In a previous article I ventured a hypothesis: that new digital platforms and remote or distance work (home office, in English) could be having very profound effects on the labor market. In particular, I suggested that the arrival of companies such as Uber, Didi, Rappi or Amazon, together with remote work, could be reducing structural levels of unemployment in modern economies. Now I will try to explain a little more the logic behind this hypothesis.
In particular, there are two key questions that would need to be answered to see if it makes any sense to propose something like this: Is the impact of new platforms or remote work on the labor market large enough to affect the natural rate of unemployment? What would be the channel or direction through which the presence of new platforms or types of remote work would alter the labor market? Let’s go by parts.
The volume and impact of new companies and new types of work is no less. Only in the United States Uber claims that in 2019 it already had one million drivers working for them (or with them, to use their own language that pretends that their workers are actually their partners). This represents more than half a percentage point of the entire economically active population of the United States. If we add to this the number of drivers or workers on other similar platforms (Lyft, Cornershop, Amazon, etc.), we would see that the participation in the labor market of this type of jobs could well fluctuate between 1% and 2% of all the United States workforce. An impact of this magnitude could undoubtedly alter the natural rate of unemployment, which until recently was estimated in the United States between 4% and 5%. There are no official figures or estimates in the case of other countries, but it is enough to go out into the streets in certain urban areas of Mexico to see that the number of workers in companies such as Uber Eats, Didi or Rappi has grown very significantly there in recent years. last years.
Regarding remote work, there is a lot of disagreement about its magnitude. A recent job, based on a national survey, found that about half of all workers in the United States worked remotely at least one day a week. On the other hand, a Pew Research Center survey concludes that 35% of people in the United States who have jobs that can be done remotely work remotely full time. It should be noted that this percentage before the pandemic was only 7%.
In any case, the impact of new forms of work and new platforms is very extensive, at least in the case of the United States. Obviously, not all of these jobs are new. In fact, many of them have only replaced others (traditional taxi drivers, for example), but it is true that many new jobs have also been generated that existed in a limited way before the pandemic: food delivery or online shopping, for example. example.
Now, why could these new conditions or types of work alter the labor market? I see three fundamental reasons. First, the flexibility they offer to workers. In the case of platforms, workers can choose when and at what time to work. They also decide the total time they will dedicate to this activity: it can be full time or just a few hours a week, or it can even be a complement to another job.
Second, these jobs do not require very specific skills or training. Thus, people without previous work experience or who have left the labor market many years ago can join or rejoin a job without major complications. The same thing happens in terms of education. In general, this is not a limitation to access this type of work. Therefore, people who worked in a certain sector of the economy can quickly find an activity in another sector. This reduces so-called frictional unemployment. We saw this clearly during the pandemic when many construction workers quickly became food delivery drivers.
Third, the entry costs for these jobs are relatively low, just having a means of transportation and a smartphone or computer. A used car in the United States, for example, could be enough to become an app-based service driver. This could even explain the rapid increase in prices of these cars in recent years in the United States. In Latin American countries, getting a car, even a used one, is more complicated and expensive. But in these countries many young or unemployed people can get relatively easy access to a motorcycle or bicycle and work as food delivery people for companies such as Uber Eats or Rappi. The other major cost, that of smartphones, has fallen quite a bit as a result of technological advances.
In short, technological changes, the so-called uberization of work, remote work and changes in our mobility and consumption patterns have all come together to produce a major shift in the labor market that could have led to a reduction in the natural or structural rate of unemployment in modern economies. This has very important economic and social implications that will have to begin to be analyzed and discussed.
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