World Bank Warns of Digital Job Risks Amid Weak Regulation in Developing Countries

The World Bank has issued a cautionary note about the rising trend of digital jobs, highlighting both the opportunities and risks for workers in developing countries. While online platforms are opening new avenues for income, many workers remain vulnerable due to weak labor regulations and limited access to social protections.

Across the globe, hundreds of millions are now engaged in platform work, from freelance writing and software development to small online tasks. In low- and middle-income countries, these platforms connect local workers to global markets, offering opportunities previously unavailable. For example, in South Africa, a woman who struggled for years to find employment built a livelihood writing blogs for international clients, reaching audiences in the United States, India, and the United Kingdom.

The potential earnings can be significant. In Vietnam, a 30-year-old software developer leveraged his degree to freelance online, earning roughly $40,000 a year—far above local wage levels. In Mexico, Uber drivers reported making three to four times the minimum wage. Yet, these gains often come with challenges, including long working hours, unstable income, and no guaranteed benefits like health insurance or paid leave.

The World Bank emphasizes that regulating digital work is particularly difficult in developing nations, where informal employment is common and enforcement systems are limited. While some countries classify platform workers as self-employed, leaving them largely unprotected, others designate them as employees, granting labor rights but potentially increasing operational costs for platforms and limiting job creation.

To address these issues, the World Bank recommends context-specific regulations that protect workers without discouraging job opportunities. Suggested measures include algorithmic and payment transparency, safeguards against unfair disconnection, and data-driven policies that leverage the traceable nature of digital platforms. “Platform work is not just a new labor market trend; it’s a test case for dynamic, integrated regulation,” the bank noted, urging governments to seize this chance to create a safer, sustainable digital labor market.

source: punch