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Precarious perils: Entering the gig economy

Off the Board/Opinion by

It’s no secret that finding steady, full-time work as a young person in Canada is becoming more and more challenging. Gone are the days where an undergraduate degree alone could land you multiple job offers in your field of study. Now, for many students, an undergraduate degree holds as much clout as a certificate from Mavis Beacon Teaches Typing. This sentiment is backed up by some fairly disconcerting numbers: A 2017 Statistics Canada report pegged the youth unemployment rate at 10.3 per cent, roughly double the national average unemployment rate of 5.7 per cent.

If students are able to find jobs upon leaving university, there is no guarantee that this work will be relevant to their degree, or even full-time. The “gig economy”—more formally known as precarious employment—is a term used to describe a labour market where many jobs are short-term contracts or freelance work as opposed to full-time permanent employment. “The Side Hustle” has become a popular way for young people to describe what it is like entering the 21st century work scene.

The recent shift in labour standards toward more precarious employment is disproportionately affecting youth seeking work: A 2015 study by Statistics Canada found that 29.9 per cent of people age 15 to 24 had only temporary employment, as opposed to the national average of 11.3 per cent. The public and private sector alike have adopted this approach to reduce the cost and liability of hiring full-time employees. Short-term contracts allow employers to terminate employees without notice while not paying for health insurance, paid vacation, or sick days. This shift is leaving young Canadians overworked and underpaid—all in the name of profit. Companies need to take a more holistic approach when hiring young Canadians: Employees are investments in the future of any company, and they should be treated as such.

It is challenging to quantify just how many young Canadians work in the gig economy, but the metric of underemployment can be used to get a better sense of the scale of precarious employment. Underemployment occurs when a person is working in a job that either doesn’t allow them to meet their personal financial needs, or for which they are overqualified. A Canadian Labour Congress report from 2014 calculated that the youth underemployment rate is 27.7 per cent. This means that there are thousands of young Canadians who are forced to work multiple jobs for which they are overqualified just to stay afloat.

Companies need to take a more holistic approach when hiring young Canadians: Employees are investments in the future of any company, and they should be treated as such.

Short-term contracts and freelance work associated with precarious employment are taking a toll on many caught in this sector of the economy. A 2013 study by economist Wayne Lewchuk on precarious labour in Ontario found that respondents who were not employed full-time were under more stress and in poorer health than their regularly-employed counterparts. People who find themselves in precarious working situations also earn less on average than peers who have full-time work. Compounding the issue of a lower income is the variability of income from pay period to pay period in a precarious job. Large shifts in monthly income greatly hinder a person’s ability to rent an apartment, make car payments, or support themselves financially.

Although precarious employment may be attractive to employers who are looking to cut costs at the expense of their employees’ incomes, not offering full-time employment is a short-sighted approach. According to a 2015 study from the Social Market Foundation, employees who are happy with their employment situation are more productive and valuable employees. Employers need to consider the intangible value of having full-time employees with longer tenures, rather than simply looking at the upfront cost. In an interview with Steve Paikin, Angella MacEwen, Senior Economist for the Canadian Labour Congress, supported this long-term, holistic approach to employment: “When you have the mutual investment, mutual loyalty [of full-time work], that pays off for the employer in terms of lower turnover, higher productivity, and in terms of being able to plan long range.”

Ultimately, the problem of precarious employment cannot be solved solely through legislation. It requires corporations to fundamentally change how they view their employees—as long-term commitments with long-term value. The temptation will always exist for companies to cut labour costs at the expense of workers, but this practice is not just bad for the youth of Canada—it’s also bad business.

Daniel Lutes is a Web Developer at the McGill Tribune.

 

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