Independent work: choice, necessity, and the gig economy

Box 3. Temporary work, long-term questions (continued)
In addition, temporary work is more prevalent among low-income earners. Across all 
surveyed countries, more than half of independent earners from households earning less 
than $25,000 a year had at least one temporary contract in the past year. In higher-income 
households, the same was true for less than one in five independent workers. In many 
countries, low-skill workers are more likely than higher-skill workers to be engaged on a 
temporary basis.
7
 One study found that even controlling for the type of occupation as well 
as for demographics and English proficiency, workers on temporary contracts made about 
18 percent less per hour than non-temporary workers in California—and temporary workers 
were twice as likely to live in poverty, receive food assistance, and rely on Medicaid.
8
 
Still, not all temporary workers fit the definition of low-income households seeking to make 
ends meet. There is also a trend toward highly skilled professionals choosing to work 
as independent contractors but doing so through staffing agencies. Kelly Services, for 
instance, derives 20 percent of its annual revenue from placing technical and professional 
workers.
9
 Examples include, for instance, teams of scientists who conduct drug trials for 
pharmaceutical companies on contract, and then move on to a different company when the 
trial is finished. These individuals are typically free agents, choosing to pursue independent 
work because of the flexibility, autonomy, and variety it offers. Nevertheless, the temporary 
segment of the independent workforce merits attention. Some the issues facing reluctant 
temporary workers (as well as low-wage independent and traditional workers) are further 
discussed in Chapter 4.
7
  For more on these issues, see 
Poorer than their parents? Flat or falling incomes in advanced economies
, 
McKinsey Global Institute, July 2016.
8
  Miranda Dietz, 
Temporary workers in California are twice as likely as non-temps to live in poverty: Problems 
with temporary and subcontracted work in California
, UC Berkeley Labor Center, August 2012.
9
 
2015 annual report
, Kelly Services.
Exhibit 14
SOURCE:  McKinsey Global Institute analysis 
1 EU-15 based on population-weighted extrapolation from five countries surveyed: United Kingdom, Germany, France, Spain, Sweden.
NOTE: Numbers may not sum due to rounding.