gig economy

A New Era of Social Protection for the Diversified Workforce

Kristin Nordmark

Kristin Nordmark is Project Assistant at Reshaping Work and an experienced content writer.

Jovana Karanovic

Jovana Karanovic is an assistant professor at the Rotterdam School of Management, Erasmus University and the founder of the Reshaping Work Foundation.

Jelena Sapic

Jelena Sapic is a Project Manager of Reshaping Work Dialogue initiative at Reshaping Work and co-author of the recently published guide Securing the Future: Social Safety Net for All.

In a fast-changing world of work, where new technologies and economic trends are heralding a growing number of self-employed (e.g., gig workers, remote workers), important questions arise about protecting this non-traditional workforce. In light of inflation, high cost of living, and stagnant wages, the lack of robust social protection for a new generation of workers urgently needs to be addressed through proactive policies.

Appreciating the unique challenges that emerge in this evolving landscape of work, we at Reshaping Work brought together a diverse group of stakeholders to discuss how to tackle the issue of a social safety net. In pursuit of a future where no workers are left vulnerable and everyone can expect a minimum level of social protection, we translated their expert opinions into concrete policy recommendations, which we published in our report, “Securing the Future: Social Safety Net for All”.

Reshaping Work is an Amsterdam-based foundation facilitating multi-stakeholder dialogue to address the complex challenges and opportunities confronting the contemporary workforce in Europe. This report on social protection is part of our Dialogue initiative and the result of two months of discussions between trade unions, platforms, policy makers, researchers, and international organisations. Our goal is to showcase the ways in which we can go beyond current classifications to ensure a social protection system that covers all workers at the EU level.

What Should Constitute a Minimum Level of Social Protection?

In response to the diversified workforce, mainly the growing number of platform workers, the EU has taken steps with its Platform Work Directive, a legislative proposal aimed at redefining the status of platform workers and expanding social safeguards. Unfortunately, while the EU’s platform work directive addresses some of the issues faced by platform workers operating under dubious self-employment arrangements, it falls short of encompassing the genuinely self-employed, who find themselves excluded from the protection of traditional employment-based safety nets. In reality, what these shifts in the workforce call for are policies that transcend conventional employment boundaries.

While the participants in our discussions raised varied concerns, all stakeholders agreed that the minimum safety net needs a thorough expansion to meet the modern forms of employment. Nonetheless, serious questions arise about criteria and documentation regarding income protection for platform workers, such as proving that you are experiencing a considerable loss of income from lack of available jobs. In the unique infrastructure of platform work, how do you qualify for unemployment benefits, without the traditional employment status criterion?

Without a doubt, due to the saturation and volatility in digital labour markets, non-traditional workers are most vulnerable when it comes to sudden income loss. There needs to be a minimum protection floor in place at an EU level to ensure basic coverage for all workers. Moreover, we need to design mechanisms to address the unique position of the self-employed in terms of job volatility. An obvious difficulty is whether the EU has the competence to develop the social protection the modern workforce needs. We must reiterate that universality is a principle we cannot compromise on, however, to offer solutions that are feasible in the near future, we must explore innovative ways to safeguard workers across Member States.

Policy Recommendations

There is an urgent need to rethink and expand social protection to accommodate the evolving workforce. We therefore recommend implementing a minimum social protection for all workers, which should include income protection, healthcare, and disability insurance. The call for extending a minimum level of social protection, resonates with the central premise of our report: that social protection should be universal and inclusive. In this new era of work, where traditional employment boundaries are often blurred, ensuring the dignity and rights of every individual worker is a shared responsibility that transcends conventional models of social protection.

Moreover, we call for concrete mechanisms for claiming unemployment insurance. One way of addressing this is to enable workers on precarious contracts to offer proof of their willingness and availability to work. This would help make unemployment benefits accessible when a gig worker cannot find available jobs, or there is a sudden lack of demand for their marketable skill-set.

We also recommend that policy makers develop a combination of non-contributory and contributory schemes to adapt to the unique needs of a diversified workforce. The concept of non-contributory social security measures addresses the imperative to provide a basic level of protection to vulnerable workers, while concurrently promoting the expansion of contributory benefits for those who have the means to contribute. By combining non-contributory and contributory schemes, this approach seeks to strike a balance between safeguarding vulnerable workers and empowering those with the means to actively contribute to their social protection. In doing so, it paves the way for a more equitable and sustainable social safety net that resonates with the evolving dynamics of the modern labour market.

How Do We Finance Social Safety Net for All?

As is always the question with welfare, it is impossible to develop comprehensive social safety nets that transcend employment status, without grappling with who should carry the financial responsibility of these protections. Reflecting on contesting viewpoints, we recommend a blended financing model that combines contributions from the state, platforms, and workers themselves. This option offers a financing model that strikes a balance between key stakeholders.

State financing remains a fundamental component of this model, ensuring that social protection is still underpinned by the principles of universality and public responsibility. However, the model extends beyond this traditional approach by introducing platform financing. This acknowledges the evolving role of platforms as key players in the gig economy and suggests that they share in the responsibility for providing protections to the workers who rely on their platforms for income. Worker financing, another element of this model, empowers individual workers who have the capacity to contribute to their own social protection.

The blended financing model, as outlined in our report, encapsulates the potential for shared responsibilities. This functional arrangement ensures the fiscal sustainability of social protection while encapsulating the essence of a society where every contributor – be it the state, platforms, or workers – plays a pivotal role in upholding a safety net for all, reflecting the collective commitment of an inclusive workforce.

Way Forward

The time has come to acknowledge that conventional employment no longer serves as a reliable criterion for fair social protection. The rise of gig work, platform-based employment, and the flexible economy has blurred the lines between the traditional employee and the self-employed. If you’re interested in our comprehensive solutions, and want to explore more of our recommendations, we invite you to read our policy guide, “Securing the Future: Social Safety Net for All.” As we navigate a new era of work, it is evident the current social safety model is inadequate to safeguard the well-being of all workers.

We must confront the changing dynamics head-on and reimagine the fundamental components of social protection. At its core, social protection champions the innate worth and dignity of each human being and embodies the profound belief that every individual, regardless of circumstance, deserves basic rights and opportunities. As our world continues to evolve, so too must our commitment to ensuring the well-being of every person.

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