The Gig Economy: Precarious Work and the Erosion of the Alberta Advantage

The gig economy is transforming the global labor market, and Alberta is at the forefront of this change. Characterized by short-term contracts or freelance work rather than permanent employment, the gig economy presents both opportunities and challenges for workers and the province as a whole. While it offers flexibility and autonomy, it also raises concerns about worker rights, job security, and income stability. This article explores the rise of the gig economy in Alberta, discussing its implications for workers and the potential erosion of the historical "Alberta Advantage."

The Growth of the Gig Economy in Alberta

Alberta has the highest proportion of gig workers relying on this type of work as their primary income source among Canadian provinces. Five percent of the workforce is engaged in gig employment, driven by factors such as online platforms connecting workers with gigs, the desire for flexible work arrangements, and the influx of newcomers 1. The COVID-19 pandemic accelerated this trend as individuals sought alternative income sources after job losses 4.

Interestingly, the nature of gig work in Alberta is also shifting. While it once primarily involved individuals with specialized skills, the rise of online platforms has opened up opportunities for unskilled workers, particularly in areas like delivery services 4. This shift has broadened the reach of the gig economy, encompassing a wider range of workers and skill sets.

Furthermore, the increasing number of newcomers to Alberta may be contributing to the growth of the gig economy. Newcomers often face challenges in getting their credentials recognized, potentially pushing them towards gig work as a more accessible entry point into the labor market 5. This raises concerns about the gig economy potentially exacerbating existing inequalities and hindering the integration of newcomers into the broader workforce.

Implications for Worker Rights

Gig workers often face precarious working conditions and limited legal protections. Classified as independent contractors rather than employees, they are typically excluded from benefits and protections afforded to traditional employees, such as minimum wage, overtime pay, paid leave, and employment insurance 3. This lack of legal recognition leaves gig workers vulnerable to exploitation and insecurity.

One of the central issues is the misclassification of gig workers as independent contractors 3. Many gig workers exhibit characteristics of employees, such as working under the direction of a company and adhering to specific guidelines. However, they are denied basic employment rights, creating ambiguity in their legal status and hindering their ability to access social safety nets and exercise labor rights 7.

It is important to note that while gig workers generally lack access to employment insurance, some may be eligible under specific circumstances 8. This highlights the need for clearer guidelines and regulations to ensure that gig workers are not unfairly denied benefits they may be entitled to.

Job Security and Income Stability

Gig work is often characterized by unpredictable schedules and income instability 3. Workers may experience fluctuating demand, leading to periods of high income followed by periods of low or no income 9. This lack of income security can hinder long-term financial planning, saving for retirement, and accessing credit 10.

Gig workers also face unique financial challenges, including irregular income, the absence of employer-sponsored benefits, and the complexities of managing taxes as independent contractors 9. They are responsible for covering their own expenses, such as taxes, insurance, and retirement savings, which can be a significant financial burden 6.

Moreover, many gig workers lack adequate insurance coverage. Studies indicate that a significant percentage of gig workers in Canada are uninsured or underinsured, primarily due to perceived unaffordability 11. This lack of insurance further compounds their financial vulnerability and exposes them to greater risks.

Adding to these challenges, gig workers often face unpredictable schedules and the risk of unsafe working conditions 3. They may have limited control over their work hours and may be required to work in potentially hazardous environments without adequate safety measures or support.

Health Implications of Gig Work

Emerging research suggests that gig work can have negative health implications for workers. The demanding nature of gig work, coupled with unpredictable schedules, can lead to increased stress, erratic work hours, and disrupted sleep patterns 12. Gig workers may also experience a lack of support and social interaction, which can contribute to isolation and mental health challenges.

Studies have linked gig work to an increased risk of various health issues, including cardiovascular disease and type 2 diabetes 12. The lack of access to healthcare benefits and the pressure to maintain productivity despite health concerns further exacerbate these risks.

The Erosion of the Alberta Advantage

Historically, Alberta has enjoyed a strong economy, high wages, and a good quality of life, often referred to as the "Alberta Advantage" 14. This advantage was built on several pillars, including low personal and corporate income taxes, and the absence of a provincial sales tax 14. However, economic shifts and policy changes have led to a decline in this advantage in recent years.

While Alberta once boasted the highest average wages in Canada, recent analyses indicate that wage growth has slowed down considerably, falling behind other provinces 16. This trend is partly attributed to the rise of gig work, which often offers lower wages and fewer benefits compared to traditional employment 17.

