New work arrangements in today’s labour market
New work arrangements in today’s labour market
Today’s labour markets feature a range of new and different working patterns from the past, with automation, digitization and non-traditional work hours featuring prominently. Are these advantageous or disadvantageous to workers, firms and the overall economy? This question will be explored in the light of new data on modern forms of self-employment, the gig economy and new working arrangements that have been changing the nature of work in the UK labour market.
good evening ladies and gentlemen welcome back welcome to professor machine well i'm very pleased to be given the opportunity to introduce this lecture by professor machine who's an authority on the subject so we're going to be very pleased and honored to listen to his lecture his presentation is going to be focusing on the deep changes upsetting the labor market because of automation and digitization as we all know this is very much in line with the subject matter of this edition of the festival let me see just a couple of words before i give the floor to our lecture new jobs have been created in all the industries over the past few years so the question of this panel discussion is what she are the advantages and what are the risks for workers and companies for the economy as a whole we're talking about the sharing economy geek economy digital economy includes a whole different culture of labor labor being organized on platforms and requires workers so that uh i can under should understand the objectives or to reach the corporate objectives so there are consequences in terms of employment and economic results so this is certainly a major challenge requesting a change of attitude on the part of the experts managers and even uh the young people that dealing with logistics and running around with bicycles and to quote based on how you experience algorithms and incentives emerging labour markets might look like a flourishing of new opportunities or rather a threat of a new slavery and a new conflict among between the different classes so these are decisive issues for our future hence our beliefs it is very important to hear our top experts as professor stephen machine talk about that professor machine ever since 1988 has repeatedly held positions at the university college of london and the center for economic performance at the london school of economics before becoming the cep's director and accepting a professorship in economics at the london school of economics in 2016 as you see reading here's a resume he's been a visiting appoint a professor at harvard university and at the mit he is currently a member of the council of the royal economic society and of the european economic association and he also has many different things on his resume i'd like to give him the floor anyway as he's a constant feature at the festival we're going to have a qna session after his presentation i'll be raising questions myself and you'll be given the possibility to ask your questions all together we're going to be here for an hour one and a half hour we'll see what the q a time is going to be so having said as much i would like to give you the floor thanks very much very nice um introduction um so i'm delighted to give this talk at this year's um economic festival um and the material that i'm going to talk about is uh as the titles it says here i'll be talking about the new forms of jobs that are present in many labour markets around the world um so to today's labor markets feature a range of new and different work patterns to those that were present in the past and some key features of these new forms of employment are issues to do with automation uh digitization of work and an increased incidence of non-traditional work hours all of these are featuring prominently in the new sorts of jobs that vehicle being created um in modern labor markets and so i guess the kind of big question that that results from these these changes in in the nature of work is whether is to what extent they are advantageous or disadvantageous to workers to firms and to the overall economy in terms of productivity and growth so what i'm going to talk about um in in my in my presentation uh is um essentially the wider implications of uh of an ongoing project uh that we have uh where where with various colleagues we've been collecting new data on forms of um of self-employment uh gig economy jobs uh new working arrangements and we're kind of interested in how visa been changing changing the nature of work um so so one recent trend as a in in seven in in in many labor markets uh across the world is the increased incidence of such work arrangements and these also have a fairly high policy relevance um associated with them one key dimension uh is was in in in in terms of uh work positions that people hold there seems to be a kind of increasingly blurred line between self-employment on the one hand and traditional employment and many of these jobs sort of fall somewhere in between uh i'll talk about some various various examples of them as as we as we go through but the kind of critical question from a policy perspective is whether um these sorts of new forms of employment offer increased flexibility that workers want uh their if their preferences flexibility do these sorts of jobs enable people to uh engage in in in in in forms of work but offered more flexibility um or are they more to be more likely to be dead-end jobs uh which people are doing because they're the only things that are available to them uh with little career little or no career progression um associated with them i guess we have a policy uh area that is very relevant here and speaks also to that notion that uh there's a kind of increasingly hazy distinction between self-employment and employment um is the issues of social insurance and uh and benefits um the the job-related benefits that people get attached to their work and so some of the data we've collected um actually asks the self-employed and gig workers uh what kind of benefits they might like were they available to them so i'll talk about that in a cross-country context uh from some of the work that we've been doing by collecting data uh on these forms of employment in in in different in different in well three different countries uh fortunately for here italy being one of them the uk and the us okay so there's business as i've already alluded to because i mean this big rise of alternative work arrangements um and uh these kinds of what people sometimes refer to as atypical uh work arrangements certainly compared to the old uh 35-hour nine to five um job that people might do per week uh where there's much more flexibility associated with them and so the kind of the kind of key areas where this is happening i think issues to do with the changing nature