Here’s the downside to the sharing economy

Posted on June 13, 2016 in Debates – ROB/Commentary
Jun. 13, 2016.   SHERRI TORJMAN

Sherri Torjman is vice-president of the Caledon Institute of Social Policy.

The Rogers School of Management hosted a conference a few days ago on the sharing economy and the future of work. No one expected the generational divide that split the room like a fault line.

On one side of the divide were the so-called millennials, who are using their thumbs to restructure the foundations of our economy. Their smartphones are their point of access to an unlimited world of products and services. They are excited about the prospects of having anything and everything literally at their fingertips.

On the other side were the baby boomers, who were worried about the quality of work in the “sharing economy,” which is generating a patchwork quilt of employment hours rather than full-time, steady jobs with associated pensions and benefits.

The sharing economy is a term that refers to a new form of commerce taking the world by storm. Ride-sharing Uber and room-sharing Airbnb are typically cited as examples of companies operating within it, but these two successful examples are just the tip of the iceberg. An explosion of technology platforms is joining the buyers and sellers of goods and services in new electronic marketplaces.

In fact, the very term “sharing economy” may be a misnomer. Traditionally, sharing does not involve a cash exchange. “Technology-enabled marketplaces” may be a better characterization of the trend.

Many consumers appreciate the wide-ranging choice the new platforms permit. Some point to the environmental advantages of the sharing economy that encourage more efficient use of resources. And workers generally like the flexibility it offers. They can make money while studying or caring for children. They can supplement pay from other jobs to reduce debt or send money back home. The concern arises, though, for those who depend on these jobs as primary income. Here’s where the boomers start raising red flags.

Much of the labour market is morphing into freelance or gigs. More and more Canadians are becoming free agents who cobble together bits of work in order to get by. Workers increasingly are juggling two, three or more casual jobs. Exhaustion and stress take their toll on health as the working day gets longer and precious family time erodes.

These challenges are no different from those facing the current army of precarious workers in Canada, who earn low wages and have no job security, accident protection, sick leave or pensions. But the implications of the changing labour market may be bigger than quality of employment.

New technology platforms driving the sharing economy aren’t just disrupting traditional consumer exchange. They are shaking the foundations of our social security system, which is predicated upon a steady relationship with an employer who contributes financially to core social insurances − unemployment insurance, work-related injury and pension plans.

The new world of work is a less generous and less certain provider of these benefits. At the end of the day, governments may have to step in to fill the gaps in income adequacy, pension protection and health benefits that the new “gig economy” is leaving in its wake.

Perhaps all generations can agree that it makes no sense to slow down or stop technological innovation − especially with consumers embracing it full throttle.

But we do need to pay serious attention to improving the working conditions in the sharing economy. Only then can we all support this brave new world.

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