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The Big Read: The unstoppable march of the gig economy

The Big Read: The unstoppable march of the gig economy
Menswear label Mr Gentleman’s co-founders Jonathan Wong and Gary Ong, Millimeters Design founder Sherlynn Low (left) and Freelancer Tan Yang Er (right). Photos: Isaac Tan, Nuria Ling and Raj Nadarajan/TODAY
Published: 9:25 PM, May 19, 2017
Updated: 1:16 AM, May 22, 2017

SINGAPORE — Before stepping out of university, multi-disciplinary artist Tan Yang Er was already jetsetting across the globe.

Her travels included flying to New York with the Makansutra team to coordinate Singapore Day, and landing a gig at Paris Fashion Week where she helped with merchandising and pitching to clients as an intern for a local jewellery designer.

She had also glimpsed the workings of the advertising world at a major advertising firm, cut her teeth as a freelance makeup artist, and radically transformed spaces with elaborate set designs and installations, among other things.

Armed with these experiences, Ms Tan dived into freelance work right after university. “I needed to be excited about what I do and I knew that the easiest way to kill me was to put me behind a desk,” said the 24-year-old.

(Freelancer Tan Yang Er. Photo: Raj Nadarajan/TODAY )

Just a year in, she has already, among other things, taken on the role of art director to create a film set of a four-room flat for homegrown band The Sam Willows’ latest music video. She is also one of 50 Singaporean artists, designers, makers, craftsmen and chefs featured at the New Majestic Hotel’s Multiply: A Majestic Playground event next weekend, before the historic hotel closes its doors on June 1.

Each day poses a new challenge: Ms Tan gets new ideas during her “creative mornings”, occupies her days meeting clients or sourcing for items — such as a live chicken, for instance — and spends the evenings creating mock-ups and pitches till the “days get blurred”.

“Every day, I’ll be out running about. I’ll be looking for something, looking for places, for people, for money,” she said with a laugh.

For Millimeters Design founder Sherlynn Low, 30, freelance interior designing was something she has been doing on the side since 2009, on top of juggling a day job in the design industry, working on projects dealing with condominium and hospitality developments.

But no matter how hard she worked, she felt she could not grow further, both creatively and financially. “Every day, when I reached the office, switched on the computer, I couldn’t think of anything anymore … so that’s when I thought it was time for me to get out to do my own stuff,” she said.

Striking out on her own, Ms Low admitted that it has been hectic overseeing about five private residential interior projects a month in the past year — doing everything from accounting to drawing up designs and going shopping with clients.

“It’s been hectic but very productive (and) I get a lot of satisfaction and more freedom to express my creativity with no limits,” said Ms Low, who now takes home a five-figure sum each month and plans to set up a space where workshops on innovative design concepts or furniture construction can be held.

(Millimeters Design founder Sherlynn Low, 30, freelance interior designer. Photo: Nuria Ling/TODAY )

Ms Tan and Ms Low are among the tens of thousands of individuals who are gunning for a slice of the burgeoning “gig economy”, which, riding on technological advances, has allowed buyers and service providers — some of whom are independent workers — to connect easily.

About 167,000 individuals engaged in freelance work here as their primary job last year, according to an inaugural Ministry of Manpower (MOM) survey on this segment of the workforce. Including part-time freelancers who also hold other jobs, there are about 200,000 such workers in Singapore.

The MOM said that in the past 10 years, the proportion of “own account workers” — which includes freelance workers — has stayed within 8 per cent to 10 per cent of employed residents.

In the same period, the proportion of males between the ages of 25 and 54 participating in the labour force dipped by 1.2 percentage points. The most common reasons they cited for leaving the labour force were to pursue education or training, and to take a break.

The gig economy figured heavily in the debate on the MOM’s budget in March, with Manpower Minister Lim Swee Say announcing the set-up of a tripartite workgroup to study the concerns faced by freelancers.

While the gig economy has unravelled a vast ocean of opportunities for many, it also carries downsides, with the lack of benefits and protection posing headaches for policymakers. Arguably, nowhere are these ramifications greater than in Singapore, where the lack of Central Provident Fund (CPF) contributions — a core pillar of the Republic’s social security system — also has implications for home ownership and healthcare, for instance.

Still, many factors have worked in the gig economy’s favour. Technology has cut down “layers” between service providers, opening up room for a multitude of services, said economist Song Seng Wun from CIMB Private Banking.

Technological platforms, said labour economist Randolph Tan from the Singapore University of Social Sciences (SUSS), provide the foundation for workers seeking to market their skills as well as for employers to access workers conveniently where necessary. Indeed, technology has played a central role in the rise of the “disruptors” — from the likes of ride-hailing firms Uber and Grab to FoodPanda and Deliveroo in the food-delivery space.