of self-employment so people doing freelance work for example people on different forms of temporary contracts people working for agencies who may well be classified as self-employed even though they're working even though they're being hired by agencies as well uh there's also been an increased incidence in some places of on-call jobs where people actually don't necessarily have any hours specified in their contract and they're just on call so for example there's been a big fairly big rise in zero hour contracts in in in the british labor market for example um what we don't know too much about from the existing research is what the key drivers of these factors are of these moves to these new forms of employment but clearly it is some combination of these lists lists of things i've put down here um technological change uh think about uber drivers uh responding to a digital analog when they're when they when when they're picking up rides to to to take people's places for example so technological change and automation of work has been a key factor uh that's enabled these forms of employment to enter and prominently um in in many labour markets around the world there's discussions about the fissuring uh or fragmenting of traditional workplaces uh there's also preferences for his preference flexibility but uh that you may think that uh workers may be willing to pay a certain amount to have more flexible flexibility in in their jobs there's also the counter back to that is the increased incidence of weak labour markets certainly since the onset of a great recession uh since 2008 uh and it may well be that people are actually doing these forms of jobs um because it's the only work that's actually available to them uh lava for it necessarily being a career choice being made out of several different options that might be available to potential employees and it's also there's also an interaction with labour market policies the obvious one being minimum wage floors for example self-employed are not covered by minimum wages traditional employees are but this hazy line in between for gig workers and so on um actually creates a potential tension uh again for whether minimum wages are actually by as binding in the labor market as um as uh governments would want them to be uh so all of these these kinds of issues that probably drive us about why we've seen these rise and these these forms of alternative work arrangements um so here's uh here's just a chart for the three countries on which i'll i'll present uh information showing uh the proportion of self-employed uh workers out out of total employment um so uh there's there's four lines on there because there's two reported for the united states one of which shows an upward trend and the second highest line there and one of which shows a slight bombing along or perhaps even slight downward trend the second one this is quite an interesting uh feature so the second one comes from the current population survey which is the regular survey undertaken in the u.s um every month its initial uh reason for being undertaken was to try and calculate the unemployment rates and people a large number of individuals have asked various questions about their work status and lots of other stuff um but actually shows a little downward trend whereas if you look at schedule to see tax filing uh numbers for the self-employed which arguably you would think would be more likely they actually go up and i think the fact that you can't necessarily identify um the um trend in the current population survey uh is is probably because people are a little bit confused about what the nature of their actual employment position is when when they're asked questions in surveys and so one of the reasons we've running and collecting our own data um on these questions is to try and pin down more precisely exactly what people are doing in their jobs and whether we can identify themselves employed or whether we can identify them as geek economy workers and and indeed uh workers on different forms of um employment contracts uh so in the you in in britain and the us you see this rise probably in self-employment in italy where trade where self-employment has traditionally been very high you can see it's actually coming down but it remains at a very high level uh as a share of jobs um and it and and there's a clear leaning in changing the composition of those jobs that's occurred uh with the rise of these sorts of alternative work arrangements um people riding delivery bikes and uh such around okay um so so so i think this offers i think these recent trends um offer significant challenges for economists and for policy makers and for other people who are interested in uh what's going on in the labor market i said one thing we really do need to know i've already alluded to this with respect to that previous figure i just showed is we need to better understand what the employment conditions and the status of independent workers are so you do really need to know a lot more about whether the on the one hand the demand for flexibility uh and on the other hand the issue of ours constraints and people not being able to supply their labor enough which one of those might dominate for people in these forms of forms of employment and related to that is protection against labor market risks that people might face if they're doing risky jobs which seem to have very little career progression for the future then that's probably not a good thing to be looking forward to in terms of where the labour market might be going um and for issues to do with inequality and so on as well the second thing that's a big challenge is how might one alter the provision of social protection in the face of these are very clear and marked changes in the emanater of work uh so what are the issues about social insurance and what would one want to extend social insurance benefits to independent workers in situations where they currently don't get things like pensions or sick pay or in the case of the u.s health insurance and so the provision of social protection is a very important policy question that relates to the these trends we've seen and there's also big implications for the overall economy um it may well be that the extent of labor market slack if you like the number of uh individuals who might work if they could work if they could find employment might not be being picked up quite as well by the overall unemployment rate these days because there's a large number of these short hour jobs that people are doing i'll also show you some numbers here but many people in these sorts of gig economy forms of employment and some forms of self-employment would like more hours if they could get them uh when they have an increased desire for ours and so you might think there's more labor market slack than is actually captured um in