Working in an office has costs: gas to get to work, transportation fees, a morning coffee and lunch… it all adds up when you break down your weekly spending. As a result, working remotely is preferable for lowering living expenses.
Only about 6.45 million Malaysians are employed in the official private sector. This accounts for less than 40% of the labour force.[1] The rest are self-employed, unpaid family workers, and immigrants and expatriates with unenforceable contracts.
What is a gig economy?
A gig economy is a free market system in which temporary positions are common and organizations hire independent workers for short-term commitments. The term “gig” refers to a job that lasts a specified period of time. Traditionally, the term was used by musicians to describe a performance engagement.
Examples of gig workers include freelancers, independent contractors, project-based workers and temporary or part-time hires.
The boom of the secondary income
In Malaysia, low wages and poor working conditions under restricted contracts are further factors driving people to work in the gig economy.
Although there are drawbacks to doing a gig, such as difficulty finding clients, irregular income, and no formal welfare protection, the benefits of flexibility, freedom, and choice for gig workers, as well as extra income opportunities often exceeding normal salaries, are transforming the gig economy into a mainstay of the labor market.
The gig economy is not just e-hailing or delivery riders but includes many high-skilled and professional jobs such as practitioners in private medicine paid per patient, lawyers paid per client, tutors and academics paid per class, and accountants paid per audit.
In the technology sector, website designers, content developers, app creators, coders, and programming experts are now mostly gig-economy workers paid per job.
It is roughly estimate that 4.45 million people are already in this type of work which is around 26.5% of the workforce. This does not include many professionals or those with two jobs where the gig-economy is a top-up to their main work.
This secondary revenue stream could improve employees sense of happiness and wellbeing, which will definitely improve their day-to-day lives.
When we understand the gig economy in these terms, we can see that it will eventually become the primary source of income for most individuals, and we are already close to that now.
Addressing gig workers welfare
Policymakers do not appear to enjoy this prospect, and they are not rushing to pass laws and regulations to enforce workers’ rights.
Gig workers do not have employment rights because they are not employees, and implementing employees regulations for gig economy workers may mistakenly turn gig-work into formal employment.
While gig workers require pensions, health insurance, and other types of social security, they should be given in a different way than via legislation that converts gig economy jobs to quasi-formal positions.
The risk is that too many laws will suffocate the tremendous prospects of the gig economy and represent a backward step.
Gig economy impacting the future of work
Gig-economy workers can expect an expanding market, and with more customers and clients, more people will move positively into the gig-economy.
Even employers should hire gig-economy workers as freelancers and support staff. They should also introduce work-from-home(WFH), flexible working arrangements (FWA), and shorter working weeks to allow their employees to take on gig economy work.
If employees were given a four-day week, for example, they could use the extra days to supplement their income and would be less likely to demand wage increases from their primary employer.
The reality of the gig economy poses a significant policy issue in the next two to three years. More flexibility and fewer regulation, as well as tax reduction on secondary occupations in Budget 2024, will encourage people to work in the gig economy.
[1] https://www.freemalaysiatoday.com/category/opinion/2023/08/18/the-death-of-formal-work/