Other factors cited by the economists interviewed by TODAY include the push for greater work-life balance, differing preferences of various demographic groups for arrangements that fit their schedules, as well as structural challenges such as a mismatch between skills and jobs that may nudge workers into temporary freelance work.

ENTER THE CAREER FREELANCER

Amid the rise of the gig economy, freelancing is increasingly becoming a viable long-term work arrangement for many, in contrast to the not-so-distant past where it was largely seen as a temporary solution to put food on the table and freelancers had to constantly worry about finding the next gig.

It was about a year after Mr Jonathan Wong, 24, co-founded the travelling suit label Mr Gentleman as an enterprising undergraduate that he was jolted to the realisation that he could make a “feasible” living out of it.

(Menswear label Mr Gentleman’s co-founders Jonathan Wong (left), 24, and Gary Ong, 25. Photo: Isaac Tan)

Setting up the venture in November 2013 with business partner Gary Ong, 25, Mr Wong did not harbour much ambition of turning this into a full-time job. But, by the end of 2014, things were looking up: They could each draw a monthly pay of between S$3,000 and S$4,000.

“At the end of the day, it’s about how much you earn and whether it’s sustainable,” said Mr Wong, whose firm gets between 20 and 30 orders a month now. The duo — who dub themselves “travelling suit-makers” — decided to start the service because of the difficulty snagging a custom-made suit here.

They take charge of measurements and customising fabrics, mostly going to their clients’ homes and offices, and delivering the suits when they are ready.

Mr Wong, who is in his final year of studying mechanical engineering at Nanyang Technological University (NTU), picked up the tools of the trade from scratch: “When you’re put in a spot where you want to earn money for it, then you’ve to learn… you measure and you make mistakes, and you learn from it.”

For Mr Jimmy Tan, 36, taking on freelance work became a viable prospect when he was still employed as a photographer at fashion retailer Charles & Keith about four years ago. “Every weekend, I was shooting sometimes from Thursday to Sunday. There was a lot of editing work to be done and (I felt) it was maybe time to try it,” said the freelance cinematographer.

He acknowledged, however, that there has been a general slowdown this year, and he now earns between S$3,000 and S$4,000 a month — about half the amount he made over the previous two years.

While the gig economy is not immune to the market forces, the uncertain macro-economic conditions have been conducive for it to thrive. Coupled with the tight labour market, companies have increasingly turned to hiring freelancers to supplement their permanent staff. Businesses that build themselves around the gig economy have also thrived.

Since its official launch less than two years ago, online grocery retailer honestbee has created more than 10,000 jobs for freelancers who shop for and deliver goods to its customers. These workers can, in fact, climb the ranks to become supervisors or full-time office employees, the firm told TODAY.

But to some experts, including SUSS labour economist Walter Theseira, the concern is that the gig economy may stymie workers’ desire to deepen their skills.

Dr Theseira pointed out that most freelance jobs involve tasks that call for little formal training or few skills, and by nature, have “little hierarchical structure and are fairly simple”. “All of these mean that no employer hiring for a permanent career position will take most gig-economy experiences seriously as evidence of fitness for a job that requires significant technical and management skills, or which requires substantial discipline,” he said.

Ms Selena Ling, OCBC Bank’s treasury research and strategy head, said the question was whether the gig economy would afford opportunities to highly skilled and productive professionals.

However, others begged to differ. Associate Professor Tan said many people with deep skills gravitate towards gig work because their skills are in demand and they can market these “more easily and lucratively”. “There’s significant variation in the profiles of different types of workers,” he said.

Mr Song said any economy will have “different levels of activities”, with some requiring creative-thinking and cognitive skills, while others may require other skill sets.

Mr Ang Hin Kee, who is the director of the National Trades Union Congress (NTUC’s) Freelancers and Self-Employed Unit, said freelancers were more “sensitive” to the need to stay relevant to their buyers. On this front, their main concern was the ability to pay for courses to upgrade themselves and a loss of income when they undergo courses.

To defray the costs, the Government co-funds up to 80 per cent of course fees in some cases, and workers can also tap their SkillsFuture credits, for instance, added Mr Ang.

IMPACT ON THE WIDER ECONOMY

Aided by the proliferation of technology, the gig economy eliminates “layers of businesses”, making it a great deal easier for individuals to provide services and products “at a far quicker response time”, Mr Song said.

With far more opportunities created beyond the formal economy, small and micro businesses are no longer constrained by Singapore’s geographical size, allowing them to provide their services to consumers globally — opportunities unavailable to past generations, he added.