by the unemployment rate alone using uh language from the past in some ways you might think there's a larger reserve army of underemployed workers who have put downward pressure on wages in the overall economy and i'll come back to this towards the end of the talk um we might also think as i've already mentioned minimum wages may not may no longer be completely a binding wage floor for all workers and if that's what the target of that policy would be we might want to think about how that might be different uh if if policy can actually do anything to make sure that all workers get a decent wage from receiving a minimum wage uh in the labour market in which they're operating okay so we've undertaken in in part because many of the regular data sources that micro economists tend to look at uh in terms of the labor markets are rather unsatisfactory uh in terms of identifying uh these forms these new forms of employment i think the regular servers are getting better uh but they still have a large number of deficiencies about in identifying these new forms of work so we decided that we were going to collect our own data to try and pin this down so we've done three comparable surveys of self-employment alternative work arrangements and the gig economy in italy uh the uk and the us there's a very similar uh survey instrument that we use it's altered a little bit in the context of the labour markets in the different countries but the key questions we've asked are asked in exactly the same way um across these three countries so we've collected a bunch of information about demographic characteristics of individuals the characteristics of their jobs the contractual conditions under which they work and then we also ask questions about preferences for flexibility uh and or inflexibility in the sense of whether people are doing the job because it's the only one available to them and also if social protection wasn't made was made available to geek economy and self-employed workers uh what forms would they actually like so we've actually asked them to rank uh different forms of social protection okay um so the kind of what i'm gonna talk to you about today in in from in from the survey results is i'll just give you a fairly brief overview about these things on this slide but who works in self-employment alternative work arrangements in the gig economy some stuff about the patterns of work mostly about the hours that have worked in these jobs whether people are satisfied with their jobs uh the reasons why they do the jobs that they're currently working in when we surveyed them and this information about the ranking of benefits that might be available okay so to start with how many self-employed and gig workers are there who are actually uh actually in our surveys oh i should i should have said the sample size is you know somewhere between 10 and 20 000 people that we surveyed um in these in the three countries uh perhaps we and they are representative uh of of of employment uh we've validated that with large-scale uh sources of information perhaps the only issue if you want to be a bit critical about what we've collected these are online surveys so people have to be online to respond to them so you might think that maybe you get an increased preponderance of some people who are younger people for example uh who who may well be more likely to be online and older people okay um so here's some numbers here uh which which suggests which are very much in line with those the chart i gave before um italy's actually a little bit lower i'm self-employed as a proportion of a working age population but not much um and we seem to about somewhere about 12 to 15 percent of self-employed uh individuals doing in in in in the labor markets of these three countries and uh somewhere between about three to four and three to four percent of them are identified as geek workers in the data um if you actually multiply if you assume there's a gap before the us there because we can't quite pin them down separately between the employed and the self-employed but if you're willing to multiply the two together you get you get a number just above three percent on that final column um so probably a few more gig workers in the us than in the uk and then in italy but still somewhere around three percent of people doing two and a half to three percent of people doing uh gig economy work uh working on platforms working for likes aruba uh deliveroo uh and and so on okay so let me just let me take you quickly through the key aspects of the italian survey um and so this is an important factor the first thing here but a size of a proportion of its italian gig economy workers are doing this as a second job uh so uh whilst there are some people doing gig work as an as a first job and somebody who and some and a bunch of people who think they're gig workers but they're currently unemployed or state that their gig workers are very commonly unemployed uh a large proportion are doing uh holding down multiple jobs here so this is of course it's probably going to matter when we ask what reasons are for why people are doing geeky economy work would you welcome to come too soon uh the hours distributions of the self-employed and the uh and the gig economy workers are very different and you can see the self-employed have a big spike at 40 hours a week and was a range going from low hours to some rather high hours um the gig economy workers on the other hand are working a lot uh many of them are working short hours per per week so very much skewed down towards the left-hand side of the distribution probably what we'd expect but which just confirms this in the data here's some information uh about whether individuals are satisfied with the hours of work in their current contract or whether they'd like to work more hours or less hours so you can see for both groups there's an increased desire for working longer so this is an important fact that we might think about whether these jobs that aren't necessarily getting people enough income per week so for the self-employed this is not as pronounced as it is for economy workers where a large proportion of economy workers would like to be working longer hours almost 50 percent of the of the individuals to be classified as gig economy workers in the data so a large number of them would like to work longer hours uh so if we're thinking about people who are in precarious employment in some sense who are not earning enough income uh this seems to be where the web is stands um what are the reasons for working less than 35 hours amongst the self-employed um well the predominant most the most important answer seems to be not any available work so again that's reflecting that they would like to work longer hours than they currently do and the reasons for the declared hours of work in the gig economy again but