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Online labour marketplaces: job insecurity gone viral?

Online labour marketplaces are capitalising on increased numbers of “casualised” workers. Victor1558/Flickr

Some of the newest enterprises online are those which link workers to anyone who wants a job done. They’re not concerned with employment or jobs but with “tasks”. These are small, one-off, discrete portions of work for completion within a short time frame at short notice.

They are different from employment websites like which have essentially substituted for newspapers in employment advertising.

Websites Airtasker, Ozlance and Sidekicker show what’s on offer: home help tasks like cleaning or painting and small administrative jobs (Airtasker); web based assignments that can be done online (Ozlance); or explicitly business oriented, (Sidekicker), offering helpers for office work, events, hospitality, and promotions. Others include Odesk, Freelancer and Elance mostly offering online work like programming, web design and translation.

Online labour marketplaces are not that different to the traditional jobs board. Katchooo/Flickr

In one way, the online employment agencies are doing no more than providing a platform for what already happens informally through networks. They arguably extend opportunities for workers and businesses or households to make a mutually beneficial connection. They are also an inevitability of the internet age.

In addition, the online agencies extend what is already on offer by contracting and labour hire companies, as well as self-employed contractors such as office temps, cleaners, IT specialists, gardeners, labourers, or tradespeople. But in the new model the middle-man (the contracting company) is eliminated –notwithstanding the cut which the online agency takes for itself out of the payment to the worker.

A more casualised workforce

The type of work offered by online employment agencies extends the “casualisation” of the workforce accounting now for around 20% of Australian employees. This casualisation is increasingly part of ongoing employment arrangements for many businesses. The “helper” employed through an online agency is in effect another “casualised” worker.

But unlike other types of contracted and casual employment, these employment relationships fall outside any labour regulatory framework as provided through the Fair Work Act. This means they do not conform to minimum wage or health and safety requirements or provide for any other entitilements. While this is not dissimilar to the situation of any self-employed contractor, its desirability depends on whether the workers have a real choice in regards to this kind of employment and are able to negotiate satisfactory pay and conditions.

Bidding rates down

On the Airtasker website, a job to clean an apartment involving a couple of hours work offers US$40. Airtasker charges 15% commission for the job so the total payment the worker received - US$34. At the time of my perusing, on the Ozlance website someone is looking for a web developer which has attracted 27 quotes ranging from A$250 to A$2000.

These bidding arrangements for jobs may encourage undercutting of wages across the board. While the agencies themselves insist that quality - as monitored through an online review process - is also an important component of the bidding and pricing process, it is hard to see that this will outweigh price for most contracts, especially where quality factors are similar. Much online work can also be outsourced to low wage countries as we can see on the Freelancer Australian website, where people are offering their services for as low as US$6 and US$7 per hour.

Sidekicker runs a different model with a set minimum fee of A$29 per hour but deducts 20% for itself so the worker will end with A$23 per hour – maybe not so bad depending on what the job involves.

The online employment agencies promote the freedom and opportunity of freelancing work, but I wonder how many people find this type of work greatly congenial and rewarding over the long term. One IT commentator suggests the returns to workers are low and that many people signed up for Airtasker get very little, if any, work at all.

A sober lesson from the US

The type of employment arrangement from the online agencies recalls some of the disturbing employment trends in the United States as portrayed in a Foreign Correspondent program and in other articles. The essence of these stories is that the post GFC recovery in employment in the USA is quite weak with many people forced into part time, low wage and casual employment because there are so few decent jobs being generated. Nobel laureate Joseph Stiglitz believes this trend is consolidating inequality and also holding back the recovery.

In the Foreign Correspondent documentary, a young woman is employed in a bar with a nominal wage of US$2.13 per hour and relies on gratuities to make a living. What kind of employment arrangement is this? In fact, it is an employment relationship which the online agencies also propagate.

The individual worker comes into the “labour” market unfettered by any requirements, regulations or rights in relation to wages and conditions – simply what she can obtain on the day for her labour in a marketplace much as a farmer would auction a sheep or a box of oranges.

Should we be worried about this trend in online employment agencies then? It depends. In an economy and labour market with plentiful opportunity for decent work, it is really of no account and may suit some workers and some employers. But where opportunity for decent work is eroded as reports from the USA suggest, then the proliferation of unregulated employment arrangements is concerning in that it exacerbates inequality and dampens economic growth as Stiglitz argues.

This is the fourth piece in our Insecure work series. Click on the links below to read the other pieces.

Workplace ‘flexibility’ on insecure ground

Is job insecurity becoming the norm for young people?

Viewpoints: should penalty rates be abolished?

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