Crises are harsh moments of truth that give us an opportunity to take a pause and retrospect on where we are heading. The 2008 financial crisis had taught us wage stagnation and lower job quality fray the social fabric. Middle classes then saw a stagnating wealth while that of the top 1% distribution has enormously increased, leading to a much-skewed Gini-Index. Although certain benefits like paid leave have improved over the last decade, basic wages and work security have deteriorated furthering the Index to historic highs. A similar trend was observed during the pandemic. Billionaire founders Elon Musk, Jeff Bezos and likes added US$1Trillion to their net-worth while working classes struggled to fend for their jobs. Automation coupled with pandemic recession resulted in double-disruption of the labor market.
While the economy surely rebounds, these disruptions are to stay forever – permanently altering the job-markets. “The Future of Jobs Report 2020” by WEF underlines that the tech-integration is set to reduce the workforce in 43% of businesses and 41% plan to hire contractors instead of full-time staff. These changing social contracts are driving many workers today to opt for independent and informal ‘gig work’. The pandemic has witnessed an accelerated proliferation of such jobs. While these jobs promise liberty and contract independence, they come at a concerning cost. Informal workers often receive less government support in matters like work safety, income security, social benefits, equal representation, and fair work practices. A McKinsey Social contract report highlights that since 2000, employee pension levels dropped by an average of 11 percentage points. With increasing life expectancies, these declined savings result in vulnerable retirement years and greatly impact human capital, undermine both interpersonal and trust in established economic and political systems. This also limits our progress towards UN-SDG-8: “Decent work for all”.