the most important uh response is that work isn't available uh which again suggests there's probably a frustrated demand for for extra hours uh among amongst these individuals equally the second reason is the second um highest percentage around 25 is is is they're doing it for second uh as a second form of employment uh what about job satisfaction um well here's the responses for italy you can again see that gig economy workers seem to be much less satisfied with their job than the self-employed are uh the main reasons for working in big economy seem to be income related uh here's the main reason why uh the survey respondents said that they wanted to work in the economy so we also asked a question this comes back to the question of income risk uh but i i mentioned before we also asked a question about the extent of income income insecurity asking questions suppose you have an unexpected unexpected expense of 500 euros based on your current uh economic situation how would you cover that uh so you can see with some people who would be able to uh cover it with the money they've got in their bank account uh or in their on on their credit card uh but was quite a substantial proportion towards the bottom end of a table who would not be able to cover it so it seems like um both both a certain proportion of self-employed and the gig economy workers are credit constrained and they can't get access to money um as much as they would like to and this is more pronouns to gain for the gig economy workers a lot of big a sizable fraction of a gig economy workers would have to uh well but either can't pay for the expense or would have to sell something to to to raise the money that would be needed okay let me now turn to the uk uh so again it was it's a very very almost identical set of questions that were asked so i could we can now compare the uk situation with the italian situation and so again if you look at the distribution of hours it looks really very very very similar to the italian case the self-employed have a spike at 40 hours and they are fully distributed across the range whereas the frequency of work hours is much lower for the gig economy workers services highly supportive of an ocean but these are the same sorts of jobs that people are probably doing um in in in the different countries so you know delivery riders food all the riders and so on um working certain small sets of hours per week you see the same pattern as in italy again for the desired hours of work both for self-employed just about and the gig economy workers by a lot uh would like to be working longer hours and uh than they currently are so again this speaks to that concept of labour market slack that i was talking about um in the introduction the reasons for not working more hours amongst the self-employed well no available work is massively predominant response and the reason for not working the gig economy is no available work so again there seems to be a frustrated demand for jobs uh the reasons on the other hand there is this trade off and so there is clearly this evidence of this trade-off between flexibility and work availability um so the main reason why we're self-employed want fewer hours it's for leisure reasons so there's clearly a bunch of people who who have answered they're very satisfied with ours or perhaps we want to work fewer hours and amongst those who want to work fewer hours it's so that they could take more leisure um same for the gig economy workers as well so clearly evidence of this trade-off between flexibility and and and lack of a lack of lack of work availability uh the job satisfaction questions again share the same pattern although for some reason uh in the uk the uh everybody seems to be more satisfied happier with their job than in the italian case and this is also the case in the u.s data as well so there's probably some cultural uh differences across the countries perhaps for the shapiness but if you look at the relativities between the uh gig economy workers and the uh self-employed uh the gig economy workers seem to be a little bit less satisfied with their jobs than the uh than the than the um self-employed the main reason we've been self-employed in me in the uk is clearly flexibility and working from home uh and being the second highest response for the gig economy workers they also prefer working from home and of course and and some degree of flexibility as well um although there was a little bit more a mention of pay here as well if we asked the same question about how would you pay for an emergency expense of 500 pounds it was a remarkably consistent pattern uh in the sense it still seems to be a substantial proportion of people who are credit constrained in both these both these forms of jobs okay one feature which we collected more information which seems to be an institutional feature of the labour market increasingly in the uk is the increased incidence of uh job contracts which have no government no guaranteed hours uh or times of work so people are essentially on call uh of course this isn't a new thing if you think about people queuing up a docks in the past um then of course people would queue up for jobs on the docks and certain people will be picked out um about three percent of workers are on zero air contracts um in britain at the moment and there's a stark dichotomy here about who would who in in terms of whether it was a necessity or choice there's a large number who would rather work longer hours so this is now the desired hours of work for zero hour contract individuals you can see that uh many of them over 40 percent uh would like to be working more hours so of course they are working hours but a long call and so we you know in their contract the hours is zero but they would like to be working longer they'd like to be called more often if you like for work uh what's the reason why uh they don't work more hours no available work high very very dominant for these zero contract jobs uh what's the reason for wanting fewer hours there's not that many of them but the ones who want fewer as it's mostly domestic commitments so a gamers agree even with a zero hour contract individuals there's a trade-off between flexibility and uh and increased demand for for work availability uh what's the main reason for being on a zero hour contract uh well only option and flexibility are almost um uh head-to-head on this one so that really very much illustrates the fact that but some people are happy with their jobs and some people less happy um in the u.s there's actually i mean you summarize in the us on this one one slide there's clearly evidence of ours constraints again about a third of people would want to work more hours um per week and a large proportion are work part-time for economic reasons um in in some u.s uh findings which i'm i'm showing less of here uh also