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Platform Economics

Crowdworkers are to benefit from social security

When it comes to platform economics, there are often questions about the social security of employees. The German Institute for Employment Research is proposing a "Digital Social Security" plan to cover them.

27 Sep. 2018
Crowdworkers are to benefit from social security (Photo: IAB)

Platforms can increase market transparency, lower transaction costs and open up new business opportunities for companies. Crowdworkers are however rarely provided with social security, although they need it just as much as traditional employees. Enzo Weber from the Institute for Employment Research ( IAB ) has now developed the concept of "Digital Social Security" coverage (DSS) for them. He suggests paying a fixed percentage of the remuneration into a DSS account belonging to the crowdworker. This would require only minimal effort from platform operators and the amounts would flow from the DSS accounts into the national social security systems, which would take care of everything else in their existing structures.

However, one may well wonder whether crowdworkers earn enough to be able to pay social security contributions in the first place. The scientist has a clear take on this: "If they do not earn enough, the solution cannot be to do without social security coverage." For reasons of acceptance, the system could start with a low contribution rate or be supplemented by public funds.

In 2017, the Federal Ministry of Labor examined the subject of platform economics and crowdworking in a brief expert report . According to the authors, it is "anything but clear" whether there is any need for regulation under social law. A key point of the discussions has to do with where to situate crowdworkers on the scale between self-employment and dependent employment.