceed 26%. Even before the
pandemic, a Zurich Insurance study found that 38% of full-time workers in Malaysia were
considering exposure to the odd-job economy in the future, a figure already 20% above the
global average.
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2.3- Financial Instability
Gig workers make up almost 30% of the Malaysian Labour force, which has since been
booming, especially after the Covid-19 Pandemic phase which caused people to lose their jobs
and participate as gig workers in the economy. Gig workers may vary across various sectors,
including professional and non- professional. Most Malaysian gig workers fall in the non -
professional category who do either e-hailing such as Grab and AirAsia drivers or delivery
services such as GrabFood, FoodPanda drivers. These workers are often exploited in terms of
paying schemes, commissions and bonuses promised. E-hailing riders get paid for their job
based on how many deliveries they can do in a day and thus the income earned is unstable. This
issue created a ruckus recently where the food delivery riders went on a strike on August 5, 2022,
to protest on the income level received. The income received by the food delivery riders are said
to be inadequate in response to the high cost of living as delivery riders are paid a flat rate per
delivery and may earn additional charges depending on the time and distance of the order.
According to research conducted to survey financial health of Grab Workers in the Gig
Economy, the young Grab Workers aged between 15-24 years old tend to work for short hours
which results in lesser income and they do not spend within their means which results in
financial distress among them. This issue can also be applied in the global gig workers issue
where according to Forbes’s study, gig workers have little to no emergency funds saved up. The
workers are said to have only about $1,000 or less savings while more than 40% had no savings
at all. This scenario is also applicable in countries like China and Malaysia where according to
MetLife Foundation research, minority of gig workers in both country saves their earning. Only
less than half of gig workers are able to meet their daily commitments which includes paying
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bills and debts on time as well as purchasing essential goods. While in China, only 22% of gig
workers had savings for emergency use. Almost 80% of the gig workers had to borrow money
just to meet their essential needs for daily life usage, and this addresses the seriousness of this
issue.
The COVID-19 pandemic had the highest impact on gig workers' financial status,as men
experienced income reduction and felt strain on financing basic needs. We can use the Income
Effect to explain further regarding this scenario. Income effect explains the relationship between
income of an individual with its consumption level of goods and services. Generally, as the
income of an individual increases, the purchasing power of the individual increases which causes
the consumption level of goods and services to rise which is due to higher level of disposable
income and savings. A reduction in gig workers’ income also leads to less disposable income
which also decreases their purchasing power and consumption level. As an example, low-
income households experience financial difficulties the most when their expenses exceed their
income earned or savings. This is because gig workers earn relatively less than non-gig workers
and most of the gig workers have to bear their gig expenses on their own. This issue also has an
adverse impact on the country’s economic growth where lower consumption level leads to a
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3.0 Wellbeing of Gig Workers
The scope of gig work has grown since companies began employing people who were
willing to work part-time or on a contract basis to meet their talent demands. However,
increasing reliance on gig workers at a time when most of the gig economy is still unregulated
and unchecked could have a huge wallop on gig workers' well-being. When the well-being if
workers aren’t taken care could lessen the motivation of gig workers which will lead to poor job
performance that is associated with higher rates of absenteeism, turnover which could highly
employee well-being is fundamental. For gig workers, maintaining a sense of wellbeing and
Firstly, employers can provide financial security to gig workers to boost their well-being.
For example, employers can provide health insurance, professional development programs and
compensate their workers as a financial protection. Since the COVID-19 pandemic affected a
large number of gig workers, employers can provide health insurance to them. For instance,
giving gig workers 14 days of sick leave if they are unable to work and pay the cost of COVID-
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19 checkup. Employers may also offer health services to gig workers, such as paying for hospital
treatment.
development programs to their workers. Companies might provide coaching and training to
enhance the skills of their employees. Employers need to give employees all of the tools they
require to perform their duties. Employers are responsible for ensuring that their staff members
are treated with respect and dignity at work and possess transferable and current skills.
To illustrate, companies should provide Social Security Organisation (SOCSO) and the
Employees Provident Fund (EPF) to their workers. It provides benefits to workers and their
dependents in case of any emergency. Thus, the workers' safety will be more secure. According
to Aon’s 2020 Gig Economy report, programs and offerings that support flexibility and empower
employees, such as flexible benefit training and financial wellness programs, are essential to the
human workplace.
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3.2 Safety Net Issues
As gig workers, they may have done their best to adapt to the new workplace in order to
avoid causing problems, but unfortunate and odorless there are situations when the problem is an
company, especially the employees, were aware of common workplace safety issues and
collaborated to develop and manage occupational health and safety requirements to make the
workplace safer. Therefore, in the workplace, every employer should prioritize safety in order to
protect the property, employees, customers, clients, vendors, suppliers, and other stakeholders.
