On Demand Market
Content
On-Demand Economy: a revolution of the job market?
The history of humanity is about constant change. Social, political and environmental
transitions have been accompanying mankind throughout the centuries, so have economic
transformations. Trade, money and capitalism, just to name a few out the numerous and
groundbreaking inventions, which have shaped the life and productivity of people on
Earth.
One of the greatest revolutions came in the early 1900s when Henry Ford created the first
assembly line, giving a new definition to the division of labour. Production became a lot
quicker and cheaper and consequently the luxury of automobiles finally came to be
available for the masses. Many argue that the appearance and aggressive expansion of
modern ‘on-demand companies’ will bring a similarly critical change in the job market.
On-demand companies connect freelance-workers with consumers by using computer
technology. Need a chauffeur, doctor, lawyer or a consultant? You not have to do
anything but choose from a great variety of freelancers, press a button on your computer
and they are right at your door. In a manner of speaking, it makes life easier and more
convenient for both the worker and the employer. But what is the cost of such great
flexibility?
It is undoubtedly true that working flexibility is generally good. It gives the ‘employee’
the great advantage of freedom that is especially handy when it comes to organizing
everyday life. However, they often overlook the fact that this type of freedom also makes
them more vulnerable, especially when they get older. In our welfare states employers,
companies pay for their workers’ health insurance, leave and pensions. But when there
are only ‘occasional’ employers all risks are pushed back to the individuals.
Apparently, there is an immense need that Western governments respond to this
phenomenon, otherwise the social nets that have been being built for long decades will
soon turn into useless institutions. All Western systems of social care are highly tied to
companies and thus, although not intentionally, grade freelancers and contract-workers as
second-class citizens who are not provided the access to pensions and, at least to basic
healthcare. Social support should be made tied to the individual, equally guaranteeing
basic support for all citizens.
Nevertheless, we should not forget to mention that the introduction of such measures
would require either the government or tax-payers to cover all the new costs. However,
neither of these options is without serious drawbacks. In the former, tremendous strain
would be put on state budgets. National economies are already in debt and a growth of
expenditures would only lead to growing instability on the market that is most unwanted.
In the latter, purchasing power would drop hence financial insecurity would grow. All in
all, there is every likelihood that if the remaining tax-payers are made to support those
who have for example, never built up pensions, there will be a distinct possibility that
civil unrest will grow.
Albeit many suggest therefore that we should get back to 'traditional' employment
patterns, the bad news is that all trends suggest that this transition is irreversible. About
53 million Americans are already working as freelancers and their numbers are gradually
increasing. Earning money just by putting one's idle devices and time to use is definitely
alluring for many, so it may be safe to deduce that the trend will not change.
Consequently, states will have to adapt taxation and social care systems to the changed
circumstances and will also have to accept that Adam Smith's 'invisible hand' will be
influencing the market significantly more than it has moderated it since John Maynard
Keynes' and Roosevelt's New Deal. And that may not be an easy task but it does not at all
seem to be impossible.
On balance, the overall picture seems to be that although the growing importance of ondemand economy will lead to crucial socio-economic changes, we can presume that,
albeit at great costs, but governments will be able to take up the challenges of the
transition of the job market. I believe that this change will not be as radical as some
would claim, hence I would hesitate to call this a revolution.
The history of humanity is about constant change. Social, political and environmental
transitions have been accompanying mankind throughout the centuries, so have economic
transformations. Trade, money and capitalism, just to name a few out the numerous and
groundbreaking inventions, which have shaped the life and productivity of people on
Earth.
One of the greatest revolutions came in the early 1900s when Henry Ford created the first
assembly line, giving a new definition to the division of labour. Production became a lot
quicker and cheaper and consequently the luxury of automobiles finally came to be
available for the masses. Many argue that the appearance and aggressive expansion of
modern ‘on-demand companies’ will bring a similarly critical change in the job market.
On-demand companies connect freelance-workers with consumers by using computer
technology. Need a chauffeur, doctor, lawyer or a consultant? You not have to do
anything but choose from a great variety of freelancers, press a button on your computer
and they are right at your door. In a manner of speaking, it makes life easier and more
convenient for both the worker and the employer. But what is the cost of such great
flexibility?
It is undoubtedly true that working flexibility is generally good. It gives the ‘employee’
the great advantage of freedom that is especially handy when it comes to organizing
everyday life. However, they often overlook the fact that this type of freedom also makes
them more vulnerable, especially when they get older. In our welfare states employers,
companies pay for their workers’ health insurance, leave and pensions. But when there
are only ‘occasional’ employers all risks are pushed back to the individuals.
Apparently, there is an immense need that Western governments respond to this
phenomenon, otherwise the social nets that have been being built for long decades will
soon turn into useless institutions. All Western systems of social care are highly tied to
companies and thus, although not intentionally, grade freelancers and contract-workers as
second-class citizens who are not provided the access to pensions and, at least to basic
healthcare. Social support should be made tied to the individual, equally guaranteeing
basic support for all citizens.
Nevertheless, we should not forget to mention that the introduction of such measures
would require either the government or tax-payers to cover all the new costs. However,
neither of these options is without serious drawbacks. In the former, tremendous strain
would be put on state budgets. National economies are already in debt and a growth of
expenditures would only lead to growing instability on the market that is most unwanted.
In the latter, purchasing power would drop hence financial insecurity would grow. All in
all, there is every likelihood that if the remaining tax-payers are made to support those
who have for example, never built up pensions, there will be a distinct possibility that
civil unrest will grow.
Albeit many suggest therefore that we should get back to 'traditional' employment
patterns, the bad news is that all trends suggest that this transition is irreversible. About
53 million Americans are already working as freelancers and their numbers are gradually
increasing. Earning money just by putting one's idle devices and time to use is definitely
alluring for many, so it may be safe to deduce that the trend will not change.
Consequently, states will have to adapt taxation and social care systems to the changed
circumstances and will also have to accept that Adam Smith's 'invisible hand' will be
influencing the market significantly more than it has moderated it since John Maynard
Keynes' and Roosevelt's New Deal. And that may not be an easy task but it does not at all
seem to be impossible.
On balance, the overall picture seems to be that although the growing importance of ondemand economy will lead to crucial socio-economic changes, we can presume that,
albeit at great costs, but governments will be able to take up the challenges of the
transition of the job market. I believe that this change will not be as radical as some
would claim, hence I would hesitate to call this a revolution.
