Workers’ income decreased during COVID-19, particularly gig workers, that at that point experienced an abrupt decrease in employment. And due to the rapidly decreasing economic outlook at the time, several gig workers required selling part of their assets so as to provide for their loved ones.
The results of the information obtained are the following:
- Based to the EJAVEC journal’s results, gig workers must continue on with their company in order to earn a living, and working long hours may adversely impact a region’s economy as time passes due to reduced worker productivity.(Hanivan & Rakhmawan, 2023)
- Based on information gathered by IGPA MAP Fisipol UGM, the income of gig workers decreased to 67% as a consequence of COVID-19. This was due to a variety of factors such as a decrease in the demand for food-related services and a decrease in the revenue that gig workers produced. Furthermore, gig workers are vulnerable to welfare weaknesses, especially those who possess less education and more internet access, and the employment they do tend to be less specialized.
- Multiple studies indicate that factors like excessively long work hours, ineffective mileage, and obstacles to technology and the internet connection all play a significant role in an individual’s decision to work for themselves as a freelancer. (Darmawan & Muttaqin, 2023)
Advantages and Disadvantages of Gig Workers Post-Pandemic
Advantage
Gaps in time: Since freelancers choose their own work schedules, they can schedule time for other pursuits or personal problems. Numerous options: Independent contractors have the freedom to choose from a range of platforms and services, tailoring their job to their interests and skill sets.
Opportunities for employment: The COVID-19 pandemic has raised demand for independent contractors, particularly in the delivery, passenger transportation, and food services industries. This has given these contractors the chance to work and earn money.
Loss
Lack of protection:
Independent contractors are more susceptible to financial and medical emergencies since they do not have access to sufficient social security or health care.
Limited income: Some freelancers have seen income reductions of up to 67% due to the COVID-19 epidemic.
technology constraints: Certain independent contractors lack access to technology
Read More: Data Power: Bagaimana Sains Data Mengubah Wajah Pengelolaan Pandemi COVID-19?
Solution and Healty Approaches
The resilience of Indonesian gig economy workers has been severely tested by the impact of COVID-19, as highlighted in a recent survey conducted in collaboration with Sampingan and 60 Decibels. The report underscores the urgent need for innovative financial technology solutions to safeguard the financial well-being of approximately 40 million gig workers in Indonesia.
Challenges Faced by Gig Workers
The survey reveals the distressing reality faced by gig workers, with many resorting to selling belongings and depleting savings to sustain themselves. Reduced earnings, particularly among workers engaging in face-to-face interactions, have exacerbated financial hardships.
Impact of COVID-19 on Income
Prior to the implementation of large-scale social restrictions, over 40 percent of gig workers earned more than Rp 3 million per month. However, by June and July, this figure plummeted to a mere 5 percent, with more than half earning below Rp 1 million monthly. Notably, workers providing in-person services such as home health providers and ridesharing drivers bore the brunt of income loss.
Shifts in Employment Strategies
In response to the economic downturn, gig workers have demonstrated adaptability by seeking alternative on-demand jobs. While concerns about COVID-19 persist, the primary worry for many workers remains the impact on their livelihoods rather than their health.
Financial Vulnerabilities Exposed
The survey underscores the precarious financial situation of gig workers, with a significant portion unable to cover household expenses for even a month without resorting to borrowing. Coping mechanisms such as reduced consumption, depletion of savings, borrowing, and asset liquidation are widespread but unsustainable.
Opportunities for Financial Technology
Despite the challenges, gig workers exhibit resilience and determination to improve their financial stability. A significant percentage has embraced digital platforms for additional income and intends to explore new opportunities in the future.
Addressing Financial Needs
To support gig workers effectively, innovative financial technology solutions are essential. These could include a comprehensive mobile app aggregating earnings from various sources, facilitating regular savings, and providing access to small-ticket credit for essential expenses or skills development.
Focus Areas for Financial Support
Short-term liquidity needs, such as access to cash for job-related expenses, take precedence over long-term financing concerns among gig workers. Leveraging smartphones as essential tools, initiatives like device protection insurance and income protection schemes can enhance financial security.
Conclusion
Gig workers play a vital role in Indonesia’s digital economy, and their financial resilience is paramount for sustainable growth.
By harnessing the power of technology and innovative financial solutions, entrepreneurs and investors can empower gig workers to navigate economic uncertainties and build a more secure future Smita Aggarwal and Tilman Ehrbeck, global investments advisor and managing partner at Flourish, emphasize the imperative of addressing the financial needs of Indonesian gig workers to ensure their continued contribution to the digital economy’s expansion.
Penulis: Nadia Nasswa Dila
Mahasiswa Jurusan Pendidikan Bahasa Arab, Universitas Muhammadiyah Prof. Dr. Hamka
References
Darmawan, R. K., & Muttaqin, A. A. (2023). Analisis Faktor-Faktor yang Mempengaruhi Masyarakat Menjadi Gig Worker. Journal of Development Economic and Social Studies, 2(4), 774–788. http://dx.doi.org/10.21776/jdess.2023.02.4.06
Hanivan, H., & Rakhmawan, S. A. (2023). Gig Economy During Pandemic in East Java. East Java Economic Journal, 7(1), 69–89. https://doi.org/10.53572/ejavec.v7i1.88
Editor: I. Khairunnisa
Bahasa: Rahmat Al Kafi
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