Gig Work in CEE’s Platform Economy: a series by ELMO (East Left Media Outlet)
2021 witnessed an unprecedented mobilization of online freelancers in Serbia. Thousands of people, doing various online jobs on different digital platforms and organized around a common association, marched on the streets of Belgrade to protest the government´s move to tax income from abroad. After six months of struggles, the association obtained significant concessions from the government, but many online freelancers were left with large debts and all of them are facing an extremely unfavorable tax law in the future. The protests’ moderate success, the limited mobilization, and a bitter split among freelancers raise questions about the structural processes that underline the relationship between digital workers, capital, and the state. This article sheds light on these processes at play in the Serbian protests and discusses their implications for future digital labor struggles.
The positions of online freelancers
Digital labor platforms enable digital intermediation between the supply and demand of remote jobs. They connect employers or clients with workers or freelancers around specific projects or tasks, and mediate communication, the work process, and payment. Digital labor platforms proliferated after the 2008 financial crisis, in the context of large tech investments and the flexibilization of labor. They enabled a new kind of outsourcing where employers could hire fast and cheaply millions of contingent workers across the world by taking advantage of uneven labor costs and avoiding the fees of doing business in these countries. Platform work includes everything that can be done remotely, ranging from software development and design to virtual assistance, writing, and tutoring.
Platforms also provide freelancers with the opportunity to earn higher wages on the global markets than they would locally, but facing harsh global competition. Freelancers are not employed either by the platforms through which they work, or by the clients for whom they fo the tasks. They merely pay digital rents to the platforms to participate in these markets, and they are treated differently in their countries, mostly as self-employed. This type of outsourcing results in the subjugation of freelancers to the global market with a minority of skilled professionals profiting, while the majority faces precarious work, irregular income, and lack of protections. As a community, freelancers are fragmented. They are doing different jobs, for different clients or employers, there are large inequalities between them, and they are disconnected from each other. This peculiar status raises the question: how can freelancers even organize to improve their status collectively? Recent protests in Serbia are a perfect case study for tackling this question.
The protests of Serbian freelancers
According to the Oxford online labor index, Serbia has the highest per capita number of online platform jobs among the main outsourcing destinations (Image 1). A recent estimate of the number of people working more than ten hours per week on platforms in Serbia is around 70,000, more than 2% of the national workforce. These workers are mostly young and educated and platform work brings them higher earnings and professional mobility. The digital workers community is extremely heterogenous, consisting of low-income and high-income workers, entrepreneurs, and part-time workers. Their numbers have been growing steadily over the past decade, without government interest or public discussions until recently.
In October 2020, the Serbian tax administration announced that in response to extremely high tax avoidance, it will start taxing income obtained abroad over the previous five years. The total amount to be paid for taxes, social contributions, and healthcare amounted to around 56% of the income, and together with interest rates on late payments went as high as 80% of the income obtained over the previous five years. This severe move primarily hit the freelancers, leaving them heavily indebted, disrupting their work, and threatening to end massive freelancing in Serbia. Although some were registered as entrepreneurs, the majority of freelancers were not paying taxes, primarily due to lack of adequate legal solutions. Others affected are non-platform remote workers who have foreign employers, online traders, rentiers, gamblers, and others. Thus, a significant fraction of the population was directly or indirectly hit by this measure
Soon after the announcement and after the first bills were issued, freelancers started organizing. Among several online groups, Udruženje radnika an internetu or URI (Association of internet workers) became the most prominent. URI demanded the complete cancelation of the alleged debts, settling the status of freelancers, and fair taxation in the future. The movement articulated several main arguments to support these demands. Firstly, the taxation law from 2001 was not deemed adequate for taxing digital work, which did not exist back then. Secondly, the government did not enforce this law at all and even those who wanted to pay taxes were not informed on how to do it if they tried. Thirdly, the retroactive payments included social and healthcare contributions from which freelancers had not benefited in the past, and so they should not pay for something they did not get. Finally, URI argued that most freelancers earn modest sums and would not be able to repay the debts, and that the taxes would bring Serbian platform economy to an end.