consistent with this dichotomy between the flexibility on the one hand and the desire for perhaps having more regular uh forms of job characteristics that are embodied in traditional employment okay so let me turn to in terms of the issue of a policy issue um so one key thing here is we're self-employed and and those in traditional employment in all three countries um are are treated differently um by uh by government policy uh both by both for tax and benefit policy and for social insurance type reasons um so we might be interested in whether uh the self-employed individuals and the platform uh gig workers might have preferences for social protection were they made available to them so we've sort of asked them to rank um different forms of insurance uh from the ones they would like the most to what ones they would like the least so here's the rankings of various benefits for uh self-employed in italy then we give them these six options and you can see the one on the right uh retirement savings uh has the highest um frequency uh of number one responses so it seems to be pensions uh that's uh that was self-employed uh would most likely likely to have uh because of course they have to make their own uh if if they do make any arrangements we have to make their own arrangements for for pension coverage unlike employer provided pensions a regular regularly available to workers in in in traditional employment if you look at the gig economy workers in in italy they they say the same thing the pension is the highest and the paid sick leave is the second is the second highest in the uk it's even more pronounced uh we've never given eight options here but it's retirement savings but clearly crops up as the highest frequency of number one uh in in terms of in terms of the rankings of what aspects of social insurance they might they might like to have so that's the um self-employed uh same for the gig economy workers uh the pensions savings for retirement is what what with the form of social insurance they would most like the us is a bit different uh and of course remember remember the two countries i've just described both have national health systems and so of course the issue about health care is much less important to people in in jobs um in the u.s that isn't true and health insurance is often implied is often provided by employers but not by and not for self-employed individuals and not for some of the gig economy workers certainly agency workers um and so on as well so health insurance massively dominates the bankings um in in the us interestingly the number two though is retirement savings again so pensions again uh crops up but it's blown away in terms of importance in the u.s by the health insurance frequencies okay so policy options and i'll just talk very quickly about this we might be interested about whether you might think about some occupations perhaps one the three options you might think about here one would be uh subsidizing occupations uh that the self-employed and gig economy workers are in and so you might think about occupational pension schemes you might want to think about redressing the balance by in the tax and benefit system between the self-employed and be employed and think about whether you want independent contractors to be classified as dependent employment or not uh it may also be it was a role for the social security um department to do this and perhaps online accounts that employers would have uh for for for self-employed uh to make pension contributions and other social insurance contributions in so a means of organizing perhaps individual accounts savings accounts uh whether they should be mandatory or not is a different question and if there were to be mandatory you would probably have to change the tax incentives uh to do that but to ensure that they could get these kind of social insurance benefits and that might well be something that would be worth thinking about um let me touch on one last thing before before i conclude so one feature of the labor markets of most advanced countries certainly over the last 10 years is that wage growth uh wage wage growth has been very very weak uh real wage growth has been very very weak uh in some in some countries like like the uk real wage growth has actually been negative um since 2008 actually the median work of a typical work of the workers halfway up or down the wage distribution has suffered um real wage losses of about eight percent um since 2008. uh in other countries real wage growth has been very very flat and in almost all advanced countries this is true unless they seem to have some special circumstance often connected to natural resources but seems to have insulated them against having very weak wage growth so a couple of examples of that would be australia where they had a mining boom driven by demand from china uh and that seems to have kept weight average wages up in australia alberta in canada until all price dropped had a had a big oil price boom uh no big oil boom in alberta which seemed to keep wages up in canada but practically everywhere else wage growth has been very weak so one natural question you might ask is is this anything to do with this rise of these alternative work arrangements so for example the total increase in employment in the u.s since 2005 has been in these forms of alternative work arrangements almost all the increasing jobs in britain since 2008 has been amongst the self-employed uh self-employed who don't have any workers so people who are going into self-employment but not as entrepreneurs who are taking on lots of workers but people who are taking on self-employment because it's the only option available to them so you might ask the question about whether uh some of these very low wages um uh low wage growth patterns are connected to the rise in alternative work arrangements so this comes back to this point about whether the relationship between wages and employment and wages and productivity uh are how they used to be and it seems like they're not it seems like the unemployment rate is not a particularly good measure of uh of of of you know if it used to be the case if the unemployment rate was higher wages would be lower it doesn't seem to be picking that up the right hand chart here shows that's not a particularly strong relationship now the left-hand chart here shows that wages wage growth has fallen behind productivity growth so that most workers are not getting a share of productivity gains but companies make if they do get productivity improvements so it might be interesting whether uh the nature of these jobs uh these new jobs could be contributing to this so i'll show you two pieces of information numbers and they both show that the sorts of gig economy jobs i've been talking about have very low wages associated with them so here's the uh here's the um median