AMERICAN PERISCOPE. New age labour

The US retail sector is gearing up for its seasonal hiring and it is not going to be easy. With the unemployment rate at a seven-year low of about 5.1 per cent, the labour market is tight. Retailers need temporary sales people to man the counters for the coming season in the run-up to Christmas. Those who cannot get full-time work are available for part-time work, and those looking for a second job to make something extra.

To counter the tight market, some retailers are converting more part-time to full time positions and others are throwing in other benefits — increasing the hourly rate, allowing workers to work longer, and promising more regular working schedules.

One practice that irks many part-time workers is that their schedules are subject to change on short notice, making them ‘on-demand’ workers. For a part-time worker, scheduling is important, for it is a matter of flexibility. Due to family or other job commitments, they are available only for a limited number of hours and would like to be able to plan their time.

Flexibility in choosing when to work is a major reason why so many drivers are attracted to cab-hailing services like Uber. Uber gives them the option to sign-on when they want to and sign-off when they have other things to do. Uber also uses market principles rather than contractual terms to get supply to keep pace with demand, by its practice of ‘surge pricing’. When there are not many drivers on the road, the rate goes up, drawing more to sign on to make more money for the same time spent.

Uber has built this model by treating each driver as an individual contractor. But this has made it run into problems in France, the Mecca of bureaucracy and labour rights. The French government is charging that the Uber drivers do not have professional driver licenses and therefore cannot take passengers.

Uber is facing a labour problem in the US too, where a new lawsuit is challenging its ability to treat its drivers as freelancers and not employees. The court’s decision will clarify whether the flexibility of being an on-demand service provider will also get them labour protections.

The term ‘on-demand’ reminds me of small towns in India and other parts of the developing world where groups of itinerant skilled workers would congregate near hardware stores with their tools of trade in hand (carpentry, or maybe just a shovel) waiting for itinerant contractors who would show-up on a motorcycle looking for a few people that day.

They call them ‘zero-hour contracts’ in the UK. These contracts do not guarantee a minimum amount of work or income security but make you stay available for an employer. These contracts now account for about 2.5 per cent of the UK workforce. Employers like the flexibility it allows, and some workers may have more than one such contract. Surprisingly, more large businesses seem to employ zero-hour contracts than small ones.

A recent survey conducted in the UK showed that zero-hour contract workers are more dissatisfied than regular workers. The trade-off between flexibility and stability is yet to be worked out fully.

The writer is a professor at Suffolk University, Boston and the Jindal Global Business School, Delhi NCR

COMMENT NOW