Life is varied in the 1099 world. In the so-called independent economy, some people work for themselves, full-time, doing such soloist gigs as writing or designing websites. Some people are mostly (and happily) caregivers, but maintain an Etsy store for a few hours per week while their kids are at school. Other people would dearly love a full time job, but cannot find one, and so pick up projects here and there. Other people have full time jobs, but moonlight too because the main job pay is atrocious.
The problem with much research on the independent economy is that these people are incredibly different. Asking “are independent workers happy with their lives?” or “do independent workers worry about money?” will give you different answers if you look at different groups. For some people, the insecurity of hustling for what you take home every week is a huge burden. Others are well-capitalized enough not to care, or it doesn’t even make sense to ask the question. A high-end consultant gets paid by the project, and projects can go for months.
So I was intrigued to see the McKinsey Global Institute’s attempt to come up with a taxonomy of independent workers in a new report called Independent Work: Choice, Necessity, and the Gig Economy. Their four categories depend on whether independent work is one’s full pay or supplemental, and whether you are independent by choice or not. So “free agents,” which includes people like me, are full time solo and there by design. “Casual earners” are those who do something else with their time, but have projects (by choice) to earn a little something on the side. “Reluctants” are full time solo, but don’t want to be. And those who are “financially strapped” have another income but freelance out of necessity to make ends meet.
(For what it’s worth, coming up with independent worker taxonomies is kind of a parlor game in this space. When I wrote about “The Promise and Peril of the Freelance Economy” for City Journal in 2009, I used “soloists,” and “microbusiness owners” to get at the difference between those selling services and those selling goods, and then I talked of “permalancers” who operate in the gray area where companies are calling people contractors who really aren’t, or who have very low-end free agent pay (e.g. taxi drivers). Dan Pink has his own taxonomy in Free Agent Nation, and I explored these topics a bit more in Grindhopping: Build a Rewarding Career without Paying Your Dues, should anyone want to dig that book up).
McKinsey surveyed these various categories, and found that generally independent workers are happier than traditional workers. Indeed, “For every primary independent worker who would prefer a traditional job, more than two traditional workers hope to shift in the opposite direction.” Free agents in particular are so satisfied with their lives that they score better on most questions of freedom, work/life balance, and so forth, and even say they are as happy as traditional workers on questions of income security and benefits. People who are freelancing out of necessity are also happier with the lifestyle, but are not so happy with the security factor, which makes sense.
Intriguingly, only 15% of independent workers said they had used a digital platform to find work. Like most other people who’ve tried to write about the gig economy, I’ve studied Freelancer.com and TaskRabbit, and the like. I love the concept, but I’ve personally never used anything along those lines, and can’t see why I would. When people are hiring me as a writer, they are generally hiring me. Brand You type businesses are built on relationships, not “I need a writer” or “I need a speaker, let’s see who’s available.” One of the key speed bumps on the road to a frictionless labor market is that people are not interchangeable. However, for some tasks, they sort of are. Any licensed, safe, courteous driver can drive you to the airport, and with Uber you don’t really choose which driver you are getting. This interchangeability is great for people who want to plug into something quickly to earn cash without needing to build an entire business. Again, we see that the independent economy is a varied place.
This variability also plays into the level of insecurity people feel. It is very true that income goes up and down. During my first 18 months of full-time freelancing (when I was not married and thus adding a second income and sharing expenses) I had a month where I earned $400, and a month where I earned $10,000. Of course, the fact that there were $10,000 months when I was 24 and had very limited expenses means that the situation was not remotely dire. I simply saved when I got big checks and that covered the dry months. That seemed straightforward enough, so when I wrote the City Journal piece in 2009, I was intrigued that a big chunk of independent workers said they were interested in buying into state unemployment schemes, which are generally funded by taxes on employers. I still find this slightly odd that people would pay a tax to do what they could do on their own: save for a rainy day (and thus keep control of the money — getting unemployment payments involves some hurdle clearing, and given how hard it would be for a free agent to prove actual unemployment, being able to make this judgement call yourself would seem quite important). I will chalk that up to researching that piece during the middle of the Great Recession, when work was probably thinner for a lot of people than they wanted, making such concepts more appealing.
In any case, McKinsey found that the majority (70%) of independent workers were independent by choice. There are plenty of people who want to work, but don’t want to work in traditional ways. I know I have never been tempted, since I went out on my own full time in 2003, to go back. This was long before kids, and before I needed any sort of work/life balance. It is simply incredibly satisfying to have autonomy over one’s work, and to control one’s time.
In other news: The phrase “stretched too thin” could apply to some parts of the independent economy, but people also use it to talk about time. My friend Jessica Turner, author of The Fringe Hours, and host of TheMomCreative blog, is doing an online class for working mothers called STRETCHED TOO THIN. I will be taking the class myself to see her tips for managing a 9-5 in-the-office job, caring for multiple small children, and creative hobbies. I know my work style means I have more flexibility than some chunk of my readership, and I am always looking for new tips to deal with the juggle. You can use that link above if you’d like to enroll too. FYI, as a reminder of my blog policy, I don’t do affiliate links/sales; I only link to things if I think they would be of interest.