hourly wage for the gig economy jobs in italy and so you can see it's somewhere around about eight to eight to ten euros uh per hour the median that's the person that's the typical person so fifty percent of people are paid less than eight whose gig is the first job whose job is a gig economy job are paid less than eight euros per hour remember they're not covered by minimum wage flaws here as well same is true of zero hour contracts in britain and this chart shows you um over time uh the median hourly wage for all workers the top line and the median hourly wage for uh zero contract workers uh it's probably worth pointing out that the minimum wage in 2017 is seven pounds fifty uh so the typical uh zero hour contract worker is paid less than the minimum wage because they're not covered by minimum wages so there's a substantial fraction of people in these sorts of jobs who are not receiving the minimum wage in in their employment so one last thing i will talk about is one thing we've looked at following a big hike in the minimum wage in the uk labor market is whether that's had any impact on the incidence of people on zero contracts so uh when the conservative government was elected in 2015 the chance the then chancellor george osborne held in the emergency budget and he uh did something extremely unexpected uh the conservative government in the uk has traditionally been very hostile to minimum wages but he introduced totally unexpectedly a new national living wage for workers aged over 25 125 and over and it involved a big increase on the minimum compared to the previous minimum wage for those workers it was partly done because wage growth has been so weak uh in the uk laid market and it seems like one of the only policy levers available to that to do anything to that is minimum wage floors so they have an interesting minimum wage um so it went to seven pounds 20 per hour um from six pound fifty per hour um from the first of eight point 2016. so one thing we've looked at is an occupation of workers domiciliary care workers services people who drive around a care workers who drive around and visit people in their homes uh and uh and that that's their job uh and a lot of these workers on zero hour contracts um so so what seemed to happen was the domiciliary care workers did benefit from minimum wage going up their wages went up by seven and a half percent uh on the on the minimum wage hike but something else that happened was the probability of being on a zero contract went up as well so it seems that one response from employers to the minimum wage hike was actually to move people onto these more precarious forms forms of employment so the taylor review of independent contractor work that was undertaken last year raised one possibility that if people are in these more precarious jobs should there be a higher minimum wage for those workers and that's an interesting question i think from a policy perspective so this chart just shows you if people want to see the details of this the only thing that's really worth looking at here is that the so this is the wage distributions of people before and after the minimum wage so the dark distribution is the minimum wage before and then it moves sideways because everybody gets a wage increase and we move to the uh white bars afterwards so you get a huge spike at seven pounds twenty over twenty percent of domiciliary care workers uh moved up to seven pounds twenty an hour so they got a big wage boost but the proportion of zero hour contract jobs uh went up as well and it went up by nine percent uh according to this chart uh what happened to jobs elsewhere well jobs elsewhere uh were barely affected they went up by one percent so you can see clearly there's more people moving into being moved on to zero hour contracts following the minimum wage hike so another form of way in which labour market policy has interacted with the increased incidence of alternative work arrangements okay so that's what i've got to talk about so let me just conclude so it seems that these alternative work arrangements today's load markets seem to feature many more of these new forms of different working patterns to the past technology as i mentioned before has been key to uh key to introducing them you know another form of technology but related to business people may want to work from home more and of course they can do that with new forms of technology that are available um and so these there's been an increased incidence of these alternative work arrangements from an academic uh perspective and a policy perspective we don't know anywhere near enough about them uh than we would like to uh it's very striking but even in countries like italy where self-employment's been declining there's been an increased incidence of these these forms of employment um there's evidence but clearly that some of the new self-employed are loudly constrained and they'd like to work longer hours uh there's a big uh variation in the pay levels associated with these forms of employment but there is a big preponderance of low-wage jobs uh amongst these um amongst these forms of employment especially some of the gig economy workers and especially the zero-hour contract workers for people in these forms of employment there's a strong demand for social protection particularly for retirement benefits in in italy and the uk and for health insurance in the u.s so it seems like there's probably needs to be some serious attention thought to how how these work social protection is provided for these sorts of workers how labor market policies are designed for these sorts of workers who are increasingly as i sort of said at the start of the talk falling into this hazy uh middle ground with blurred lines between self-employment and employment and it seems to be need to try and design policy and redesign policy in some way to try and keep up the pace of change uh in the in the nature of work otherwise it would seem that inequality trends uh may well be uh carrying on uh technology will carry on to to increase inequality the way it has done over the last 30 or 40 years via some of these forms of alternative work arrangements okay thank you thank you thank you very much could you give us some water there's no water unfortunately it's very hot can you get us some water please thank you very much professor mason i'd like to introduce the q a time raise your questions if you want to ask questions and in the meantime i'd like to raise some questions myself first question the fragmentation in the labor market that you referred to the fishering of labour market has been certainly one of the causes of the gig economy do you think that legislation should be passed to correct that and to into what direction should be should such changes be introduced or lead to then with reference to public policies and i'm referring