COMMENTARY, Feb 10 — A gig used to be slang for the temporary engagement of peripatetic musicians to perform for a short period of time ranging from one night to even a few months at a particular venue. 

But the digital age has given rise now to the gig economy, which is a fancy or euphemistic way of describing short-term contractual or freelance work, as opposed to permanent jobs which come with benefits like medical coverage and statutory savings contributions like for the Employees Provident Fund (EPF). 

And therein lies the catch of being engaged as a gig worker, which usually pays better than permanent employment because the employer saves money from not having to pay for benefits like insurance, retrenchment payouts and retirement savings. 

The Malaysian government has recognised the fact that the gig economy is here to stay and plans to leverage on it for future growth. 

However, Prime Minister Tun Dr Mahathir Mohamad told Parliament last October that his administration acknowledges the need to safeguard workers’ rights because they did not have financial safety nets like a pension or EPF savings. 

But while the government looks at drafting new laws to protect them, the increasing number of contract workers in the gig economy — from Grab drivers to freelance and temporary online workers — will have no legal protection or protection from losing their jobs.

It is unclear exactly how many Malaysians work in the gig economy, but the rise of Grab and other such services is finally putting a spotlight on the sector.

Recent estimates show that as many as a third of the workforce in the United States are now considered to be in the gig economy. Malaysia is also heading in that direction, with the World Bank estimating that 26 per cent of our workers are now in the gig economy.

Without benefits, regular salaries and a daily routine, those in the gig economy are more like entrepreneurs than traditional employees.

This means the freedom of such gigs come at a price — workers will be taking on a bigger share of the market risks of economic ups and downs which used to traditionally be borne largely by business owners.

Take the current scare and panic over the Wuhan virus. The economic impact of the epidemic means many people could lose their jobs and be without a financial safety net and the legal protection that comes with permanent employment.

While not exactly gig work, I experienced the giddiness of being employed contractually more than a decade ago by a Singapore company without being a permanent employee.

This meant I did not make any EPF contributions. And neither did my "employer.” This, of course, meant I took home more money than others doing the same job.

This was win-win as far as I was concerned — I had more money to spend and my "employer” saved on EPF contributions.

But the truth is it would only have been beneficial to me if I had not spent all that extra money. A-back-of-the-envelope calculation shows that I actually lost out on more than RM300,000 in EPF contributions, which, now that I am older and closer in age to retirement, fills me with some regret.

The moral of the story is that few people think of boring stuff like investments and retirement savings and pensions when they are young. Of course, if you are also struggling to pay the rent it is even further from your mind.

Governments have their work cut out for them in trying to convince those who are self-employed, for that is what gig workers are, to voluntarily contribute to pension and retirement funds or even buying medical insurance.

This means that laws will have to be changed to shift the burden back to employers in the gig economy like what is being done in other countries where Uber is being classified as a traditional employer and being compelled to pay out benefits.

But any changes to existing legislation will still never completely protect all workers. It is likely to only offer some protection to those who are employed in lower paying gigs.

Those in higher-paying gigs may even shun such protection as it would likely mean it would eat into their income especially if their employers are forced to pay for benefits and safety nets.

This is because nobody ever thinks they will suddenly have their gigs or contracts cancelled, or consider the possibility they may fall sick, or when they are in their 20s, the possibility of them growing old and retiring.

Not until it happens to them, of course.