Younger workers are taking on more side hustles and older workers are “unretiring” to offset rising costs amid slow wage growth, recent reports show.
Multiple studies have tracked increases in the self-employed “gig” economy and people who retired during COVID-19 restrictions returning to the workforce. Financial analysts attribute the trend to the combined influence of a strong labor market, more people working from home and slow economic growth.
“Data shows nearly half of Americans are picking up side gigs and many retirees are thinking about returning to the workforce,” Curtis Dubay, chief economist of the U.S. Chamber of Commerce, told The Washington Times. “As inflation remains high, outpacing wage gains, we’re seeing the savings people may have built up during the pandemic now being spent down.”
Labor analysts say a slow economic recovery and persistently high prices have forced many retirees on fixed incomes and those close to retirement to burn through their savings.
The Bureau of Labor Statistics estimates that the number of people 75 and older in the labor force will grow 96.5% by 2030 as more senior workers defer their retirement or unretire to cover expenses.
“It’s no secret that Americans are being impacted by inflation, interest rates and overall increased costs of living. With this in mind, many retired individuals are not able to rely on their current pension or savings to make ends meet and inevitably have to go back to work to address these financial challenges,” Robert Boersma, an executive at the jobs website Talent.com, told The Times.
Meanwhile, more young people have taken second — and third — jobs as the Federal Reserve continually raises interest rates. The rate increases since March 2022 have made it harder for younger workers to get bank loans to purchase cars and homes.
“This unattainable cost of a home forces many to abandon the dream of building equity, and it saps the motivation for long-term wealth production,” said Andrew Crapuchettes, CEO of Idaho-based recruitment agency RedBalloon. “Some try to beat the system by working more jobs, longer hours or developing a side hustle.”
Two surveys released earlier this year confirmed the rise in side gigs and un-retirement:
• Paychex found in a February survey that one in six retirees was considering returning to work, with 53% wanting remote positions. Among them, 55% said they were returning to work because they needed “more money.”
• In March, a LendingClub and PYMNTS.com survey found that half of all workers reported having at least one side gig, with young people and those making six figures the likeliest to have additional income outside their main jobs.
More than a third of employees who can work from home now do so all the time, the Pew Research Center reported in March.
Growing numbers of employees started taking second jobs driving for Uber or Doordash while working from home during the first year of pandemic restrictions.
In an analysis of IRS data based on the 1099 Form for independent contracting tax returns, a National Bureau of Economic Research paper found “a jump in gig work by around 1.2 million workers” in 2020, with more than 1 million working in transportation and delivery. Another 150,000 of the new gig workers came from creator/influencer platforms.
“New technologies and digital platforms have ushered in the rise of the independent workforce,” said economist Liya Palagashvili, a senior research fellow at George Mason University’s free-market Mercatus Center.
Women make up the majority of independent earners in “freelance work, contract work, consulting, and other types of self-employed or ‘gig’ work,” she added in an email.
“Women tend to favor jobs that allow greater independence, more freedom to make decisions, less structure for the worker and shorter work weeks,” Ms. Palagashvili said. “For primary caregivers in particular, independent work can provide the flexibility and time required to care for a child or [aging] parent.”
According to GOBankingRates, 22 side gigs can pay more than a regular full-time job with health benefits — including work for sign language interpreters, executive assistants, web designers and online resellers.
Nearly 1 in 3 people have worked as an independent contractor since 2014, said Gretchen Baldau of the American Legislative Exchange Council, a network of conservative investors and state legislators who support laws favorable to independent contractors.
“That number reached 39% in 2022 [and] is expected to increase to 50.9% by 2028 as flexibility and work-life balance remain key factors in labor decisions,” Ms. Baldau said in an email.
Declining U.S. birth rates make the trend likely to keep growing for the foreseeable future, said Tim Carney, a senior fellow at the American Enterprise Institute.
“The working-age population has flatlined and will soon begin falling,” said Mr. Carney, the author of an upcoming book on the “baby bust” and parenting. “That means there will be fewer people to fix leaky pipes, cook dinner and write news articles. Meanwhile, retirees live much longer today than they did a generation ago.”
• Sean Salai can be reached at ssalai@washingtontimes.com.