now more specifically to the italian case do you think it would be necessary to adopt public policies and the government had just been sworn in so we are lucky to have a new program that has introduced minimum wage or the citizenship minimum wage do you think that this can be a hurdle or a facilitator of the conditions that we've been uh identifying then more of a number general line a question on brexit do you think that brex brexit is going to impact on the labor policies in the relationship that is going to be developed in the home market or the internal market between the uk the and the eu what kind of impact do you think brexit will have on the economy for example on the sharing economy and on all the situation as you just have depicted so three different questions if there are more questions from the floor perhaps we can take them as well or if you don't have any question then we could give the flow back to professor machina so for him to take this question so there's a mic available for questions from the floor uh yeah uh my question is on the parallel between gig economy workers and self-employed well i presume that there is a big difference between the two meaning that self-employed have a personal relation with tax burdens and uh tax administration whereas probably gig economy workers uh have not the flexibility in uh in uh possible tax evasion and other phenomena so did you explore among the motivations of self-employment choices whether this kind of particular flexibility may matter interesting question you i wanted to ask you if you have information about some demographic characteristics for people working in the jig economy like if they are more younger and or female and uh if you think linking to your uh your question if you think that this is really dead that then jobs or if these people later switch to like normal types of employment thank you okay okay you have some very good questions though let me let me take each of them in turn uh so the issue about the fragmentation of workplaces and fishering and uh and so on is the scope for legislation to correct that um it's it's it's it's a very interesting one so i think the first obvious uh thing about the way in which self-employed and the employed are treated differently by tax systems is actually something that's of relevance there but i was also of relevance there and i was i spoke about about that during the talk something else was actually very relevant and the difference in different countries so one one feature of the fragmenting and fischering of the workplace has been the decline of labour market institutions notably collective bargaining uh in in many countries i mean especially in the us and the uk where there's hardly any union activity left at all um and so it does seem that something needs to be thought about but can do and that of course that's gone hand in hand with an increased uh power of employers to extract extract a larger share of rents uh and workers to get fewer rents and that's probably one of the reasons why wage growth is not as strong as it as it was as it was in the past um so there clearly is some issues to do with that there's issues that the performance of presuming forms of legislation obviously with employment protection uh but that's quite again a hazy line between them which were self-employed don't receive any of really at all it's another form of employment uh legislation that might be it might be of interest so again this blurred line about people going into the gap between themselves some of them is absolutely critical for that i think so i think it needs to be put on the policy agenda to think about how about how that could operate on the public policies of course having a minimum wage is on to start with is obviously good for those who are classified in traditional employment because it will keep their wages up uh and that seemed to be the case in in in in in lots of countries you know you saw the numbers on the economy workers so to extend but some of those gig economy workers who are low paid are beneath what the minimum wage would come in at their uh if it's binding uh that will be fine for them but of course it won't be again for the agency workers uh who are not covered by the minimum wage and they're self-employed so again that's an issue that the increased right the increases in these forms of jobs is again another issue but i think makes labour market policy even more important to be precise about who's covered and who's not covered so sort of ironically when minimum wages were introduced in the first place in in many countries the u.s has been a very good example it's true in many developing countries now there's a kind of covered sector and an uncovered sector uh so we're only when you when were u.s minimum wage was introduced in 1938 from fair labor standards act only some industries were covered and so it used to be a covered sector in a non-covered sector in many developing countries where there was a formal sector an informal sector only before more sectors covered by minimum wage legislation sort of ironically with the rise of these sorts of jobs here we're sort of moving a bit to a model where we've got a covered sector and a non-covered sector where the minimum wage is meant to be a universal wage floor for the whole labour market yet uh in in some of these countries where these these increased uh these new forms of employment are coming along we're moving a little bit back to that kind of model i think uh brexit yes um so yeah so there's obvious implications for labor market policies i mean i mean you know quite a substantial fraction of workers in in the various sectors i spoke about the economy workers and indeed the self-employed via agency work uh are migrants and so if brexit defer deters migrants from coming to the uk then of course that may well have implications if there's not enough supply of labor then presumably wages would have to go up um although when more migrants came wages didn't go down and so it's not so clear what would happen with that but clearly to the extent that migrants are doing gig and sharing economy jobs and of course it's an important thing uh unfortunately at the moment given the policy debate we can't work out quite what's going on but we maybe will be more uh maybe more light will be shed on that in due course um the question's really good about the tax evasion stuff but the trouble is this is an online survey where we're asking people to do to respond to things and we don't want people not responding to our survey by asking lots of questions about that about about potential tax evasion but i do think it's a really important thing to be put onto the research agenda that people should think about in in in in particular ways um uh on on that as well and yes i'm a final question yes we did we collect a lot of demographic