Migration and the platform economy

Much is being said and written about the so-called ‘platform economy’, with many reports and studies highlighting that the majority of jobs will be freelance and platform-based within a few years. But what does this mean for the labour market, and what will be the implications for migrant workers from Central and Eastern Europe in particular?

The term covers the increasing number of platforms which bring people together to provide services as well as sell and share goods. Such platforms are typically online matchmakers or technology frameworks which link supply and demand. These platforms do not own the means of production, but they create the means of connection.

For example, consumers wanting food delivered to their home or office can be connected with restaurants and delivery drivers over an app. Similarly, people wanting their grass cut, their dog walked or a car to drive them into town can be connected with people who are willing to supply these services over a platform. In turn, these platforms like Upwork, Uber, Yandex Taxi, Aliexpress, Foodpanda and Wolt take a fee or a share of money earned in the transaction.

The rise of the platform economy has led to the increase in one-off jobs, or “gigs”, which offer little social security protection or rights for the worker. There is a direct link between the rise of the platform economy and traditional employment becoming more difficult for migrants to enter in destination countries. This results in Polish plumbers and handymen making money through apps in Western Europe to Uzbeks driving cars for ride-hailing platforms in Russia.

At worst, the platform economy could push migrants further out to the fringes of economies and societies. Stripped of labour rights and social protection – while unable to gain more skills, and locked out of social capital – they would make the ideal scapegoat for social tensions around growing inequalities in society.

At best, the platform economy could help migrants struggling to find a way into the highly regulated world of traditional employment in Europe. These migrants could download an app, sign up, answer a few qualification questions and start accepting jobs almost immediately. It could also allow them to enjoy flexibility, autonomy and connect with a transnational client base – provided that they have the necessary digital and entrepreneurial skills. This would also mean that they start earning money and do not need state benefits and allowances.

It should be underlined that the Covid-19 pandemic has created labour market instability and unemployment while increasing the need for flexibility, which employers and employees are demanding. As a result, the importance of the platform economy in providing opportunities for low-skilled and high-skilled workers has increased. This should be harnessed as part of the solution, rather than part of the problem.

Despite this reality, there is a populist wave across Europe stating that all immigration should be reduced or stopped completely. While this would be limiting for countries on economic, social and political grounds, it is a view that is growing in popularity in many quarters. Some feel that since there are huge numbers of high-skilled and low-skilled workers looking for jobs, then locals should be prioritised. An integral part of economic growth in the good times, migrants are now seen as an inconvenient problem for many destination and transit countries.

The coronavirus crisis has also made it very easy for countries to close borders and this trend could be extended well beyond the life of this current pandemic. It could also see politicians and companies focusing on employing nationals while also investing more in machines and automation to carry out low-skilled jobs over the medium term.

This closing of borders and “nationals first” policies will naturally affect people and businesses from Central and Eastern Europe. Despite the current crisis there is still a need for engineers, computer programmers, farm workers, health care professionals and delivery drivers in Europe. Preventing migration would harm businesses and the economy as a whole. Furthermore, shutting legal migration channels would encourage more irregular migration and could even play into the hands of people smugglers and human traffickers who exploit people in desperate situations.

Moreover, there are serious implications for the EU Single Market. With borders being closed to goods and people, the four freedoms on which the modern European Union is built are under threat. Milton Friedman once said that there is nothing so permanent as a temporary government programme: for the sake of us all, we should hope that this is not the case when it comes to the current limitations being placed on the European Single Market.

Unlike many news and information platforms, Emerging Europe is free to read, and always will be. There is no paywall here. We are independent, not affiliated with nor representing any political party or business organisation. We want the very best for emerging Europe, nothing more, nothing less. Your support will help us continue to spread the word about this amazing region.

You can contribute here. Thank you.

emerging europe support independent journalism