Welcome to the gig economy

Increasing numbers of the young are being forced to take work with no benefits or jobs well below their level of qualifications

 

Freelance, piecemeal work with no security or benefits has always been with us but since the 2013 crisis, it’s mushroomed, particularly among the young.

Better known as the gig economy, at its best it provides flexibility as employees can pick and choose the work they want to do. At its worst, it can mean a life of scrabbling around for often low-paid work with no sick pay, paid holidays or social insurance.

Add to that the numbers of young graduates returning home who may find permanent employment in low-paid jobs but way below their level of qualifications.

Meanwhile, any stab at independence is stymied by skyrocketing rents, which are often as much as a starting salary for a young person.

The result is a generation of workers who feel that they have been robbed of opportunities their parents had taken for granted.

Economist Les Manison, a former advisor for the finance ministry and central bank, says that economists define this as ‘inter-generational inequality’ or even inter-generational theft.

“In sharp contrast with their parents, a high number of Cypriot university graduates in recent years have not been able to obtain decent jobs commensurate with their education and acquired skills.  Many of these graduates either end up in lowly paid jobs characterised by underemployment, remain unemployed or are forced to emigrate,” he writes in an article for the Sunday Mail.

“There is a brain drain both in and from Cyprus robbing the country of the potential of these younger persons to contribute to economic growth and the welfare of society.”

Figures by Eurostat published last month showed that 17.4 per cent of young people in 2018 aged 20-34 in Cyprus were neither in employment nor in education or training. Youth unemployment – for all those under 25 – stands at 16.4 per cent compared to 6.5 per cent overall, while only 81.3 per cent of graduates are in registered employment.

This begs the question as to what these young people who appear to be in limbo are doing. Certainly, some of them are unemployed, but many of them are in work that isn’t contractual and therefore isn’t registered. As a consequence, they receive no benefits such as social insurance, sick leave and benefits.

Emilia Neophytou, 24, graduated from a Russell Group university in the UK with a 2:1 in political science. She now earns five euros an hour working for a small company four hours a day. Although her hours are regular, she has no contract, gets no paid holiday, social insurance or sick leave.

“My job is not so much beneath my qualifications but there is no security and not enough of it,” she told the Sunday Mail.

She knows she would get more hours and therefore more money working in a bar but she just can’t bring herself to do it.

“I didn’t go to university and stack up loads of debt just to work in a pub.”

The rise of the gig economy is, according to the dean of the school of business administration at the European University of Cyprus, George Boustras, a direct result of the conditions created after the 2008 global financial crisis.

“Firms were pressured to control employment costs, thus work by the piece or contract base work made financial sense and alleviated companies from office space and steady payroll expenses,” he told the Sunday Mail.

“We must acknowledge as well though, that freelance work provided working opportunities for more individuals who otherwise wouldn’t be able to be recruited as full-time personnel.”

Demetris Koursaros, assistant professor in economics and finance at Tepak University, points out that freelance work is used by both big and small companies.

“Big companies do this to reduce costs, small companies to find staff for specific projects,” he said.

For instance, should a small business need a web developer, they might not need to hire a full-time member of staff and pay a fixed salary every month, but instead pay per required projects.

“It’s not necessarily a bad thing,” he said. “Think of how many people hate going to the office every day.”

Freelance writer and student Antonia Georgiou agrees. “It’s great that I can work from wherever I want. The pressure though is a little high. I don’t have a fixed contract so I’m always a little on edge.

“In the long-term I know I’m missing out on a lot of benefits because I’m not getting social insurance but for the time being, I get to work and study. As I get closer to my 30s though I know it isn’t sustainable or stable.”

Asked to comment by the Sunday Mail, the labour ministry was unable to respond in time for the publication.

The extent of the gig economy is unclear as no Cyprus-specific studies have been carried out, but Koursaros says that one factor that may make freelance work more popular – particularly after the crisis – is that pre-crisis labour contracts made it very difficult to fire people, hence the rise of temporary contracts even in government services.

Boustras points out that job security is now a thing of the past and the gig economy is gaining ground.

“The concept of freelance work or work by the piece has been around for centuries. In contrast to past decades though, where the gig economy used to supplement the family income, now it has become the major source of income for hundreds of thousands of people around the globe.”

Boustras recalls also that informal work was entrenched in Cyprus long before the start of the crisis.

“It was estimated that in the years preceding the crisis, informal types of work were in the level of 30 per cent.”

A typical example is undeclared construction workers paid a daily rate, cash in hand.

But the reasons and the history of the rise of the gig economy and the lack of suitable jobs are of little comfort for those on the receiving end.

Marinos Ioannou recalled a poignant memory that he says left the strongest impression on him on how much the crisis had affected the young.

“I went to the petrol station and a young man working there was so polite and well-spoken and as we were talking, he told me he had studied physics but could not find a job in his field. His family was struggling financially and he was getting a few hundred euros per month, to help them get by,” he told the Sunday Mail.

Graduate Giannis Anastasiou still speaks about his previous employer – a large coffee chain – vehemently.

“I worked 50-hour weeks, no one gave a shit. I’d work a 14-hour shift, leave past midnight, and they still wanted me to open the shop the next morning at the crack of dawn like 6am,” he said.

“The thing is, it’s the same crap wherever you turn. We think, these are just sh*tty jobs but once we get into the real world, we’ll have more rights. It’s a load of crap. I ended up finding a job teaching languages at a place you would consider official if you saw it from the outside, yet I got the same rate per hour and still no benefits. Nobody cares about you in this country.”

Eleni, who did not wish to disclose her surname, recalls that when she got her degree in philology, friends turned to her and asked: “great, when are you going to start waiting tables?”. The sentiment is painful but not far from the truth, she says.

Although unemployment in Cyprus has fallen dramatically since the crisis, Koursaros points out that there’s a lot to be said about what kind of employment exists particularly for graduates.

“Someone graduates for instance and gets a job at McDonald’s. They’re still registered as employed. They find jobs yes but that doesn’t necessarily mean it’s relevant to their skills.”

Career advice

Eleni Markantoni, director of the office of student affairs at the European University of Cyprus, told the Sunday Mail that indeed, “some young graduates often need to embark their career in lower-level jobs.”

Though the challenges exist, Markantoni says that students “must be proactive and embark from the early stages of his/her studies in career planning”. For instance, the university’s career centre offers opportunities for internships, work shadowing, project-based learning experiences and part-time or summer jobs to help students increase their employability in the long run.

“The theory of instant gratification, where individuals expect to be on top of the game from the early stages of their career, holds true but at the same time an ever-increasing percentage of graduates now understand and practise proper career management techniques,” she said. “A crucial factor in placement decisions is selecting to work in developing industries where youth have opportunities for growth.”

She advises against graduates just taking any job after they receive their qualifications. “Multiple part-time jobs in unrelated fields, will result in youth frustration and eventually indifference and therefore must be avoided after graduation.”

 

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