In our recent bestseller, “Breakpoint: The Crisis of the Middle Class & The Future of Work” we said that even as office jobs dwindle, India could see the creation of 100 million gig jobs over the next few years. This piece says that gig job creation has taken off in USA.
The Washington Post’s opening thesis: “Artificial intelligence is making it easier to start businesses. Contrary to the future envisioned by doomers, AI will drive more independence in the labor market by reducing the costs to owning your own business.”
The claim rests on “a compelling new paper by Liya Palagashvili of the Mercatus Center,” who “found a surge in self-employment among professions most affected by AI right around the time that AI products became widespread.” The logic begins with why people work for firms at all: “Part of the reason that people work for corporations rather than being self-employed is economies of scale. It’s easier for customers to contract with a corporation that includes lots of workers than for each worker to contract individually with every customer.”
AI, the argument goes, lowers that barrier for anyone whose work is already one-to-one — “a self-employed accountant, where the worker has one-on-one relationships with clients anyway, could make sense.” The shift is not starting from zero, either: “as of 2023, 11.9 million workers were independent contractors as their sole or main job.”
The data are striking. The paper sets high-AI-exposure industries — “professional services, information, education, finance and insurance” — against low-exposure control groups in “construction and wholesale trade.” New non-employer business formation in the non-AI industries stayed roughly flat between early 2024 and early 2025, but “for the AI-exposed industries, it was up by 26.8 percent.”
At the occupation level, “the top 10 most AI-exposed occupations — such as management analyst, lawyer, actuary and economist — saw a 20 percent increase in solo self-employment compared to right before generative AI became widely available,” while the least-exposed jobs — “fitness trainer, landscaper, construction worker and dining room attendant” — were “completely flat.”
Ms Palagashvili’s own conclusion reframes the whole jobs debate: “The first labor-market effects of AI may not appear primarily as mass unemployment. They may instead emerge through the growth of independent work and solo self-employment.”
There is a subtle second-order point worth noting for anyone watching corporate costs: rather than resort to layoffs, which “can hurt morale and risk destroying knowledge about how the business works,” firms may instead cut the contractors they buy services from, pulling more work in-house as AI makes doing so cheaper
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Note: The above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. The information provided is intended for educational purposes only. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India (SEBI) and is also an FME (Non-Retail) with the International Financial Services Centres Authority (IFSCA) as a provider of Portfolio Management Services. Additionally, Marcellus is also registered with US Securities and Exchange Commission (“US SEC”) as an Investment Advisor.