Ms Ling said an evolving gig economy holds both advantages and risks, given the challenges of an ageing population and a growing mismatch between skills and jobs.

The gig economy, she noted, offers a “buffer” for displaced workers who can engage in short-term or temporary work while waiting for an opportunity to come along. “With more flexible work arrangements, this could ... be more suitable for the elderly workers or part-timers,” she said.

Still, Dr Theseira was concerned over whether much of Singapore’s gig economy was sustainable. He noted that most players in the gig economy are incurring substantial operating losses as they try to build their market.

Typically, this means paying freelancers, such as private-hire car drivers or personal shoppers, “above-market wages” and offering reduced prices to customers. While it was “not surprising” individuals would take on such jobs since wages for part-time and casual work could exceed what full-time employees received previously, he added: “It’s unclear whether the market can support these services in the longer run.”

While economists, Members of Parliament (MPs) and freelancers acknowledge the vast benefits the gig economy could bring, the oft-cited concerns – particularly its social implications — cannot be ignored.

Dr Theseira said the exclusion of a growing number of workers from the country’s social-protection system was “quite worrying”.

Mandatory social-protection systems like the CPF exist in the first place to “protect people from themselves”, since most find it difficult to put aside money for retirement, as present needs take precedence. “People who’ve relied heavily on self-employment throughout their working lives are likely to have more difficulty in retirement, especially if their incomes were not high,” Dr Theseira said.

For young gig-economy workers, retirement is a “very distant prospect” and they may not actually care about retirement adequacy, which is not vital to most people if they cannot make ends meet currently, he added.

Assoc Prof Tan said it was not uncommon for freelancers to ask to be paid upfront instead of channelling a sum into their CPF. “When freelance workers see it as a choice, they actually choose to forgo CPF,” he added.

Indeed, for the past two years or so, freelance hypnotherapist Lee McKing, 28, has not been contributing part of his income to CPF because he is “not making enough and just covering rent”. “I can give it a bit more time ... (but) definitely this year onwards, (the business) has to be properly up and running,” he said.

MP for West Coast GRC Foo Mee Har, who has spoken on the issue in Parliament, told TODAY that job security was cause for worry in the expanding gig economy, and it also poses a “significant social safety risk”. She acknowledged, however, that with the right set of policies, the gig economy would pave the way for much higher workforce participation.

In the worst-case scenario, Mr Song said there may be “huge social implications” if there is a pool of older, former temporary workers without CPF savings and other benefits which permanent workers take for granted. “It will be a case of who feeds, shelters and looks after them,” he added.

RE-THINKING CPF

As policymakers mull over changes to support workers in the gig economy, several suggestions have been floated by experts, MPs and those in the industry.

On social security, Mr Ang, who is an MP for Ang Mo Kio GRC and a member of the tripartite workgroup looking into issues faced by freelancers, said the aim was to find a way to help those in the gig economy get the “same kind of security”. “Can we have a new form of contribution? ... We may have to be one of the first few (in the world) to design something,” he said.

He said, however, that this must be balanced with the need to “nurture the growth of these jobs”. As with re-employment of older workers, he suggested that advisories or guidelines could be rolled out first, before coming up with legislation.

Among other suggestions, Mr Ang said some freelancers have advocated that those bidding for jobs must present an insurance certificate, such as for personal accident insurance, before they can qualify. Others proposed that when buyers pay for services, a certain percentage of the fees be channelled into an account similar to the CPF.

Mr Song said that mandatory contributions to CPF may be “the only way” to tackle the issue of retirement adequacy. “If it’s voluntary, chances are, those starting out (in the industry) don’t really care,” he said.

The level of contributions must be consistent with that of the formal sector so there is no discrimination, which will otherwise give rise to abuses, he said. “The benefit or the impact (has to be) the same, whether you choose to be a permanent or temporary worker,” he added.

Nevertheless, he noted that enforcement could be an issue, since it would be hard to keep track if the freelancer operates independently.

Dr Theseira, however, said putting in place mandatory CPF contributions for the self-employed would result in a significant drop in their take-home wage. He does not think this was possible without changing the system of payment to deduct CPF contributions at the income source — which in the case of freelancers, means the buyers of their services.

Ms Foo reiterated that if the pool of freelancers who engage in such work as their primary job builds into a significant segment, similar rules on CPF contributions should apply. Otherwise, gig-economy workers would find themselves with insufficient savings, she said, noting CPF’s close links to home ownership and the need to show a steady income when applying for bank loans, for instance. She previously also called for a marketplace to be set up, giving gig workers access to pooled medical coverage and efficient job-matching, among other things.