Protestors were not willing to compromise and their main slogan “all as one” meant that they wanted the cancelation of debt for everyone and that this extremely heterogeneous group would not be disjoined. The protests bore fruits with several successive offers by the government during the negotiations. During the massive January protest, the association was approached by the government, which offered to cancel interest rates, allow payment over a period of ten years, and increase non-taxable expenses. The association considered the offer unacceptable, protests continued, and further increases in the non-taxable base were offered. These were also refused and comparatively smaller protests were held on April 6.
Under immense pressure and just before the proposal entered parliament, a small number of URI members struck an agreement with government officials who initated a phone call. All debts for those earning under around 533 euros per month would be cancelled, and those who earned more were offered progressive taxation (for example, 13% for earnings over 1,000 euros and 20% over 2,000 euros). Those who pay taxes would also receive employment benefits, although this last point is still debatable as its implementation is not yet clear. The agreement is valid for previous years and the period until January 1, 2022, when the new regulations will apply.
In a public explanation of the decision to accept the government’s offer, URI emphasized that they succeeded to decrease past tax obligations for the majority of freelancers. The fact that they had not been able to cancel all debts for everyone was explained as the outcome of low attendance at protests, which left them in a weak negotiating position in front of the state. However, many of those affected did not accept the solution secured by URI. They argued that the movement did not protect everyone from what unlawful robbery. Some members and non-members distanced themselves from URI, rejected the agreement, and announced further actions. These are mostly freelancers with higher earnings in the past or who have different kinds of income that cannot be taxed the same way (e.g., from e-commerce). However, there are also freelancers with lower incomes who feel betrayed by the lack of democracy in the movement, and who are worried about the regulation of digital work after 2021. Due to the split, there are now at least four different larger associations of freelancers with diverse agendas engaged in the struggles.
Past debts are obviously a burning issue for those facing them and most of the requests and debates have been revolving around that. However, struggles for the future regulation of plantform work are equally important. The current proposal for the period after 2021 means that freelancers not registered as entrepreneurs will have to pay more than half of their earnings to the state. If freelancers do not negotiate better conditions for the future, this would prevent the majority with lower or irregular incomes from working, which ultimately means loss of jobs for the most vulnerable. Negotiating better regulations will require a strong, unified movement. This is why the splitting of the movement and its contested legitimacy could easily translate in the demise of the platform economy in Serbia, and why a better organization of freelancers is necessary.
Possibilities for digital workers’ organizing
The protests have been successful in bringing together previously isolated freelancers, getting into the spotlight of the political debates, and gaining significant concessions for the majority of freelancers. I would attribute this initial success to the movement’s swift organization, political determination, and articulation of universal demands applicable to everyone. However, URI has also been criticized by dissatisfied freelancers from within and outside of the movement for separating freelancers into categories, submitting to unreasonable taxation, and jeopardizing their future altogether. There are currently heated debates about who is responsible for the partially success of the mobilizations, who is a worker and who is not, who should pay how much in tax, and how different the status of freelancers should be to that of other workers or entrepreneurs. However, that is not the focus of this article. These antagonisms, I argue, reveal broader structural processes around the organizing of freelancers and have important implications for future struggles.
Firstly, digital workers’ possibility to associate is inherently limited. The protesting population was extremely diverse and unequal, with significant class divisions. It gathered entrepreneurs, workers, and people doing side gigs, with incomes ranging from a few hundred to several thousand euros per month. Further, all these people work on different platforms, for different employers, live all across Serbia, are extremely fragmented, and do not share much common ground. Many protesters are apolitical, fear the tax authorities, and employ various individual survival strategies to avoid payment. Thus, the protest had many ruptures to bridge. This is visible from the fact that only a few thousand people engaged in the protests, while tens of thousands are affected. Even among those who did join, the “all as one” principle could hardly apply as some merely try to survive, while others want to secure larger accumulated income. Not sharing the same material situation or political position, and having as the main common ground the aim to cancel taxes, the protesters were vulnerable to government pressure. On top of that, they did not have many allies due to their structural isolation from the local economy, political alienation, and general lack of solidarity, but also due to the perception of freelancers as high-income tax avoiders by a significant part of public.
