The gig workforce is the labour force that engages in freelance jobs where they do not have fixed working locations and enjoy flexible working hours. The gig economy, fuelled by digital platforms began to get attention from Malaysian when Grab car, foodpanda, Lazada etc started to offer their services in the country, then gained popularity during the implementation of MCO due to the Covid-19 pandemic, where many people experiencing job losses.

Moreover, gig economic activities have gained popularity among Gen Z, as they enjoy the flexibility in managing their time and the autonomy to choose their own working style. This level of freedom isn’t typically found in traditional 9-to-5 jobs, which often stick with established procedures.

A press release by World Bank in 2023, stated that the gig economy had accounts for up to 12% of the global labour market, which is much higher than the estimation. Moreover, gig economy is extensive, with a total of 545 online gig work platforms across the globe, connecting workers and clients in 186 countries. EMIR Research in 2020 highlighted that there are approximately 26% of Malaysia's workforce, or four million freelancers out of a total of
15.1 million workers, participate in the gig economy in Malaysia. Moreover, data provided by Department of Statistics Malaysia (DOSM) shows a sharp increase of the gig economy accounted for Malaysia GDP from 18.5% (2018) to 30% (2020).

Although gig economic activities have provided workers freedom and flexibility, there is still room for improvement in the workers’ employment benefits. Hence, the Malaysian government stated in Key Statistics of Labour Force in Malaysia, August 2020, plans to enhance social security for gig workers through the Global Online Workforce Programme (GLOW), promoting global career opportunities through digital freelancer supervision.

In the upcoming 2024 budget, Malaysian government is considering the possibility of establishing a Gig Economy Commission. This commission would have the primary responsibility of addressing problems and introducing programs to safeguard the well-being of the stakeholders in gig economy.

Moreover, the Malaysian government has pledged to build an ecosystem that promotes the growth of the gig economy under the recently published 12th Malaysia Plan (2021-2025) (12MP) in order to encourage people to fully capitalize on this potential.

Further study or gig work?

In Malaysia, gig economic activities have been burgeoning since 2010, but the surge in popularity in 2018 was attributed to the excess of fresh graduates outpacing job opportunities, thereby increasing the demand for employment. Teenagers would rather work than continue their education since gig workers may get a wage that is nearly equivalent to that of a recent graduate. This is because students who seek higher education are in debt with an education loan and are required to repay the education loan (PTPTN) once they have completed their studies. Yet, graduates do not gain any advantage in obtaining jobs with pay as good as those who work in gig activities. Worse, graduates may face unemployment because they lack of the necessary work experience as required by the employers in their hiring criteria.

DOSM reported that the mean monthly salaries and wages for graduates aged 15 and above were RM4,489, down from RM5,020 in 2019, and graduates aged 24 and below received RM1,949, a decrease from RM2,367 in 2019. Since gig workers can guarantee solid pay, the majority of teenagers opt to start working after finishing secondary school rather than continuing their further education.

World Bank in 2023, pointed out that Malaysia, an upper middle-income nation, had an estimated income poverty rate of 3.4% in 2018/2019 and a GNI per capita of US$27,607. Poverty has increased due to the COVID-19 pandemic to 8.4% in 2020, while income inequality has marginally increased from 40.7% to 41.1%. While the economy is still recovering, food and energy prices have increased, worsening the situation for poorer households. Decrease in the living standards and the rise in the poverty rate in Malaysia have led many teenagers to engage in gig work.

While providing free higher education may be a good option to reduce the education debt. However, it can put a great burden on the government’s budget. Hence, considering the provision of subsidies to more private, non-profit-oriented higher education institutions could offer more affordable higher education options, providing students with the opportunity to complete their higher education studies.

Is higher education still relevant?

Universities serve as platforms to educate the next generation and prepare them to participate actively in society, particularly in contributing to economic activities after graduation. However, due to the rapid changes in technology, higher education degrees are no longer the sole path to earning a living, as gig economic activities can provide incomes comparable to traditional economic activities. Moreover, the argument against spending 3 to 4 years in higher education, which programs and courses offered in higher education are often perceived as unattractive because they emphasize more on theory over practical approaches suggests that it may not significantly improve job prospects. Hence, there is a need to transform the current curriculum in the Malaysian higher education system by placing greater emphasis on students’ acquisition of soft skills and encouraging their involvement in activities outside the classroom enabling students to develop problem-solving abilities, cultivate self-discipline, and manage stress effectively.

Although gig economic activities provide many advantages as discussed above, gig economy does not provide non-salary benefits to their workers such as medical leave, medical expenses coverage, or overtime compensation as well as retirement benefits. When gig economy employer needs to reduce their payroll, gig workers’ job may be at risk as they are treated as a freelancer. Gig economy worker may also be exposed to higher stress as their income isn’t consistently scheduled. There may be times when it’s challenging to secure work and potentially lower income. Bank of America reported in April 2023, there are indications of a decrease in demand for gig services as the economy reopened, could mean less gig work at delivery and social commerce marketplace platforms.

Hence, one may need to strike a balance between obtaining a higher education degree and participating in gig economic activities. Obtaining a degree should not act as a barrier for graduates to engage in gig economic activities as well. You may have the flexibility in choosing whether to engage in gig economy entrepreneurship or work in your chosen profession.

In a nutshell, gig economic activities should not be treated as part-time workers, but rather, the knowledge and soft skills obtained from higher education can be applied to the gig economy as an entrepreneurial journey that has the potential to grow into large businesses.

By Ms Kalai Vani a/p Kalimuthu and Dr Foo Chuan Chew, Faculty of Business and Finance