Excerpted from Veronica Sheen (Australia):

“The online agencies extend what is already on offer by contracting and labour-hire companies, as well as self-employed contractors such as office temps, cleaners, IT specialists, gardeners, labourers, or tradespeople. But in the new model the middle-man (the contracting company) is eliminated – notwithstanding the cut that the online agency takes for itself out of the payment to the worker.

The type of work offered by online employment agencies extends the “casualisation” of the workforce accounting now for around 20 per cent of Australian employees. This casualisation is increasingly part of ongoing employment arrangements for many businesses. The “helper” employed through an online agency is in effect another “casualised” worker.

But unlike other types of contracted and casual employment, these employment relationships fall outside any labour regulatory framework as provided through the Fair Work Act. This means they do not conform to minimum wage or health and safety requirements or provide for any other entitlements. While this is not dissimilar to the situation of any self-employed contractor, its desirability depends on whether the workers have a real choice in regards to this kind of employment and are able to negotiate satisfactory pay and conditions.

On the Airtasker website, a job to clean an apartment involving a couple of hours work offers $US40. Airtasker charges 15 per cent commission for the job so the total payment the worker received – $US34. At the time of my perusing, on the Ozlance website someone is looking for a web developer which has attracted 27 quotes ranging from $250 to $2000.

These bidding arrangements for jobs may encourage undercutting of wages across the board. While the agencies themselves insist that quality – as monitored through an online review process – is also an important component of the bidding and pricing process, it is hard to see that this will outweigh price for most contracts, especially where quality factors are similar. Much online work can also be outsourced to low-wage countries as we can see on the Freelancer Australian website, where people are offering their services for as low as $US6 and $US7 per hour.

Sidekicker runs a different model with a set minimum fee of $29 per hour but deducts 20 per cent for itself so the worker will end with $23 per hour – maybe not so bad depending on what the job involves.

The online employment agencies promote the freedom and opportunity of freelancing work, but I wonder how many people find this type of work greatly congenial and rewarding over the long term. One IT commentator suggests the returns to workers are low and that many people signed up for Airtasker get very little, if any, work at all.

The type of employment arrangement from the online agencies recalls some of the disturbing employment trends in the United States as portrayed in a Foreign Correspondent program and in other articles. The essence of these stories is that the post-GFC recovery in employment in the USA is quite weak with many people forced into part-time, low-wage and casual employment because there are so few decent jobs being generated. Nobel laureate Joseph Stiglitz believes this trend is consolidating inequality and also holding back the recovery.

In the Foreign Correspondent documentary, a young woman is employed in a bar with a nominal wage of $US2.13 per hour and relies on gratuities to make a living. What kind of employment arrangement is this? In fact, it is an employment relationship that the online agencies also propagate.

The individual worker comes into the “labour” market unfettered by any requirements, regulations or rights in relation to wages and conditions – simply what she can obtain on the day for her labour in a marketplace much as a farmer would auction a sheep or a box of oranges.

Should we be worried about this trend in online employment agencies then? It depends. In an economy and labour market with plentiful opportunity for decent work, it is really of no account and may suit some workers and some employers. But where opportunity for decent work is eroded as reports from the United States suggest, then the proliferation of unregulated employment arrangements is concerning in that it exacerbates inequality and dampens economic growth as Stiglitz argues.”