Independent work: choice, necessity, and the gig economy


THERE ARE FOUR DISTINCT SEGMENTS OF INDEPENDENT WORKERS



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THERE ARE FOUR DISTINCT SEGMENTS OF INDEPENDENT WORKERS 
No one-size-fits-all label can cover all independent workers. Two factors need to be 
considered: whether they rely on independent work for their main livelihood, and whether 
they actively chose to be independent or simply turned to it for lack of a better alternative. 
Many individuals rely on independent work for their primary source of income. This group 
includes people who devote most of their time to a single independent activity (such as 
practicing law or planning weddings) as well as those who patch together different types of 
work to generate the majority of their income (say, the aspiring actor who pays the bills by 
doing voice-over work and teaching fitness classes). 
In contrast, supplemental earners are either traditional payroll jobholders who engage 
in independent work on the side or those who have some other primary activity (such 
as students, retirees, and caregivers) and do not rely on this work as their sole means of 
support. Some of these individuals may even think of themselves as traditional employees, 
but because of their other income-generating activities, they fall into our definition of 
independent workers. A university professor who accepts a paid speaking engagement 
would thus be a supplemental independent earner. So would a full-time administrative 
assistant who rents out a spare room in his apartment on Airbnb. 
Second, the independent workforce can be split between those who actively choose 
this working style and those for whom it is merely the best option available. Many earners 
strongly prefer the autonomy and flexibility of independent work. They value being their own 
boss, setting their own hours to some extent, and focusing on work that interests them. 
The doctor who opens a private practice can decide how many patients she wishes to see 
each day.  The freelance editor can say no to dull assignments and difficult clients.  The app 
developer can code all night and sleep all day. The Uber driver can fit his hours around a 
class schedule or family priorities. These people enjoy the perks of being independent and 
would choose to remain so even if they had the option to switch to a traditional job.
40
  This is consistent with research showing the hollowing out of middle-income jobs in the workforce. See David 
Autor, 
The polarization of job opportunities in the US labor market: Implications for employment and earnings

The Hamilton Project and the Center for American Progress, April 2010.
We categorize independent workers into four 
groups by looking at whether they are primary 
or supplemental earners and whether they are 
independent by choice or out of economic necessity.


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McKinsey Global Institute
2. Choice vs. necessity: Understanding the independent workforce 
For others, independent work is a choice borne out of necessity. It may save them from less 
desirable alternatives, such as unemployment or a bad job situation, but they would still 
prefer the security and structure of a full-time traditional job if they could find an acceptable 
one with adequate pay. Some enjoy their flexibility and independence but nevertheless miss 
the predictability of a regular paycheck. Income security is a key issue for this group. 
Applying the two criteria described above—the distinction between primary and 
supplemental earnings, and the distinction between choice and necessity—yields 
four categories of independent workers (See infographic, “Four segments of 
Independent workers”):
 
ƒ
Free agents
 derive the majority of their income from independent work. They choose 
this working style, and they want to continue doing independent work in the future.
 
ƒ
Casual earners
 engage in independent work for supplemental income. While most 
of them have traditional jobs, approximately 40 percent are students, retirees, or 
caregivers. Like free agents, casual earners say they pursue independent work out 
of choice. Some do so for the extra earnings, but they might also undertake these 
assignments purely to pursue an interest, to develop new skills, or to stay engaged. 
 
ƒ
Reluctants
 derive the majority of their income from independent work but would prefer 
to switch to a traditional job if one were available. This group includes people who 
resort to independent work because they cannot find a traditional job that pays well or 
fits their needs—or they can’t find one at all. This could include some people on short-
term probationary contracts (although it excludes those who are long-term temps or 
permatemps, as noted in our original definition of independent work). 
 
ƒ
The financially strapped
 are those who use independent work for supplemental 
income to make ends meet but would prefer not to have to take side jobs. In general, as 
we discuss below, these individuals are more likely than casual earners to be in low-
income households.


47
McKinsey Global Institute
Independent work: Choice, necessity, and the gig economy

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