Dr Theseira felt companies that fuel the freelance market should bear some of the costs expected of “traditional firms” in terms of employment protection and benefits. While this would not apply to all freelance jobs, arrangements close to full-time employment, such as private-hire car driving, may have to be deemed in the same category, with the attendant benefits, he said.

Grab, for instance, already co-contributes to the Medisave accounts of drivers who clock at least 80 trips weekly and meet incentive targets.

But Mr Ang hoped such companies would “take more than baby steps”. “It’s only good for your business if the ... freelancers in your sector know that they’re looked after and they won’t be worried (and) leave the industry ... There’s inherently an incentive for you to do your part to keep your industry vibrant and moving.”

BREAD AND BUTTER CONCERNS

Beyond the Republic’s shores, measures have been taken abroad to address the wide-ranging issues brought on by the gig economy’s rise.

In Europe, freelance workers enjoy portable and transferable social rights including access to housing, transportation, health insurance and childcare.

Elsewhere, in New York City, for instance, the city council in October last year voted to pass a bill mandating those engaging freelance workers to agree, in writing, to a window and procedure to pay their dues in full. Freelancers also have recourse if they are not paid and repeat offenders could face a fine of up to US$25,000 (S$34,768).

Like in other parts of the world, the concerns of freelancers here are far and wide, from getting the word out about their services, receiving timely and complete payment, to seeking help for disputes.

On the issue of networking, Mr Ang said associations for various groups — from photographers to performers — and consortium alliances have been assembled, allowing a range of freelancers, such as beauticians, drone photographers and videographers, to pool resources and bid for jobs together.

Freelancers who run into payment disputes will be guided through the mediation process, failing which they could take their claims to the Small Claims Tribunals, said Mr Ang. Those in the industry have also suggested this could be resolved through measures such as an escrow account, which locks in and disburses payment to the freelancers once the job is completed, he added.

NTUC industry transformation and productivity director Desmond Choo said the NTUC was also working with the Info-communications Media Development Authority to develop a tripartite code for freelancers in the information and communications technology and media sectors. This will include a dispute resolution mechanism and the code will also cover areas such as what workers should look out for in a contract.

“We want to use this as a way ... to uplift standards by getting the bigger buyers on board,” said Mr Choo, who is an MP in Tampines GRC. The aim is to have such players lead by example to “set the tone for the rest of the industry”.

Meanwhile, practitioners are also organising themselves from the ground-up. For instance, the Star (Singapore Talent, Artistes and Resources) Association was formed in 2015 to offer workshops and talks to deepen the skills of events and entertainment practitioners.

It also educates members on, for instance, their legal rights and contractual knowledge and points them to the authorities and the NTUC when they encounter disputes, said Mr Laurence Wong, a co-founder. Stressing the importance of practitioners enhancing their skills in different areas, he added: “If the talents in Singapore don’t flourish, how do you expect event organisers in Singapore to hold better events?”

Freelance photographer Matthew Ng, 25, said his biggest challenge was knowing how to charge clients the right amount that determines his worth and value. “If I charge too high, I might risk not getting the job, but if I under-charge, I might get the job, but not be happy doing it because I have an inkling that my worth’s higher than that, and it’s not good for the market,” he said.

Job insecurity was also constantly on his mind, said Mr Ng, who recalled sleepless nights worrying if there were enough gigs and when the next pay was going to land, which was “mentally draining”.

In an increasingly saturated market, student and freelance magazine writer Lee Ying Ying, 22, felt some clients did not give due recognition for freelancers’ effort and skills. For instance, a publication once offered her a base rate of S$20 per article, which would be topped up progressively with S$5 for every 100 page views. Some publications would even try to convince her to write at no cost, so she could get more “exposure”.

“It’s very unfair for (freelancers) who have a few years of experience. Exposure can’t feed your family, and ultimately, if you don’t get paid at all, then what’s the point?” she asked.

Then there are clients who default on payments or simply disappear, despite the service being delivered as agreed in the contract, said Millimeters Design’s Ms Low. Taking the matter to the courts can prove too costly and involves too much paperwork, so it was “easier to let it go” and avoid such clients in future, she said.

Despite the favourable conditions and the unstoppable march of the gig economy, it is a hard slog for anyone seeking to make a success out of freelancing. Many battles have to be fought, not least against the negative stereotype of freelancers.

Despite her success, Ms Tan, the multidisciplinary artist, had to fend off perceptions that she was, like other freelancers, “a freeloader, cheap or bumming around”. “What I needed was that support system and community,” she recalled. “I needed people who have gone down the same path, to tell me it’s OK to feel everything that you feel, that you’re not lazy, to be able to say we’re just unconventional.”