Secondly, freelancers do not have enough disruptive power, at least not in the standard sense. On the one end, they cannot disrupt capital as they compete on an already saturated market, distant from their clients and platform, outside of the employment relationship. Importantly, this capital is completely separated from the state against which they are protesting. On the other end, they cannot disrupt the state in traditional ways either, as they cannot block essential services or critical infrastructure, like post workers, medical staff, or even taxi drivers can. However, digital workers have at least two other sources of power. The first is that Serbia, like other neighboring countries, is a labor exporting country that depends on remittance, both from labor migration and online work. This money is put in circulation and extracted through very high consumption taxes, accounts for a non-negligible part of the country’s GDP, and enables reproduction for many in the country. The second source of power is the strong public discourse around brain drain. The movement did utilize this during the protests, sending messages such as “We are staying, you an go” or “I don’t want to leave” (e.g., Image 4). Although the protests lacked support from the majority of citizens, this discourse on brain drain as the alternative to digital work has a strong political resonance among the general population. Thus, freelancers still have some leverage against the state for preservation of platform work. Their success ultimately depends on the ability to organize and bridge the above-mentioned structural ruptures.
The future of digital work in Serbia and beyond
In the same way that the 2008 crisis gave birth to digital platforms, the current pandemic and related economic crisis is exacerbating their global use. Although this period meant misery for many in Serbia, due to the sudden loss of jobs and to businesses going online, the number of workers searching for jobs on platforms increased dramatically on a global level. This is also part of the broader story of the proliferation of remote work across the world spurred by the pandemic lockdown. The genie of outsourced remote work is out of the bottle, as companies who already switched to remote work will maintain a large part of the workforce online, and also move a good part of these jobs across borders to cut costs. Thus, this pandemic will expand the global labor market for jobs that can be done online, both in terms of demand for remote work and in terms of supply of workers. This restructuration can significantly redraw global labor geographies and shift the spaces where work is done.
In this context, the protests of Serbian freelancers are much more than the fight for individual material survival. They reflect emerging global trends in employment and the specificity of the positions and struggles that both platform and non-platform remote workers could be facing. The protests reveal the conjuncture of mobile global capital, precarious labor, and peripheral states dependent on it. Fragmented, heterogeneous, and unequal workers fighting against the state tax system and not against the global tech platforms and capital paints a rather dystopian image of workers’ struggles. Although the expansion of the global remote labor market can lead to a relative equalization of workers’ incomes around the unevenly developed geographies and bring prosperity to some workers, this is ultimately the triumph of global mobile capital over labor and the state. Although Serbian freelancers fight for online work as their best alternative for the future, they are precarious, replaceable, and lack negotiating power. Peripheral states dependent on this remote outsourcing face two opposite poles of regulation: either exploiting these already exploited digital workers further through disproportionate taxation as it is attempted in Serbia; or giving up on taxes and contributions althogether in the global regulation race to the bottom, as is the case with North Macedonia. Although Serbian freelancers are rightfully fighting against the first scenario, in the long run, the other ultra-liberal scenario could prevent states from filling public budgets and providing essential services to the population, as well as erode standard employment in the country. Where different countries will be on this continuum depends on their position in the global division of labor, the political and economic positions of online freelancers in their countries, and on the success of novel digital labor struggles, such as that in Serbia. The Serbian case shows that the novel mobilizations of online freelancers can be successful, but also that freelancers need to bridge different positions and interests, and reimagine their sources of power.
This article is part of a series by ELMO (East Left Media Outlet) that explores the gig economy and platform work in various Eastern-European countries. ELMO plans to hold a panel discussion on the topic at the end of the series.
Slobodan Golušin is a PhD student of sociology and social anthropology at the Central European University in Vienna and a research associate at the Public Policy Research Center in Belgrade. His research interests revolve around the geography and political economy of online work outsourcing.
He also works ocasionally as online freelance researcher and data scientist.