Summary:

Is the rise in independent work contributing to the rise in inequality? We asked this question last week. One expert who responded feels he has an answer, based on his firm’s research on the question and a reminder that correlation does not equal causation.

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Last week we highlighted a piece in Canadian magazine Maclean’s that explored the question of whether the rise of independent work was contributing to rising income inequality. And while I argued that it was pretty hard to see how independent work rather than government policy and the globalization of the evolution of tech was the root cause of increasing inequality, the post closed by pondering whether the growing number of independent workers was in some way contributing to the widening gap between the haves and have-nots once the process was under way.

I didn’t have any solid data to answer that question, but one reader did: Steve King, a partner at consulting firm Emergent Research. King shared his insights on coworking with WebWorkerDaily recently and shot us an email suggesting we check out his firm’s research on the question of inequality and independent work. In a blog post explaining his company’s position on the issue, King states unequivocally that there is no causal relationship between the two trends:

As part of the 2011 State of Independence study we looked at independent worker income. We found median per capita income for U.S. independent workers to be roughly the same as the median per capita income for workers overall.

We also found a fair amount of income inequality among independent workers. In particular 3 overlapping groups of independent workers significantly out earn other independents: (1) older independents (55+), (2) independents who have been independent longer than 5 years, and (3) independents that are highly satisfied with independent work.

In other words, income inequality among independent workers somewhat mirrors overall income inequality.

Our explanation — which is based on our interviews and other qualitative work — is independent workers with the right skill sets and experience are thriving and are much more financially successful than those who don’t. This is very similar to what is happening across the workforce in general.

Because of this, we don’t see the shift to independent work as a cause of income inequality.

Instead, Emergent Research feels that independent work and inequality are rising at similar trajectories because both trends are powered by the same phenomenon. Recommending former Labor Secretary Robert Reich’s book Supercapitalism for those who want a deep dive into the subject, King pulls a quote from the book to explain the underlying causes of both trends: “The crisis marks the triumph of consumers and investors over workers and citizens.”

Maclean’s view that “independent jobs are bad and we should return to a world of traditional jobs is widely held,” King commented. “But it’s not going to happen. The shift towards independent work is too far along and too powerful.”

Has King convinced you?

Image courtesy of Flickr user BlaisOne

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