According to the Department of Statistics Malaysia Official Portal, 1.43 thousand people in the
One of the safety issues identified is a lack of proper safety induction, which can lead to
injuries to employees (Health and Safety Executive, 2019). Therefore, every employer and the
employees, especially the gig workers are responsible for developing (and revising as needed) an
existing safety and health policy, and the policy should be implemented within the organization.
Administrative levels, safe working environments, fire safety, safe use of chemicals, safe use of
electricity, safe use of tools, and proper personal protective equipment are some of the policies
that both employers and the gig workers need to follow to ensure a safe workplace. These
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policies were developed to provide employees with safe work practices training and education in
order to facilitate for new employees to understand the rules and avoid potential accidents.
Furthermore, every employer must update their company policy whenever there are changes in
the workplace so that everyone involved in the organization is more aware of workplace safety.
In addition, in every workplace where minor injuries may occur, every employer must
provide safety equipment such as a first aid kit equipped with emergency medical supplies so that
employees can use it in an emergency before being transferred to a hospital. Besides, fire
extinguishers and hoses must also be installed and inspected on a regular basis by each company
so that they can be used safely and prevent the occurrence of fires. Also, each employer must
provide personal protective equipment (PPE) such as goggles, gloves, socks, hats, and protective
lotion to their employees that work in factories. Aside from emergency equipment, the tools and
machines at the workplace should be ergonomically designed and easy to use to ensure a safe
working environment. For instance, stores should be organized and labeled, and the path used by
employees while carrying out their duties should not be obstructed or narrowed. To provide
employees with comfort, employers must also provide common facilities such as toilets,
In conclusion, employers must understand that the time they work is different from the
time they work in the office, as they are the gig workers. As a result, employers must adapt to
new communication styles and adjust availability expectations. A blended workforce is a unique
and evolving workplace dynamic, but if managed properly, it can increase the bottom line
between the employer and the employees. The employer also should make their gig workers feel
like they are a part of the team by getting to know them and seeing the needs of each project
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through their perspective, quality work, longevity, so appreciation for working relationships will
Gig workers all over the world have been facing the same problem which is inadequate
income earned to continue their living. This issue was also raised by the Malaysian gig workers,
especially food delivery riders who held up strike for a day in demand for a fair income payment.
Hence, the government as well as companies for whom gig workers work should introduce a
minimum wage for gig workers according to the respective industry to ensure the gig workers
There is no minimum wage range for the gig workers as they are not defined as employers
under the Malaysian Labour Act 1955 (Act 265). The minimum wage range set for the gig
workers should be around RM 1,800 in accordance with the higher cost of living after the
pandemic as our country faces inflation which causes goods and services prices to be escalated.
Most gig workers earned their salary based on the number of days worked and the number of
deliveries or trips made for food delivery riders and drivers. These gig workers will not receive
payment for the days not worked which is highly unfair as it will be harder to survive in the
unprecedented times. The current minimum wage of workers is below the living wage in Kuala
Lumpur which affects the spending power thus living quality of gig workers.
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Hence, the Local and State Government should work together and determine local
minimum wage. This is because cost of living differs in the urban and rural states therefore both
the government bodies should set a local minimum wage to ensure the wages are compatible with
the living costs. Apart from that, most importantly the government should classify gig workers as
employees to be entitled to receive such rights. To illustrate, the UK Supreme Court has filed for
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4.0 Conclusion
In conclusion,the gig economy has a legitimate position in modern society. It enables workers
to pick a flexible work schedule, which is not always possible with full-time employment.In light
of the increased expansion of the service sector and gig economy in general, the legal authorities
should offer careful analysis and investigation to guarantee that this human labor community has
at least moderate employment rights.In light of the increased expansion of the service sector and
gig economy in general, the appropriate authorities should offer careful study and investigation
to guarantee that this human labor community has at least the bare minimum of employment
rights.
One of the primary issues for gig workers is job benefit,social protection and skills.
Some recommendation that can be suggested is increasing initiatives that assist gig economy
employees in matching with varied platform providers based on their particular abilities, as well
as upskilling to give alternative gig job alternatives which is short term policy
the gig economy in matching with various platform providers based on their different abilities, as
well as developing skills to give alternative gig-job choices.Millennials in the labor field make up
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the majority of today's population. They are establishing the new normal in the modern
workplace by virtualizing many previously physical encounters. To preserve the welfare of gig
workers, governments should adopt gig economy employment laws or standards in terms of work
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