Growing Digital Economy Offers New Opportunities – and Challenges

The latest International Labor Organization World Employment and Social Outlook 2021report finds the rapid growth of digital labor platforms is creating new job opportunities and new challenges that need to be addressed.  

The report finds digital labor platforms have increased five-fold worldwide in the last decade.  It says they mainly are concentrated in the United States and to a lesser extent in India and in Britain. 

ILO Director-General Guy Ryder says 96% of all investments in these platforms are concentrated in just three regions: North America, Europe and Asia.  This, he says, is creating a growing digital divide between the global north and the global south, which risks exacerbating inequalities. 

“And over and above that, in 2019, about 70% of the revenues generated by digital labor platforms, the revenues were concentrated in just two countries — the United States with 49% and China with 22%,”  he said. 

The ILO report is based on surveys and interviews with about 12,000 workers and representatives of 85 businesses around the world.   It finds the digital labor market is creating new job opportunities.  It provides flexible work arrangements, which it says are particularly beneficial for women, workers with disabilities and young people. 

However, there are a number of downsides to this new form of work.  For example, Ryder notes workers sometimes have to pay a commission or a fee just to access the digital labor market. 

“Workers also frequently struggle to find sufficient well-paid work to earn a decent income, and many do not have access to social protection, and this has become a particular point of concern obviously in the course of the current pandemic.  Moreover, workers are often unable to engage in collective bargaining that would allow them to have the way to address some of these issues,” he said.

The report finds working hours often can be long and unpredictable.  It says half of online platform workers earn less than $2 per hour, women earn less than men and workers in developing countries earn about 60 percent less than those doing the same job in developed countries. 

Since digital labor platforms operate across multiple jurisdictions, the ILO says international labor standards governing digital platform workers must be enacted.  

Among its recommendations, authors of the report say self-employed platform workers should have the right to bargain collectively. They say all workers, including platform workers, should have access to adequate social security benefits.

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