The gig economy's impact on job security and income stability may also contribute to a decline in living standards and an increase in economic inequality in Alberta 18. This is particularly concerning given that Alberta already has a high proportion of gig workers relative to other provinces, and its minimum wage remains one of the lowest in Canada 19. This combination of factors could exacerbate poverty trends and undermine the social and economic well-being of the province.

Policy Responses and Advocacy

While the Alberta government has not implemented specific policies directly targeting gig workers, some initiatives may indirectly support them. For example, the government provides resources and support for self-employed individuals, including programs like the Community Futures Entrepreneurs with Disabilities Program and Self-Employment Planning for People With a Developmental Disability 20. However, more targeted policies are needed to address the unique challenges faced by gig workers, such as ensuring access to basic employment rights and social safety nets 21.

Labor unions are playing a crucial role in advocating for the rights of gig workers in Alberta. Unions like UFCW Canada and Gig Workers United are organizing gig workers and advocating for better working conditions, fair wages, and access to benefits 22. They are also pushing for legislative changes to ensure that gig workers are protected under labor laws 8.

One notable example is the work of Jim Stanford, who outlines three paths to improving labor conditions for gig workers: testing existing laws through challenges to labor boards and courts, union organizing and collective bargaining, and legislative changes 8. These strategies offer potential avenues for strengthening worker protections and promoting fair treatment in the gig economy.

Comparison with Other Provinces and Countries

Alberta's experience with the gig economy mirrors trends observed in other provinces and countries. Some jurisdictions, like Ontario, have introduced legislation to provide gig workers with basic employment rights, such as minimum wage and access to benefits 24. However, the long-term effectiveness of these measures remains to be seen.

Internationally, various approaches to regulating the gig economy are being explored. The table below summarizes some of these approaches:

Jurisdiction

Approach to Regulation

Key Features

United Kingdom

Recognition of gig workers as "workers"

Grants certain employment rights, such as minimum wage and holiday pay

California

Stricter tests for worker classification

Requires companies to meet specific criteria to classify workers as independent contractors

European Union

Proposed directive on platform work

Aims to improve working conditions and ensure fair competition in the platform economy

These different approaches highlight the ongoing debate on how to balance the flexibility of the gig economy with the need to protect worker rights and ensure fair competition.

Expert Opinions and Predictions

Experts predict continued growth and evolution of the gig economy in Alberta 25. They emphasize the need for proactive measures to address the challenges faced by gig workers and ensure they are not left behind in the changing labor market 25. Some experts suggest that the gig economy could potentially contribute to a more inclusive labor market by providing opportunities for individuals who face barriers to traditional employment 4. However, they also caution against the potential for increased precarity and inequality if appropriate regulations and support systems are not in place 25.

One crucial concern is the challenge faced by young workers entering the gig economy directly from university 25. Without prior experience and established networks, these workers may struggle to secure consistent work and build a sustainable career in the gig economy. This raises concerns about their long-term earning potential and career development.

Synthesis and Conclusion

The rise of the gig economy in Alberta presents both opportunities and challenges. While it offers flexibility and autonomy, it also raises concerns about worker rights, job security, income stability, and the potential erosion of the Alberta Advantage.

Addressing these challenges requires a comprehensive approach that includes:

• Clarifying the legal status of gig workers: Establishing clear criteria for worker classification, drawing on examples from jurisdictions like California, which has implemented stricter tests to determine worker classification 3. This could involve adopting a multi-factor test that considers the level of control exerted by the company, the worker's integration into the company's operations, and the worker's opportunity for profit or loss.

• Ensuring access to basic employment rights: Providing gig workers with minimum wage, paid leave, and other basic protections currently enjoyed by traditional employees. This could involve amending labor laws to explicitly include gig workers or creating a separate category of "dependent contractors" with specific rights and protections.

• Strengthening social safety nets: Expanding access to employment insurance, workers' compensation, and other social programs to provide gig workers with a safety net in case of income loss or injury. This could involve creating portable benefits programs that follow workers across different gigs or allowing gig workers to contribute to existing social security programs.

• Promoting fair competition: Regulating online platforms to ensure they do not exploit workers or engage in anti-competitive practices. This could involve establishing minimum standards for pay and working conditions, promoting transparency in pricing and algorithms, and ensuring that workers have a voice in platform governance.

• Supporting labor union activity: Encouraging the organization of gig workers and supporting their efforts to bargain collectively for better working conditions and fair wages. This could involve removing barriers to unionization in the gig economy and providing resources to support union organizing efforts.

By taking proactive measures to address the challenges posed by the gig economy, Alberta can ensure that its workers are protected and that the province continues to offer a high quality of life for all.

