The US gig economy is doing nicely with 41 million independent workers in the US. It simply implies that the professional gig economy is running well and shows some serious growth as well. According to the seventh annual ‘MBO Partners State of Independence in America 2017’ report, the gig economy is alive and well. Very alive and very well in fact. This report shows that the US gig economy is doing nicely. With the subtitle ‘Rising Confidence amid a Maturing Market’, the research conducted by the American business services company MBO Partners found that there are 41 million independent workers in the US.
Three key trends emerged in the 2017 report.
- Firstly, it says that independent workers are increasingly able to compete in the war for talent on their own terms because of a strong job market. This means that demand for skills is high and talent is in short supply. It also means that they are able to earn good money: for the sixth year in a row, the number of high-earning independent workers rose. According to the MBO Partners research, 3.2 million full time gig workers now earn more than $100,000 a year. That represents nearly one in five full time gig workers.
- The second finding was that full time independent work is appealing for most freelancers, but not all. There is a proportion (24%) that are reluctant gig economy workers. However, that figure is the lowest it has been in all seven years of the study.
- The third trend is that increasing number of people are supplementing their income through part-time or occasional independent work. There are now 12.9 million occasional gig workers, compared to 10.5 million in 2016.
Another report, this time conducted by the McKinsey Global Institute (MGI), the business and economics research arm of the global management consulting organisation McKinsey, confirms that the MBO Partners research is correct: more and more people are contributing to the gig economy. Called ‘Independent work: Choice, necessity, and the gig economy’ (http://www.mckinsey.com/global-themes/employment-and-growth/independent-work-choice-necessity-and-the-gig-economy), this report found that up to 162 million people in Europe and the US are involved in some kind of independent work. That’s between 20-30% of the working age population.
Although we all know that the gig economy is growing and growing, there is a lack of official statistical information on the market. The MGI hopes to go some way to addressing that gap in this particular report.
Through its research involving 8,000 European and US workers, the MGI found that independent workers generally fall into one of four categories. They are:
- Free agents – people who actively choose independent work and rely on it as their primary source of income
- Casual earners – people who voluntarily use independent work to supplement their income
- Reluctant – people who make their primary living from independent work but would prefer traditional employment
- The financially strapped – people who are supplementing their income with independent work because of a financial necessity
What’s the breakdown of these four categories? Most gig workers are doing it of their own volition – 30% (49 million) are free agents and 40% (64 million) are casual earners. However, a significant number are gig workers out of necessity – 14% (23 million) are reluctant and 16% (26 million) are financially strapped.
Another interesting finding that emerged from the research is that free agents reported higher levels of satisfaction across more areas of their work lives than people who are in traditional employment through choice.
As digital platforms increase in number, efficiency and sophistication, it is going to become even easier for customers to put requirements out there and for freelancers to secure the work. Just 15% of the independent workers participating in the MIG report reported using a digital platform to find work.
As digital transformation becomes more widespread and more readily understood, MGI says several other factors could cause the gig economy to grow yet further. They are:
- More people currently in traditional employment might want to make the move into independent work
- Unemployed and inactive populations may choose to enter independent work
- There will be an increased demand for independent services from both consumers and organizations
All in all, these are good times to be an independent worker and the signs are that it is going to keep getting better.
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