Year-end holidays are usually joyous, filled with gift-giving and plenty to eat and drink. But with inflation surging this year, some of that cheer has been replaced with worry about how to afford those treats along with everyday necessities.
Some Americans are coping by cutting back on things they don’t need or finding cheaper options, but an increasing number of Americans are taking on side hustles.
In November, the economy added 263,000 jobs, the Bureau of Labor Statistics said on Friday, topping economists’ average forecast of 200,000, according to Dow Jones. Buried in the details, though, is a 165,000 jump in people holding multiple jobs. That’s the largest rise since June and above the 60,000 monthly average increase in the last six months, noted Comerica Bank chief economist Bill Adams.
This trend was also noted in the Federal Reserve’s Beige Book, which chronicles economic conditions in different regions across the country.
“Nonprofit service providers noted an uptick in the number of clients relying on side gigs to make ends meet or as pathways to financial self-sufficiency,” the Atlanta Fed said in its portion of the report last week.
Who’s taking extra work?
Most adults (68%) either already have or plan to pick up a side gig, like delivering food with DoorDash or renting out extra space in their homes, according to a Neighbor.com survey of 1,000 people taken on Oct. 30.
Additionally, 44% of Americans currently work or plan to work a seasonal job, like shipping packages for Amazon or stocking and unloading for Walmart. And 51% either currently work or plan to work overtime at their current 9-5 job, the survey said.
Of those taking on extra jobs, 18 to 40 year-olds remain the largest group of side hustlers, said Kathy Kristof, editor at SideHusl, which researches opportunities to make extra money. “But over the last six months, we’ve seen an increasing number of seniors looking to help make ends meet,” she said.
Why are people taking side hustles?
The highest inflation in a generation has ravaged household budgets, with many Americans increasingly dipping into savings and racking up credit card debt to pay for everyday items. The personal savings rate dropped in October to 2.3%, the lowest in 17 years, the Commerce Department said on Thursday.
Meanwhile, third-quarter household debt climbed at the fastest annual pace since 2008, with credit card balances rising by 15%, the most in 20 years, Fed data showed. The surge came even as credit card interest rates rose to the highest level since the mid-1980s, according to Bankrate data.
More than 4 out of 5 Americans who currently have or plan to take on a side gig, seasonal job, or extra hours at work say inflation played a role in their decision, Neighbor.com said.
Inflation bites:Two-thirds of workers are saving less after inflation. Here’s how to save more money.
No need to leave the house:Stress-free side hustle: Selling or renting your stuff online
“There’s always a holiday uptick from October until February or March by people who do these jobs to pay for holiday gifts, parties and clothing,” Kristof said. “This year, it’s very hard to differentiate the holiday uptick from the inflation uptick, but all of it combines for a significant rise in people looking for side hustles.”
For seniors, “the stock market dropped as inflation soared, so some people know that they’re in no position to handle that increase in costs and decrease in savings,” she said. “And other people are just worried they won’t be able to keep up with inflation given the state of savings.”
Inflation gloom:Holiday shopping kicks off with inflation dampening spirits
Credit card control:Beware of store credit cards this holiday. Here’s why they may end up costing you more.
How are people making extra money?
Gig workers still mainly gravitate towards rideshare driving, delivering groceries, and renting out living and storage space, which usually don’t require a long resume or experience, Neighbors.com said.
But the gig economy has expanded since the early days. “The great news is that experience is highly valued in today’s side hustle world,” Kristof said. “There’s burgeoning growth in professional side hustles that offer opportunities in consulting, law, accounting, HR (human resources), marketing, and even engineering and project management. It’s highly paid and highly valued remote work.”
Professional side work can pay upwards of $50 an hour, she said.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at email@example.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
Story Credit: usatoday.com