The Impact of the Gig Economy After the COVID-19 Pandemic

by Lakshi Upananda

Published on Groundviews on 18th June 2024.


The economy was devastated by the COVID-19 pandemic. Businesses fell apart and jobs were lost. At that moment of this economic downfall, a new wave swept through: the gig economy. This particular way of working, where temporary workers are linked to clients for specific projects through online platforms, became popular with Gen-Z.

Several trends fueled this. The pandemic led to a general loss of employment in almost every sector. Gen-Z who are tech-savvy, with the scarcity of traditional employment opportunities, sought online platforms to look for employment. In addition, the pandemic accelerated the wave of digitalization in the country, leading to a significant increase in internet users. This has also dramatically increased online platforms that link workers to jobs. Lockdowns and social distancing measures encouraged a shift toward remote work arrangements. Young people found the gig economy an option that perfectly fits this new normal with its flexibility appealing to young people seeking work-life balance.

The gig economy has given a new aspect of work life to this new generation. The blossoming gig economy has opened vistas for Gen-Z that are unlike anything that their forerunners could ever dream of. It provides a treasure trove of opportunities lacking in all previous employment structures. It also throws down a few gauntlets affecting their well-being and prospects.

Impact on Gen-Z

The gig economy offers flexibility and freedom. Freed from the sometimes suffocating clutches of an eight to five workday and an office environment, Gen-Z can build their own work experience. With the power to select the projects they are interested in or feel best suited for, they can follow passions, travel or gain that much coveted work-life balance that many traditional careers find hard to offer. The gig economy is well rewarding for those who can offer their skills. Some of the platforms connect them directly with clients and it may be more lucrative than any entry level salaried job. This is very appealing to a generation trying to cope with high living costs and student loans. The second advantage here is that the gig economy improves numerous skills in individuals. This generation is working on a variety of projects encompassing experiences in a wider range of skills than traditional jobs could offer. The list could go from writing and graphic design to data analysis and social media management; it is just a limitless way of setting a diverse portfolio to make them more marketable in the long run.

However, the gig economy’s bright side hides some significant challenges for Gen-Z including a lack of job security and benefits. In contrast, gig workers often work as freelance contractors, and this translates to financial uncertainty and vulnerability in the face of illness or emergencies. The other challenge is inconsistency in income. In the gig economy, work tends to be a feast or famine. There are periods when the workload is heavy and times of no work. This puts stress on working young adults and their ability to manage money to adequately plan for the future.

Sometimes, the gig economy also blurs the path to career progression. Skill development may ensue but no clear map to a long term career is offered. Without a clear structure and directions as in the traditional employment architecture, it becomes hard for a Gen-Z individual to build on a trajectory for their career path. The practice of the gig economy in Sri Lanka is unregulated. Rules in this regard are not up to the mark so individuals are left vulnerable to exploitation or unfair practices of platforms or clients.

This implies that the gig economy is a double edged sword for the Gen-Z: unlocking flexibility, income potential and skill development coupled with job insecurity, income inconsistency and a lack of clarity in the vision for career development paths. This will mean that these are the challenges Gen-Z will have to effectively navigate as the work model continues to change. Sri Lanka needs to develop regulations that protect the gig workers while building a healthy gig ecosystem that grows with the existing employment landscape.

Opportunities and challenges

The gig economy has brought drastic changes especially for Gen-Z regarding its relevance and impact on life. The gig economy, under other titles such as sharing or on-demand economy, is marked with labor markets that provide short term, flexible and often freelance work arrangements. The gig economy has provided both opportunities and challenges to the Gen-Z category of individuals.

On the other hand, the gig economy has hidden within it a broad spectrum of possibilities for Gen-Z. Among the most positively impactful features are flexibility and independence. With the growing digital platforms, Gen-Z people can now select the work they want to do and when they choose to work based on their schedules. This has particularly appealed to Gen-Z, who crave a balance between life and work. It has opened up areas in the economy that give rise to entrepreneurship and innovation through which Gen-Zers can now make money from their skills and passions.

This has primarily opened the opportunity for a market across the world. Digital platforms have connected Gen-Z in Sri Lanka, individually with clients and customers from other countries across the globe, giving them a more diverse customer base and increased earning potential. This has let them compete with their global counterparts and learn new skills and experience.

The gig economy has helped to tackle the pressing issue of youth unemployment. The pandemic worsened the situation of various kinds of unemployment issues, especially among youth. The gig economy provided an outlet from traditional forms of employment for the Gen-Z to earn a living and to work with an opportunity to gain work experience. But it’s not without its addition of challenges on the Gen-Z. The gig workers do not enjoy benefits that accrue to regular employees such as health insurance, paid leave and pension plans. Lack of such security breeds financial insecurity leading to stress.

The other consequence of the gig economy is the feeling of loneliness and being cut off, which many Gen-Z individuals have experienced. In the race for remote work, gig workers lose out on social interaction and a feeling of community, leading many to feel isolated and disconnected.

Policies and regulations should be drafted to safeguard the rights and interests of these workers in the gig economy. The government can ensure minimum wage standards, access to benefits and social protection and prevent exploitation by companies and clients.

The unregulated gig economy in Sri Lanka sustains uncertainty not only for workers but also for governments. It proves chaotic and presents uncertainty in the track, furthering challenges for governments to efficiently collect tax and remittances, which could impede their ability to develop social programs and keep the economy humming.

While Sri Lanka moves forward to address the adversities against the backdrop of COVID-19, policymakers and other stakeholders must address the well-being of gig workers with all the rights and benefits due to them. With this we will establish a more just and sustainable gig economy carrying benefits not only for Gen-Zers but also for the rest of society.


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* Ms. Lakshi Upananda is an Intern (Research)at the Institute of National Security Studies (INSS), the premier think tank on National Security established and functioning under the Ministry of Defence. The opinion expressed are her own and not necessarily reflective of the institute or the Ministry of Defence.