Digital labor platforms are creating new job opportunities, allowing flexible work for some, but they are also changing the way it is organized leading workers to struggle with pay and social security, the head of the International Labor Organization said Tuesday.
The UN body released its flagship report, World Employment and Social Outlook 2021, analyzing the impact of digital labor platforms on enterprises, workers, and society as a whole.
“The report says digital labor platforms are creating new job opportunities, providing flexible work arrangements for certain workers, particularly women, persons with disabilities, and young people,” said ILO Director-General Guy Ryder.
He said global changes are fostering new business opportunities, especially in developing countries.
“But these platforms are also changing the very organization of work; they are increasingly redefining how economic relationships are established through technology between workers and clients or customers,” said Ryder.
The new opportunities created by digital labor platforms further blur the previously clear distinction between employees and the self-employed, according to the UN body.
“Algorithms are also defining and altering how workers are hired and remunerated and how businesses are paid or rewarded,” said Ryder.
They can result in discriminatory practices, he said.
“The practice of outsourcing is also creating major disruptions as well. In many instances, work is outsourced by businesses in the global north and then performed by workers in the global south,” said Ryder.
The COVID-19 pandemic has accelerated changes that were already underway, both in society and at work, according to the report.
“Workers on digital labor platforms often struggle to find sufficient well-paid work to earn a decent income, creating a danger of working poverty,” says the report.
Many do not have access to social protection, which is particularly concerning during a pandemic, and they are frequently unable to engage in the collective bargaining that would allow them to have these and other issues addressed.
“And we believe that these challenges need to be addressed. To assess the potential impact of digital labor platforms, we need precise and reliable estimates on how they are transforming the world of work,” said the ILO chief.
The ILO draws on the findings from surveys and interviews conducted with 12,000 workers and representatives of 85 businesses worldwide and in multiple sectors.
“The past decade has seen a five-fold increase in the number of digital labor platforms, and they are concentrated in a few countries, mainly in the United States, and to a lesser extent, in India and the United Kingdom.
“And this in itself has created a growing digital divide between different parts of the world,” said Ryder.
“This has been accentuated by the fact that 96% of all investments in these platforms are concentrated in North America, Europe, and Asia,” said Ryder.
About 70% of the revenues generated by digital labor platforms or revenues are concentrated in just two countries, the US with 49% and China with 22%.