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Working Conditions Are Worsening in the Digital Economy 

TL;DR

  • A recent report reveals tough times for digital economy workers due to low pay and bad conditions, with AI making things even harder.
  • Companies are feeling financial stress, passing it down to workers, but some are working with Fairwork to make things better.
  • Without new rules, more firms may cut worker benefits, but there’s hope as some show that fair work and profit can coexist.

A recent report from Fairwork, based on five years of global platform economy research, reveals troubling trends in the world of digital work. The report underscores the challenges and opportunities faced by workers in the digital economy, highlighting the impact of financial pressures on companies, declining pay and working conditions, and the increasing role of artificial intelligence (AI) in this sector. In 2023, as economic uncertainties loomed, workers faced unprecedented challenges, leaving them vulnerable to the decisions of companies.

Financial pressures impacting workers

The report reveals that 2023 witnessed increased financial pressures on companies operating in the digital economy. These pressures often translated into adverse consequences for workers, including declining pay, deteriorating working conditions, and subpar management standards. As a result, many workers found themselves struggling to make ends meet, exacerbated by the ongoing cost-of-living crisis. Factors such as reduced demand for services, higher work-related costs (e.g., fuel), and heightened competition for jobs further eroded the already low earnings of platform workers.

Global evaluation of working conditions

The Fairwork project conducted a comprehensive evaluation of working conditions, assessing over 270 companies across 38 countries. Regardless of location, the evidence pointed to a common theme: workers were often compelled to work long hours, frequently under precarious and risky conditions, just to make a living. While many countries made efforts to regulate the digital economy in 2023, most of these initiatives have yet to be fully implemented, leaving workers exposed to the whims of companies.

Companies collaborate for positive changes

Despite the absence of comprehensive regulation, 2023 marked a turning point as more companies than ever collaborated with Fairwork to improve working conditions. Across the globe, companies such as Glovo, Getir, Little Ride, and iFood made a total of 131 positive changes, including the implementation of minimum wage policies, provision of insurance, and enhancements to contract terms. However, even with these commendable improvements, most companies evaluated by Fairwork still fell short of meeting all criteria for decent work, particularly in terms of fair pay and collective representation.

AI’s increasing role in the platform economy

One significant development in the platform economy in recent years has been the rising use of artificial intelligence (AI) systems. According to a Fairwork survey, platform workers engaged in data labeling and processing to train AI systems earned an average of just $2 USD per hour. These workers also grappled with challenges related to late payment, limited job access, and strenuous working conditions.

The urgent need for regulation

The current economic and geopolitical uncertainty has put platform companies to the test. Without adequate regulation, many companies may continue to cut workers’ benefits and pay in pursuit of profit. However, the report highlights that some companies have demonstrated the feasibility of providing decent working conditions while remaining economically viable. This underscores that fair work is not just a desirable but an achievable outcome.

Impact of worker organizing efforts

The report also acknowledges the organizing efforts of workers in the platform economy and the AI industry over recent years. These efforts have led to a notable shift in perspective among consumers and regulators, who now demand real changes from companies and reward those that implement more ethical labor practices.

The Fairwork report serves as a stark reminder of the challenges faced by workers in the digital economy, especially in light of the financial pressures and the increasing role of AI. While some companies have taken commendable steps to improve working conditions, comprehensive regulation is urgently needed to ensure minimum labor standards are met across the industry. As the world grapples with economic uncertainties, the fate of platform workers remains uncertain, highlighting the critical importance of addressing these issues promptly and effectively.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Randa Moses

Randa is a passionate blockchain consultant and researcher. Deeply engrossed with the transformative power of blockchain, she weaves data into fascinating true-to-life next generation businesses. Guided by a steadfast commitment to research and continual learning, she keeps herself updated with the latest trends and advancements in the marriage between blockchain and artificial intelligence spheres.

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