Uberization and the pension crisis

Image: Pedro Cordero


The devaluation of human work is contrary to the canons of justice and equity that underlie the logic of social security

In recent years, the transformation of the job market, driven by technological advances and the growth of digital platforms, has brought to light a phenomenon called “uberization of work”. This model, characterized by intermediation between service providers and customers through applications, promises flexibility and autonomy to workers. However, when analyzed more deeply, especially from a social perspective, it becomes more than evident that this apparent freedom is accompanied by a series of precariousness and significant problems.

Social security plays an important and necessary role in protecting workers, guaranteeing a safety net that allows them to face moments of vulnerability, such as illness, unemployment or old age. The pension system was designed to ensure that, after years of contributions, workers have the right to a dignified retirement, providing them with financial stability in old age.

In the traditional employment model, this security is guaranteed by regular contributions from both employees and employers, creating a solid basis for financing social benefits and maintaining society's security. Social security is an essential component of the welfare state, promoting equity and social justice by redistributing income and offering protection to all workers, regardless of their economic position.

In the context of the Uberization of work, this protective structure is significantly weakened. Digital platform workers, often classified as self-employed, do not have access to the same rights and benefits as formal employees. The absence of regular social security contributions by these workers compromises not only their own future security, but also the sustainability of the social security system as a whole.

Without the guarantee of a formal contract and corresponding contributions, these workers are left unprotected and face greater economic uncertainty. This work model exacerbates the vulnerability of workers, who are often subject to exhausting working hours and chronic financial instability, without the support of a social protection network.

The precariousness of working conditions resulting from uberization also directly affects tax revenue. With fewer workers regularly contributing to social security, the system's ability to provide adequate benefits is severely reduced.

This not only puts the retirement of millions of people at risk, but also the viability of other social benefits, such as unemployment insurance and sickness benefit, which are essential for the economic stability of workers in times of crisis. The reduction in tax revenue also limits the government's ability to invest in other critical areas, such as health and education, further exacerbating social inequalities.

Furthermore, the importance of social security becomes even more evident when we consider the aging of the population. As life expectancy increases, more people depend on social security benefits to maintain a decent standard of living after retirement. Uberization, by promoting more flexible and less regulated work relationships, threatens to worsen the financial imbalance in social security systems.

Without a broad and stable contribution base, the ability to meet the needs of an aging population is compromised, putting the well-being of future generations at risk. The absence of continuous and regular contributions could result in an extremely significant pension deficit, forcing the State to adopt austerity measures that could further harm workers and the economy as a whole.

The uberization process also raises questions about the dignity and appreciation of work. In many cases, digital platform workers receive pay below the minimum wage, do not have access to basic benefits and are exposed to dangerous and unhealthy working conditions.

This devaluation of human work is contrary to the canons of justice and equity that underlie the logic of social security. The lack of adequate regulation and the exploitation of workers by the platforms' logic of maximum profit create a hostile and unsustainable work environment, where basic human rights are often violated.

Therefore, social security is an essential pillar for the safety and dignity of workers, offering a safety net against economic uncertainties and life risks. The Uberization of work, by moving away from traditional models of formal employment, poses serious challenges to this structure, weakening the safety net that supports millions of workers.

Recognizing the importance of social security and facing the implications of this new working model is crucial to ensuring fair and effective social protection in an increasingly digitalized world.

*Pedro Henrique M. Aniceto is studying economics at the Federal University of Juiz de Fora (UFJF).

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