With more than half of Americans not getting a pay boost in the past year, many are turning to side hustles to make ends meet.
Nearly half of Americans have side hustles: working as Uber or Lyft drivers, picking up gigs through TaskRabbit or getting additional freelance work. Forty-three percent of those side hustlers work full-time, while 51% are part-time workers, according to a new Bankrate.com survey.
“The economy is still strong, but wages have been stagnant for a while. We found that more than half of Americans say that they haven’t gotten a raise in the past year. So the reality for a lot of people is that they still need a side job to make ends meet even if they have a full-time job,” says Bankrate.com analyst Amanda Dixon.
The job market is certainly robust: The unemployment rate dropped to 3.6% in April, the lowest in nearly 50 years. And there have even been signs of labor shortages as the number of job openings have consistently exceeded the number of people looking for work.
Still, the fact that 3 in 10 workers say that the extra income from side hustles is needed to pay regular living expenses is alarming, Dixon says. “It’s a red flag if people are working full-time and that’s not enough for them to cover everything that is within their budget. And so for a lot of people they do rely on these gigs to pay for all of the things that come up in their day-to-day life,” she says.
The average worker with a side gig brings in an extra $1,122 a month by working 12 hours a week, according to Bankrate’s survey. For most (66%), the extra money accounts for less than half of their monthly earnings.
While finding a better-paying job would be a solution for full-time workers, that’s not always an option. “It really comes down to managing your money well because even if you’re making more money, you can still run into a problem of not being able to pay your bills. So regardless of how much money you make, it’s really about having a budget, having a plan, and having savings that you can tap into for emergencies,” says Dixon.
Side hustle challenges
While side gigs bring in more cash, they can also present a new set of challenges.
“I think what a lot of people don’t realize, the idea of having a side hustle seems for some people more glamorous than it really is. They might think this is a great way for me to make extra money,” Dixon says. “People might not realize that they don’t have the same types of rights that they would have from their regular full-time job, they don’t have the same benefits.”
For instance, when Uber was preparing to go public last month, thousands of drivers took part in protests and demanded living wages. Uber drivers earn on average only $9.21 an hour once vehicle expenses, payroll taxes, Uber fees, and the cost of a “modest benefits package” are subtracted, according to the Economic Policy Institute.
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