Challenges in employment through digital platforms in Latin America
International Labour Day 2021 finds the region with a new type of worker: the digital platform worker. These working arrangements represent an opportunity by allowing a more efficient use of resources and providing flexibility to both companies and workers. But they also present risks, such as greater income volatility and the possible deterioration of employment conditions, particularly access to social protection. In addition, the new digital workers are more likely to be self-employed than formally employed.
The pandemic has accelerated employment through digital platforms in the last year. However, with information from the CAF Survey (ECAF) 2019 conducted as part of the latest Economy and Development Report, 9.4% of workers in 11 of the region's major cities reported having provided a service through a platform in the last month, while 6.7% were registered as a provider on a platform, albeit with no activity. This makes a total of around 16% of the workforce that can be categorised as active or potential platform workers. The cities where this total is highest are Panama City (23%), Bogotá (20%) and Quito (19%).
As in advanced countries, platform work coexists with other traditional and non-traditional forms of employment in Latin America. In some cases, they are employed workers who earn additional income in this way, while in other cases they are freelancers or self-employed. According to the ECAF, of the total number of workers with platform activities in the last month, 60% are self-employed, 27% are wage earners, 10% are employers, while the remaining 3% are unpaid family workers, members of cooperatives and domestic workers.
The ECAF also shows that - on average for all occupational categories - platform employment constitutes a main activity in 41% of the cases, however, it is higher among the self-employed than in all other employment categories; it is also more frequent among men than among women, among the youngest and oldest than among the middle-aged, as well as among the least educated. In the context of the COVID-19 pandemic, the incidence of platform jobs is likely to be even higher than the values captured by the ECAF in 2019, especially among the self-employed.
"The recent growth of platform employment makes it necessary to rethink social protection institutions and bring them in line with the characteristics of today's labour market. Access to social benefits by platform workers presents similar challenges to those generated by traditional self-employment coverage. In this sense, technology could become an ally by facilitating the registration of activities and the payment of obligations", says Guillermo Alves, senior economist at CAF's Socioeconomic Research Directorate and co-editor of the Report.
Working conditions in this type of employment play a special role because working hours are sometimes long and unpredictable. Half of digital platform workers earn less than two dollars per hour, reveals a recent study by the International Labour Organization (ILO). Challenges to improving the quality of life of platform workers also include regularity of work and income, freedom of association and collective bargaining, among others.
Digital platforms are here to stay and add job opportunities, especially for young people; while for enterprises they allow access to a broad, flexible and multi-skilled workforce base, as well as broadening their customer base. The challenge lies in fostering a constructive dialogue between authorities, employers and workers to define regulations in line with this new reality that improve the quality of life of the population and the competitiveness of the region.