Works cited

1. calgaryherald.com, accessed January 2, 2025, https://calgaryherald.com/business/local-business/albertas-gig-economy-newcomers-inflation-population-growth-uber-jobs#:~:text=In%20Alberta%2C%20about%20five%20per,Surveys%20in%202022%20and%202023.

2. Alberta tops list of people doing 'gig work' as main job: StatsCan - Yahoo News Canada, accessed January 2, 2025, https://ca.news.yahoo.com/alberta-tops-list-people-doing-120000105.html

3. What we heard: Developing greater labour protections for gig ..., accessed January 2, 2025, https://www.canada.ca/en/employment-social-development/corporate/portfolio/labour/programs/labour-standards/reports/gig-workers-what-we-heard.html

4. Maximizing Your Value in a Gig Economy - ALIS, accessed January 2, 2025, https://alis.alberta.ca/plan-your-career/workplace-trends/maximizing-your-value-in-a-gig-economy/

5. More Canadians than ever list gig work as primary income source - True North, accessed January 2, 2025, https://tnc.news/2024/03/10/gig-work-primary-income/

6. What is the gig economy and what's the deal for gig workers? - The World Economic Forum, accessed January 2, 2025, https://www.weforum.org/stories/2024/11/what-gig-economy-workers/

7. Full article: The current social protection discourse, gig economy within the advent of COVID-19: some emerging legal arguments - Taylor & Francis Online, accessed January 2, 2025, https://www.tandfonline.com/doi/full/10.1080/0023656X.2024.2340610

8. Three Paths to Strengthening Labour Standards for Gig Workers - Centre for Future Work, accessed January 2, 2025, https://centreforfuturework.ca/2022/01/19/three-paths-to-strengthening-labour-standards-for-gig-workers/

9. Financial Wellness in the Gig Economy: Empowering Flexibility with Stability - AFCPE, accessed January 2, 2025, https://www.afcpe.org/news-and-publications/blog/financial-wellness-in-the-gig-economy-empowering-flexibility-with-stability/

10. www.nulondon.ac.uk, accessed January 2, 2025, https://www.nulondon.ac.uk/wp-content/uploads/2024/03/Avi.Juneja.Economics-1.pdf

11. www.securiancanada.ca, accessed January 2, 2025, https://www.securiancanada.ca/content/dam/doc/sc/securian-canada-gig-report-100824.pdf

12. The Gig Economy Worker: A New Social Determinant of Health? - PMC, accessed January 2, 2025, https://pmc.ncbi.nlm.nih.gov/articles/PMC9191840/

13. A Plea for the Need to Investigate the Health Effects of Gig-Economy - PubMed Central, accessed January 2, 2025, https://pmc.ncbi.nlm.nih.gov/articles/PMC7900166/

14. Alberta Advantage - Wikipedia, accessed January 2, 2025, https://en.wikipedia.org/wiki/Alberta_Advantage

15. The End of the Alberta Tax Advantage - Fraser Institute, accessed January 2, 2025, https://www.fraserinstitute.org/sites/default/files/end-of-the-alberta-tax-advantage.pdf

16. The Slow Death of the Alberta Advantage - Parkland Institute, accessed January 2, 2025, https://www.parklandinstitute.ca/death_of_the_alberta_advantage

17. Alberta advantage slipping as living standards and wages decline: report | Globalnews.ca, accessed January 2, 2025, https://globalnews.ca/news/10505393/alberta-declining-living-standards/

18. The Alberta Advantage is melting away, accessed January 2, 2025, https://albertacentral.com/intelligence-centre/economic-news/the-alberta-advantage-is-melting-away/

19. The poverty gap is growing in Calgary | Enough for All, accessed January 2, 2025, https://enoughforall.ca/articles/the-poverty-gap-is-growing-in-calgary

20. Self-Employment - ALIS - Government of Alberta, accessed January 2, 2025, https://alis.alberta.ca/look-for-work/self-employment/

21. Alberta tops list of people doing 'gig work' as main job - Vibrant Communities Calgary, accessed January 2, 2025, https://enoughforall.ca/articles/alberta-tops-list-of-people-doing-gig-work-as-main-job

22. The Union for Gig Workers | UFCW Canada - Canada's Private Sector Union, accessed January 2, 2025, https://www.ufcw.ca/index.php?option=com_content&view=article&id=33622&Itemid=2609&lang=en

23. Take Action - THE GIG IS UP, accessed January 2, 2025, https://thegigisup.ca/takeaction/

24. The Gig Economy - Alberta Views, accessed January 2, 2025, https://albertaviews.ca/the-gig-economy/

25. How to succeed in the gig economy | Summit - Mount Royal University, accessed January 2, 2025, https://www.mtroyal.ca/Summit/gig-economy.htm