CHINA´S 200M GIG WORKERS ARE A WARNING FOR THE WORLD / THE ECONOMIST

From proletariat to precariat

China’s 200m gig workers are a warning for the world

What a giant precarious workforce reveals about the future of jobs

Illustration: Chris W. Kim

The biggest workforce in the world has undergone an extraordinary transformation. 

China’s farm labourers and industrial proletariat have been joined by an army of gig workers. 

Tens of millions now use tech platforms to find jobs for fleeting periods; fully 200m, or 40% of the urban labour force, depend on some kind of flexible work. 

The fortunes of these precarious workers, many of whom struggle to buy property and gain access to public services and benefits, will shape China’s economy and society for years to come. 

As technology remakes labour markets, China’s gig workers offer lessons for countries everywhere.

Thanks in part to its early embrace of the “superapps” that organise many facets of people’s lives, China is home to the world’s most advanced gig economy. 

Today 84m people there rely on platform-based forms of employment, including ride-hailing drivers and food-delivery riders. 

As consumer apps have spread, this sort of work has become prevalent across emerging Asia, too. 

In India roughly 10m people work in the gig economy, on platforms and off. 

In Malaysia, it is 1.2m, roughly 7% of the labour force.

Lately gig work in China has spread to its vaunted manufacturing sector. 

The regimented proletariat is gradually being replaced by millions of casual workers who fill jobs “on-demand”, flitting from one factory floor to another at the direction of giant recruitment platforms. 

The jobs often require no skills beyond a knowledge of the Roman alphabet. 

The workers may stick with them for no more than a few weeks or even days. 

Researchers put their number at perhaps 40m, a third of China’s manufacturing workforce—and more than three times the size of America’s.

One reason for the rise of this gig army is that firms want flexibility. 

Employers prize the freedom to scale their business up or down, responding to seasonal demand, the vagaries of the market and the shifting winds of geopolitics. 

Technology has played a role, too. 

Smartphone apps help match customers’ orders with available delivery drivers; in manufacturing, technology has automated away many tricky tasks that used to need experience. 

Even as this has created jobs for highly skilled engineers, it has left gaps in assembly, packaging and inspection that any warm body can fill.

Flexible employment of all kinds suits many workers. 

Those who are adept at navigating the platform economy can earn more by job-hopping than they could from a single employer. 

A survey in 2022 found that the monthly income of dedicated delivery drivers in China was almost a fifth higher than that of migrant workers. 

Others, lacking their parents’ tolerance for drudgery, are unwilling to perform the same repetitive task week in, week out.

Despite these benefits, gig workers face difficulties. 

Without a steadier relationship with their employer, younger workers will never acquire the skills they need to prosper in life. 

Having left their rural hometowns, they may fail to set down roots in the cities where they work so promiscuously. 

Without proof of stable employment, they may be denied easy access to urban public services under China’s hukou system of household registration. 

And if they fail to settle, they may never marry and have children, worsening the ageing of China’s population. 

One way or another, this cohort of workers will have to provide for many elderly people as well as themselves.

Some of these difficulties, such as the hukou system, are unique to China. 

But in other ways, China’s experience is worth studying. 

Many countries, especially in developing Asia, hope to match its manufacturing success. 

None can afford to squander the potential of the young. 

A shortage of good jobs is one reason why youth in several Asian countries have risen in protest at the self-dealing of their political leaders. 

In Indonesia demonstrations in August turned violent after an armoured vehicle ran over a gig worker who gave rides on his motorbike.

One lesson from China is not to set too much store by manufacturing. 

Countries that have lost industrial might or never attained it dream that factory jobs can provide steady employment, rising wages and social stability. 

That may be true for a few engineers and technicians. 

But China shows that other roles can be displaced or de-skilled by automation.

That leads to another lesson: it would be futile to try to stamp out gig work in the hope that permanent jobs will take its place. 

The real alternative to gig work is often no work at all. 

A recent survey found that 77% of ride-hailing drivers entered the industry after losing their previous job. 

Recruitment platforms did not invent precarious employment. 

And though their algorithms can be cruel taskmasters, pushing drivers to drive recklessly fast, they are an improvement on gangmasters who used to match workers and employers. 

In many parts of Asia, including China, day labourers still huddle on the roadside early in the morning, waiting for employers to pick them from the throng.

The final lesson, therefore, is that governments should rethink the social contract to make gig work as beneficial as possible. 

China has regulated algorithms to make them a little gentler. 

It is also trying to narrow the divide between the new and the old by nudging e-commerce platforms to provide social security to gig workers. 

India is persuading platform workers to register in order to receive benefits such as accident insurance and, eventually, health care.

Stepping stones

But governments need to be more ambitious still. Instead of trying to shoehorn gig work into their existing schemes, they should redesign the policies themselves. 

China could make mandatory contributions from employers less onerous, cutting their incentive to choose gig workers over permanent ones. 

Countries should make pensions more portable, by allowing a tighter link between what people pay in and what they receive. 

Many Asian countries run the risk of getting old before they get rich. 

Helping precarious workers prosper is more pressing now than ever.