McKinsey proves that the gig-economy is a matter of choice
A few days ago, McKinsey publish a landmark report. You probably missed it. Most people did. It’s called: ‘Independent work: Choice, necessity, and the gig economy’.
But it may well go down in history because it’s the first time anyone has really studied 21st Century freelance workers in what we’ve come to call the ‘gig-economy’, and it’s devastating.
The prevailing assumption in the UK, and within the government, is that people who work in the gig-economy are desperate. They are freelance because they can’t get a ‘real’ job. They are poor, exploited and generally miserable with their lot. In an ideal world, these workers would all have ‘proper’ nine-to-five employment with contracts and gold clocks or beers down the pub on their retirement 30 years hence.
But this report calls out this assumption and shows us that it is utterly false.
People are freelance out of choice
Seventy-four per cent of people in the UK who work in the gig-economy do so out of choice. And before you ask, only one quarter are under the age of 25. All these people chose to be freelance rather than being tied to ‘the man’.
No one is forcing people to be freelance. And they’re not doing it because their personal, educational, family or financial circumstances mean they have to. They do it because they want to. It gives them freedom, and they’re not beholden to one employer of all their income. This echoes other studies showing that roughly 60 to 80 per cent of people who freelance do so by choice.
Independent workers love the gig economy
These choice-based independent workers have much higher satisfaction levels than traditional employees. They are more engaged in their work; they relish the chance to be their own boss, have more control over their hours, and over their lives. These satisfaction levels are the same regardless of gender, age, education level, or household income.
Independent workers cite higher satisfaction than traditional employees almost right across the board. They score higher on the creativity they can express at work, to opportunities for learning and recognition. They are happier with their overall level of income and are just as satisfied as traditional workers on income security and benefits. They enjoy their work and value their independence.
Independent workers are not all poor or all blue-collar jobs
Although 40 to 55 per cent of low-income households engage in independent work, they make up less than 25 percent of all independent earners in all countries surveyed except Spain.
And while independent work is prevalent in the construction trades, household and personal services, and transport, it is also preferred by professionals such as doctors, therapists, lawyers, accountants, interior designers, and writers.
But when we’re talking about professionals, unconscious snobbery rears its ugly head. What is the difference between being an independent worker in the gig economy and having a ‘portfolio career’? Nothing.
Technology is powering the gig economy
Despite the headlines, it is not the usual suspects that are powering this move to independent working. Digital ‘on-demand’ or ‘sharing economy’ platforms such as Uber, Lyft, TaskRabbit and Airbnb etc., actually facilitate only a small fraction of independent work today.
However 15 per cent of independent workers have used a digital platform to earn income. People who sell goods are most likely to do so, often by listing on e-commerce marketplaces such as eBay and Etsy. But the direction is clear: as we see more platforms, we’re going to see more people joining the gig economy for good, because they want to, they really do.
The gig economy will grow, possibly rapidly
The report points to big growth in the gig economy. Approximately 14 per cent of those in traditional jobs and people who are not currently working reported that they would like to become independent workers and said that they are “somewhat likely” or “very likely” to pursue this aspiration.
Couple this with growing demand for a more flexible workforce from both consumers who value independent household workers and businesses who are keen to bring on project workers, and you have a workforce that is set to change rapidly over the next 20 years. Wake up to the gig economy before it’s too late, or if you can’t bear it, get yourself a ‘portfolio career’ instead!