Gig economy a recipe for growth? Sixth-former’s essay wins international competition

Gig economy a recipe for growth? Sixth-former’s essay wins international competition

Year 12 pupil Avi Juneja’s essay not only topped the Economics section of a university-run competition but was the overall winner out of more than 5,000 entries.

Avi took first place, with £1,000 in prize money, in the Northeastern University London essay competition for his look at the gig economy. He was presented with his prize during the university’s commemoration day celebrations.

The competition, open to students in Year 12 or the international equivalent, required entrants to pen 1,500 words answering questions set for ten fields, ranging from Computer & Data Science to History. Avi’s essay tackled the question Does the expanding gig economy contribute positively to sustainable economic growth?

Headmaster Neil Enright said: “My hearty congratulations go to Avi. The rise of the gig economy has in a short space of time introduced significant change in our society: Avi’s essay does an excellent job of exploring its effects, good and bad, and of interrogating the claims made for it by its proponents.”

Avi, who wants to apply to Cambridge to read Economics next year, said he was attracted by the essay question, as he was aware of changes in the labour market during and since the Covid-19 pandemic. He researched and wrote his essay over two days.

When news of his success came through by email, Avi was at Haberdashers’ Boys’ School playing water polo: “It was a bit surreal, and unexpected, but I was very happy. It’s nice to have my work out there for people to see. That is probably more gratifying than the prize money.”

He is looking forward to a possible career in economic journalism or policy-making, although he remains open-minded about his future. He enjoyed QE’s recent Entrepreneurship Festival, particularly enjoying the chance to hear from those who are going through the process of forming and growing a start-up.

His essay begins by outlining the exponential growth of the gig economy “with the advent of freelancing applications such as Uber”. Workers – or the “precariat” – forego stable incomes and job security and instead have flexible hours and greater independence.

Avi said he found a number of the issues interesting, such as the apparent disincentive for firms to invest in training staff where they do not see themselves as the main beneficiaries of that development. His argument was that the instability created by an expansion in the gig economy is not conducive to sustainable economic growth.

Another key point concerned the fiscal effects. Not only is the tax paid by a self-employed worker 35 per cent lower than the combined tax of a comparable conventionally employed worker and his employer, but there is also a reduction in VAT collected, since many self-employed workers do not exceed the threshold for paying VAT, whereas large corporations do.

He also pointed out the increased burdens placed on the welfare system by the gig economy, with self-employed workers far less likely to have a pension. During the pandemic, gig economy workers were left unable to work and “more likely to rely on the state for transfer payments”.

While acknowledging the merits of the gig economy – including the flexibility it gives to workers and the fact that it is accessible, providing an income to some who might otherwise be unemployed – he concluded that the “expansion in precariat work remains an unsustainable pathway to achieving growth… it has a tendency to limit productivity growth by reducing incentives to educate, worsening government balance sheets, and increasing inequality.”

Asked what he intends to do with the £1,000 prize, Avi responded with an economist’s answer, noting that he now has the capital to “save and invest”.

  • Avi’s essay may be read here.