Seamus Nevin on new work policies after COVID-19

Seamus Nevin is Chief economist for Make UK (formerly EEF) London, UK. Prior to joining EEF, Nevin was head of policy research at the Institute of Directors (IoD). He has served as a member of the chancellor George Osborne's National Living Wage advisory group and is a current or former member of numerous boards and advisory groups. We spoke to him about the advantages and disadvantages of the rise of labour platforms as well as its wider impact on the economy and society as a whole.

Could you explain what a labour platform is? Who creates them and who uses them?

Labour platforms are a recent online innovation that facilitate workers looking for a job or a task that they can do to perhaps supplement their income, or looking for a full time role and they use this type of platform to find that kind of work. And also match employers or our providers who are looking for people to fill the task that they have and need completely.

What are the advantages and disadvantages of working for a labour platform?

Platform work has revolutionized the ability of people to access work. It has created huge benefits for certain cohorts by enabling people to access work more easily and in a more timely manner, for example,

allowing certain demographics that have historically been more disadvantaged in a conventional labour force, such as recent immigrants, single parents, elderly people looking for part time employment, access to a job and paid remuneration. At the same time, it benefits employers by allowing them to have access to a pool of workers on a much broader basis and an aggregate demand to get experts skills for specific tasks or equally to just access workers in a more speedy and cost effective way. But of course, this also poses challenges in terms of how labour regulations and and remuneration enforcement is going to operate in a much more global online world.

What motivates people to sign up to a labour platform? Is it a matter of necessity or part of the global trend of organising work around life and not the other way around?

I think most of the evidence shows that people who work with online platforms are quite happy with the terms and conditions of those jobs and they appreciate the flexibility and the types of work that they’re doing. So there is a clear trend that it has enabled people to access work in an easy or more flexible way to suit their lifestyles. But equally on the other side of the coin, there is a degree of forced entrepreneurship – people using it as a safety valve when they become unemployed or when it is difficult to find alternative forms of work. They can access work through these platforms in an easier, speedier way, but it is not necessarily their first choice if they prefer to have a full time, more conventional type of role. So it is both a social safety valve, supplementing the welfare state for people who need access to work because they can’t find alternative employment, and offers flexibility and ease for people to access work in an ad hoc way that suits their time and lifestyle needs.

What are the economic consequences of an increase in labour platforms?

The consequences are quite interesting because in certain cases, if it’s causing a challenge for the national exchequer it is because of the decline in the tax take, that traditionally comes from full time employment. If you’re a self employed worker working via a digital platform, you probably don’t pay as much tax in many jurisdictions as you will otherwise if you are a full time employee. And that poses challenges for things like provisional public services.

At the same time you’re providing a benefit to states by reducing the level of unemployment during periods of economic downturn, ensuring that people have access to paid remuneration to paid work and therefore don’t rely on things like unemployment benefits or the social welfare state, and reducing the burden on the state and on the taxpayer to support those people. So it poses interesting trends that are both beneficial but also challenging in terms of the way the state operates.

Skilled workers such as mechanics and engineers are also entering the “gig economy.” How do you see this type of work evolving?

Well I think one of the interesting things about the whole gig economy and the rise of these platforms is that some of the most obvious and publicly available professions, things like taxi drivers and delivery services for takeaways, etcetera, are the ones that people are most familiar with. But actually the level of growth in those professions hasn’t been huge. Some of the biggest growth areas have been in more conventional forms of employment like legal services, financial services, cleaning services, more historic types of employment. And really all that has happened here is that there has been a change in how people access that kind of work. So the jobs are by and large jobs that pre-existed, but these digital platforms make it easier for people to avail of that kind of work.

 

Why is it so hard to keep track of those engaged in platform work? How can we invest in better data?

I think the data challenge that has been thrown up by the emergence of the gig economy is one that lots of states are grappling with. It imposes all sorts of challenges whether it be for state bodies like the exchequer in terms of their ability to collect the appropriate amount of tax for paid work that’s being done, or equally understanding the demographics who are accessing this type of employment, the nature of the work that they’re doing, whether it is part time self-employment or whether they have full time employee status, what that means for their access to workers rights and entitlements and where the risk and responsibility lies. It’s going to be a huge challenge. The other key aspect of this is personal data.