information and the gig workers tend to be younger they're a lot younger in the uk actually than both for self-employed and traditional employment they span the whole education distribution that was you know especially someone self-employed the higher paid self-employed often have degrees and even higher degrees as well the gender balance is fairly mixed amongst the gig gig workers um although i think that's very different in different occupations uh so one thing we did try to get information on but our survey wasn't so brilliant on everybody responding it was actually what kind of company they were what the name of a company they're working for us so we have some uber drivers and we have some deliveries and there's not many women amongst them it's mostly men and so i think it does there is a gender mix i mean i mean one thing i would say is we haven't fully analyzed all these data so we only collected the the italian data was collected uh two weeks ago um the british data we collected in february the american data collected last year um but so we will be analyzing many more of these kind of kind of issues um in due course the critical thing about i i think the title of my talk wherever it was is exactly that uh is this independent work but offers lots of flexibility or are these new dead-end jobs uh is what we really need to know about it seems like uh many of the gig jobs don't seem to offer much career progression i mean anecdotally take the case of an uber driver so it's only a traditional form and this is back to the fisheries of a workplace in an in a traditional firm you know you'd have people who come into new jobs they'd have will be certain layers of employment that you get promote certain ranks you can get promoted and then you might become a supervisor as you as your career progresses uber drivers don't have a supervisor they have to answer to the digital analog in the mobile phone there isn't any scope for promotion to become an uber supervisor and so the idea about career progression is absolutely central i think to be to be to the rise of these jobs and looking forward uh if there isn't any career progression in these jobs then we probably need to think about how people can in canada can move up to higher wage jobs uh with career potential in future okay yeah thank you very much another question any other questions i have two questions thank you so much uh you uh talked about industrial relations and trade unions the recently in bologna in italy there was a demonstration um on part of those who delivered uh in the city are you aware of any other uh demonstrations in the uk and the u.s to look for better working conditions i mean i'm not only referring to wages but also in terms of our worked conditions our work also considering social security and health integration policies thank you good afternoon i was impressed about the italian statistics i had expected that after 2011 the number of a self-employed had increased because there were policies in favor of that what happened were there companies who went bankruptcy or what is the cause then in the uk and in the u.s is there a wage threshold i mean between freelancers self-employed and employees in italy uh the self-employed uh have this threshold at about 30 000 euro per years beyond that it's worth doing a free professional and under that it's a policy used to support young people my third question what is the relationship between italy uk and italy i mean how comes that people decide to be self-employed and freelances i think that in italy in in particular young people do that because they have no alternatives okay um so yeah so so the um yes i was told about the bill on your um riders and stuff as well and so somebody told me this morning that uh that they're trying to form a union as well which is very interesting there's been none of that kind of behavior to my knowledge in in britain um the what there has been is there's been a couple of court cases where some uber drivers have taken uber to court uh to try and be classified they said that they that because of the nature of their jobs they should be classified as employed and not the self-employed and therefore we should receive employment benefits uh they won the case uh in in in the two london uber drivers won the case uh but uber are currently appealing it uh so i don't know where that where where that will go to which but i i think that's that's quite interesting i think there's been other cases about in other places where they haven't won and so this is this is another example of just how hazy much of the uh much of the kind of form of form of legislation is um so i mean and on the work conditions and the and the hours and things and the uh social issues that's one of the reasons main reasons why we collected a lot about information to see what the desire would be were were it possible um in in the uh in the italian server i didn't i didn't speak about it here in the italian survey uh there was a little conceptual experiment that was asked about if you about whether self-employed and gig workers would like to have um sick leave sickness benefits and varying attacks that they would have to pay on that and a large proportion say they would be willing to pay to have sickness benefits but as the tax goes up it slopes down but not massively and was still even relatively high tax rates and it was an indication that they would be willing to pay for sickness benefits as well so it's be consuming about work conditions and and other uh benefits but it does seem to be the people doing these jobs would like to have them um on the on the on the the three questions that you asked me i have to confess uh that i don't know much about me my co-authors know most about the italian institutions and institutional features so i'm not going to be very good on on the first two i do think it's interesting what you say about the self-employment stuff and we should we should look into that so my two co-authors the two italian co-authors tito boary who's of course in charge of this he you speak to him about that as well and julia japone who's the other italian co-author um yes you're right i mean i mean i think i think i'm the last thing about the young people having no alternative i mean i think probably if we broke down these responses about why people are self-employed by age which we can do in our data we'll see even more of the case but uh people are doing the self-employment positions because there's no alternative we should do that and we will look into that in future research as i said in response to the question two questions ago uh we've only just got some of this data so we haven't had time to fully analyze it yet but we will definitely analyze that it's an important point thank you very much any other questions no other questions well thank you thank you so much you