As always, very interesting, Mark. Thank you. As you say, I can understand why juggling one or more gigs could allow giggers to manage their work-life balance better than full-time slaves; but do you think the size of the gig economy is driven by the employers or the giggers - or both? Are there tax advantages (eg, income tax, insurance, pension funds?) for giggers who structure themselves as some sort of sole-trader business and sell their labor to one or more employers? Or is it something Japan, Inc. does not want to encourage with fiscal incentives?
As always, thank you for your positive feedback and engagement on this topic. It is clear that the central government would like to encourage more full-time employment of permanent workers, or at least ensure that part-time and temporary workers receive equal pay for equal work. There are specific government initiatives to promote these practices.
While being a permanent employee in Japan is more beneficial for most in terms of financial compensation and ensuring a stable income, some people are simply not wired for this type of employment contract. They want more freedom with a job or jobs that allow them to set their own hours.
That said, gig workers in Japan are generally at a disadvantage compared to regular employees when it comes to income tax, insurance, and pension contributions. With regard to income tax, employers withhold income tax from workers' paychecks to ensure that contributions are made. Gig workers are responsible for filing their own tax returns and paying income tax on their earnings. This can be more complex and lead to potential underpayment of taxes. Similarly, employers contribute to national health and pension insurance programs for their employees. These initiatives provide health care and retirement benefits. Gig workers must enroll in the national health insurance system on their own and pay the full premium. They are also not automatically enrolled in the National Pension Scheme. Gig workers have the option to voluntarily enroll in the National Pension Insurance program, but they must pay the full premium, which can be a significant financial burden. As a result, gig workers miss out on the employer's share of insurance and pension contributions, reducing their social security benefits and retirement savings. Unstable income can, in addition, make budgeting for insurance and pension contributions a challenge.
I see; so are giggers' rates of pay higher to compensate, or is not having to pay insurance/pension contributions where the employers make their savings, meaning that giggers are actually second-class/disadvantaged workers?
The answer to your question definitely depends on the job. Some value-added freelance work can be extremely lucrative, while it may be difficult to charge a premium for more generic work that can be easily replicated.
Thank you for reading the article and for your positive feedback. Yes, at least for the time being, the financial benefits and other perks of full-time, permanent employment outweigh the freedom of freelancing for most people.
As always, very interesting, Mark. Thank you. As you say, I can understand why juggling one or more gigs could allow giggers to manage their work-life balance better than full-time slaves; but do you think the size of the gig economy is driven by the employers or the giggers - or both? Are there tax advantages (eg, income tax, insurance, pension funds?) for giggers who structure themselves as some sort of sole-trader business and sell their labor to one or more employers? Or is it something Japan, Inc. does not want to encourage with fiscal incentives?
As always, thank you for your positive feedback and engagement on this topic. It is clear that the central government would like to encourage more full-time employment of permanent workers, or at least ensure that part-time and temporary workers receive equal pay for equal work. There are specific government initiatives to promote these practices.
While being a permanent employee in Japan is more beneficial for most in terms of financial compensation and ensuring a stable income, some people are simply not wired for this type of employment contract. They want more freedom with a job or jobs that allow them to set their own hours.
That said, gig workers in Japan are generally at a disadvantage compared to regular employees when it comes to income tax, insurance, and pension contributions. With regard to income tax, employers withhold income tax from workers' paychecks to ensure that contributions are made. Gig workers are responsible for filing their own tax returns and paying income tax on their earnings. This can be more complex and lead to potential underpayment of taxes. Similarly, employers contribute to national health and pension insurance programs for their employees. These initiatives provide health care and retirement benefits. Gig workers must enroll in the national health insurance system on their own and pay the full premium. They are also not automatically enrolled in the National Pension Scheme. Gig workers have the option to voluntarily enroll in the National Pension Insurance program, but they must pay the full premium, which can be a significant financial burden. As a result, gig workers miss out on the employer's share of insurance and pension contributions, reducing their social security benefits and retirement savings. Unstable income can, in addition, make budgeting for insurance and pension contributions a challenge.
I see; so are giggers' rates of pay higher to compensate, or is not having to pay insurance/pension contributions where the employers make their savings, meaning that giggers are actually second-class/disadvantaged workers?
The answer to your question definitely depends on the job. Some value-added freelance work can be extremely lucrative, while it may be difficult to charge a premium for more generic work that can be easily replicated.
Thank you for reading the article and for your positive feedback. Yes, at least for the time being, the financial benefits and other perks of full-time, permanent employment outweigh the freedom of freelancing for most people.