Written by Geena Whiteman
One of the biggest problems facing the Western Balkans is the issue of youth unemployment, in which high levels of unemployment, idleness, and informality amongst young people limits prospects for increasing living standards and stimulating economic growth. Young people (age 15-24) are twice as likely to be unemployed as their adult counterparts with youth unemployment rates as high at 49.35% in Kosovo, 36.64% in Bosnia and Herzegovina, and 35.8% in North Macedonia (ILO 2020) Global trends suggest that traditional employment opportunities are becoming less secure, with less than half of those globally considered to be ‘employed’ holding salaried jobs. This declining security is represented in the growth of new employment models, such as part-time and temporary contracts, or informal and ‘gig’ forms of self-employment that predominantly affect those from disadvantaged and minority backgrounds – such as lower socioeconomic status, ethnic minority groups, disabled people, and women, as well as young people.
Since 2015, the United Nations has spearheaded a movement towards ‘Decent Work’, in which SDG 8 (Decent Work and Economic Growth) of the 17 UN Sustainable Development Goals stipulates for ‘the guarantee and provision of decent employment opportunities for all promotes global economic development and reductions in inequality. The concept of ‘decent work’ argues that opportunities for work should be ‘productive’, they should deliver a fair income, provide security in the workplace and social protection for employees and their family, whilst also providing prospects for personal development and social integration and freedom of expression within workplaces. However, informal employment and the gig economy as it stands, do not constitute what would be considered as decent work – and regulation and legislation surrounding gig economy work is only recently emerging across Europe, and still relatively underexplored and unsupported within the Western Balkans.
What is the Gig Economy?
Discussions about the gig economy refer to “a labour market characterised by the prevalence of short-term contracts or freelance work, as opposed to permanent jobs.” Whilst there are three key categories of ‘gig economy worker’: the architects and technologists of the platforms which facilitate gig economy work, the ‘cloud-based consultants’ or ‘freelancers’ who offer professional services via these platforms, such as UpWork or Fiverr (Osnowitz 2011; Christin 2018), and those whose services are engaged via platforms (such as Uber or Deliveroo) and generally performed offline (such as ride-hailing and food delivery (Rosenblat 2018; Ravenelle 2019, Schor 2020). This discussion is specifically focused on those in the second and third category, those who sell their services (whether virtual or offline) through these platforms, in return for short-term, often sporadic, gig-based opportunities that provide them with flexibility in return for tolerating the insecurity of contract-based work.
State of Gig Economy Activity for Western Balkan Youth
A study by Yucekovic & Markovic (2020) on young gig economy workers in Montenegro found that they believed that ‘freelancing’ had many advantages such as a better balance of work and private life, the possibility of choosing working hours, high earning potentials and professional advancement. According to Waldvogel (2019), the gig economy provides many freelancers in Kosovo the opportunity for flexibility in their working life, and enables them the opportunity to pursue a variety of work opportunities that align with numerous interests, rather than solely focusing on one career domain – enabling them to become a ‘jack of all trades’, rather than a master of one. This provides young people with the opportunity to try out numerous career paths and figure out which one fits them, and strengthen their professional network by working with a variety of companies and individuals from around the world. For young people in Albania, they felt there was a significant skills mismatch limiting their ability to become ‘professionals’ within their chosen field – in that the skills taught in the education system were no longer useful for the current needs of the labour market. Engagement in the gig economy allowed them to play ‘catch up’, and build a set of skills that would be useful for the labour market of today (RisiAlbania 2016).
However, for many young people engaged in the gig economy, there is very little (if any) job security, and within the Western Balkan region, there is also limited social security for those engaged in such employment. This results in many people engaging in exploitative contracts in order to make ends meet and leaves them working excessive overtime hours, being underpaid and, working when sick due to a lack of basic protections. When engaged in the gig economy and informal employment, young people are less able to easily move into formal, full-time employment, due to the time required to apply for jobs and attend interviews being tied up in various short-term gigs – and the sporadic nature of gig employment often interrupting plans at the last minute. Those engaged in the gig economy are often not afforded many rights in relation to those in formal employment, may not be aware of their employment rights stipulated in their contract, or are less able to air any grievances or issues due to fear of losing clients. In many of the Western Balkan countries, there is also a weak legislative environment when it comes to freelancing and gig work, with many young people unable to register as self-employed (for a variety of reasons, such as bureaucracy or lack of self-employed framework), meaning they take on a higher tax burden (such as the entrepreneurial tax fee in Kosovo) due to needing to register as a small business, diminishing their earning capacity (Waldvogel 2019).
Does the Gig Economy constitute Decent Work?
The gig economy provides young people with the opportunity to explore a varied avenue of interests in order to figure out the career path that they seek and to upskill and reskill in fields that they may not directly be able to learn within their regional and national educations system. It removes barriers to employment by allowing people to take on short-term contracts that they can fit around their own time, allowing many people the flexibility to fit work around studies, caring duties, and other commitments that they may have. However, the gig economy is difficult to legislate into a secure working environment, as one of the downfalls of outsourcing your employer to another country means they do not need to comply with local labour laws and can be difficult to chase down when contracts go sour, and contractors remain unpaid or exploited. It can be highly exploitative, and often leaves individuals engaged in gig economy work overworked, underpaid and highly vulnerable to economic shocks – meaning it aids in perpetuating inequality – especially with the current nature of gig economy work in which western companies outsource tasks to lower-income countries to take advantage of lower wages, often providing sub-par contracts to workers and treating these workers without dignity. Whilst the gig economy can be a force for good, it also runs the risk of undermining efforts towards equality and development – and therefore, governments and policymakers need to shift their focus towards this growing phenomenon and work towards creating an environment that both draws upon the benefits of gig economy work, whilst also protecting workers from the vulnerability that can come alongside this.
- Investing in small-to-medium-sized enterprises to provide formal employment opportunities to young people leaving the education system that enables them to build a professional career.
- Working with formal and non-formal education providers to provide relevant skills training to young people that enables them to find formal employment outside of the gig economy that fairly reflects and compensates for the level of their skills.
- Enhancing social security systems so that those engaged in the gig economy have resources to fall back on in times of necessity, especially for young people who are often left out of social security provisions.
- Strengthening the legislative environment surrounding gig economy and freelance work by enabling young people to legally register as self-employed, rather than having to register as small businesses and often pay high entrepreneurial tax rates.
Available at: https://www.helvetas.org/en/eastern-europe/about-us/follow-us/helvetas-mosaic/article/June2019/Freelancing—Leading-to-a-More-Adaptive-Workforce-in-the-Western-Balkans
[Accessed 15 03 2022].
Available at: https://data.worldbank.org/indicator/SL.UEM.1524.NE.ZS?locations=BA-XK-MK [Accessed 15 03 2022].