So as a worker on these platforms, you hand over a degree of personal information but you don’t necessarily have access to getting that data returned to you. If you want to move from one platform to another for example, and take the ratings that you’ve received, customer reviews for the services that you provided in the past, which are emerging increasingly as a form of modern CV on these apps, we need to make this information portable to other apps.

There are a lot of questions around the data that is used on these platforms and how it becomes disseminated to the different levels, whether it is the individual worker themselves, the firm that’s offering the work available or indeed national representative organizations and the state itself.

How can the public sector ensure the development of socially responsible labour platforms in terms of, you know, legislation and, and what's been done so far and what needs to be done in future?

I think, again, there’s a lot of really interesting stuff happening in this space. There are some examples of people relying on legislation and forcing or trying to force gig platforms to comply with national laws. In some cases that works. In other cases it’s proving more difficult. That’s the kind of stick approach. And at the same time we’re seeing an increasing trend towards looking at “carrots”, incentives for people to do the right things, whether that be a social fair employment charter that companies are encouraged to sign up to because you create a level of awareness amongst their consumers who then expect that level of service and treatment for the workers on a particular platform if they’re going to avail of the services and be customers of a platform.

Equally, they’re increasing growth of things like seed funds, where the independent trust or local government body offers sums of money to developers to develop socially responsible platforms that tackle some of the emergent issues that these gig jobs are creating around access to things like social security benefits, payment, childcare, education opportunities. It is, again, a challenge, but also an opportunity that the digital space is providing for workers.

International media, from CNN to Techcrunch, have expressed their concern regarding the lack of rights and access to emergency funds for platform workers in Europe and the UK. What do you think the governments could do to solve this?

The UK is an interesting case in that the definition of a worker is not something written in law. Instead, we have a common law system where rights and protections that are afforded to workers whether employed or self-employed are determined by convention, by previous court case rulings. And what we have found historically is that the traditional bargain is that the self-employed pay less tax in the good times but are therefore entitled to less social protection in the bad times. Actually, that has slightly changed with the outbreak of the unprecedented coronavirus spread that we’ve seen and the great number of gig workers in the UK economy (about 3.8 million self-employed) are now entitled, for the first time, to access up to 80% of their income being paid by the British government. Normally that is a protection that is only afforded to full-time employees and, while it is donated in exceptional circumstances, it may become a precedent, which becomes significant in terms of the future rights and entitlements that gig economy and self-employed workers are able to obtain. So this is potentially a revolutionary moment in British economic history.

Platforms like Deliveroo in the UK are the target of criticism for setting up an inaccessible hardship fund for couriers. What learnings do you think this pandemic will bring to the gig economy?

Lots of platforms and gig work providers offer some form of safety net for their workers, whether it be bread funds or child care responsibilities or other forms of social protection for the informal nature of work that their self-employed workers do. I think one of the key takeaways from this unprecedented coronavirus pandemic is making sure that those interventions can be targeted in time, where the workers need them and when they need them. The key challenge has been ensuring that we have reliable data and information on identifying who those workers are, and that applies not just to the platforms themselves but also to government policymakers. So we’ve seen a lot of conversations in recent years around how the welfare state needs to adapt to the changing nature of work. One of the key takeaways from this unprecedented pandemic would be not only to ensure that we have accurate data that enable us to target interventions for the workers when they need them, but also understanding increasingly the nature of informal work and how it has changed the demands on the welfare state so that we can offer the kind of protection and social security that these workers need.

How do you think the coronavirus pandemic will change our society and do you think it will boost the adoption of the gig economy?

One of the first things that has come about from the coronavirus pandemic is that it has opened up a conversation around whether a welfare state system and social protection that has been designed to meet the needs of 20th-century employment, the kind of 9–5 Monday to Friday job, is really suitable in a 21st-century environment where people are working more flexibly. As a result of that, many policymakers are exploring whether something like the universal basic income or other forms of social protection should be adopted in the future. More immediately, what we’re seeing with more people working flexibly and from home, using technologies that gig economy-type workers have been using in recent years to enable that form of flexible work, is likely to lead to an increase in people wanting to work more flexibly in the future and engaging in gig economy-type work. I would hope that from that there’s a greater recognition of the kind of challenges that people in the gig economy and the self-employed more generally face, the kinds of supports that they need, and that we move into a world where we recognize that the types of jobs that have historically been deemed as low value are actually fundamentally important for the successful function of our societies, that these workers deserve similar types of rights and protections to the rest of the economy and that we opt into policies that enable that in the future.