A notable shift is underway in the U.S. job market, with an increasing number of high-income earners turning to side hustles for supplemental income. Amid signals of a cooling labor market and a rise in unemployment claims, even those earning over six figures are seeking additional revenue streams. This trend highlights the growing financial pressures that transcend income levels, pushing many to seek alternative ways to bolster their earnings.
Recent studies reveal that 26% of Americans earning more than $100,000 annually have taken up at least one side gig. This figure represents the highest percentage among different income groups. In comparison, those earning between $50,000 and $100,000 and those earning less than $50,000 show lower engagement with side gigs. Interestingly, this trend was less pronounced in past studies, where high-income earners were less likely to pursue supplemental income compared to lower-income groups. The shift indicates a broader acceptance and perhaps a necessity for additional income among the affluent.
Statistics from previous years indicated that fewer high-income Americans were engaged in side jobs. The change suggests a growing awareness and need for financial security, even among the wealthy. Additionally, the methods of earning supplemental income have diversified, with high-income individuals increasingly participating in more passive income opportunities such as investments.
Income Disparities and Side Hustles
According to the PYMNTS Intelligence report, 22% of U.S. consumers overall have side jobs to supplement their income. This statistic challenges the assumption that only those living paycheck to paycheck would engage in side hustles. In fact, only 23% of paycheck-to-paycheck Americans struggling with monthly bills work side jobs, a decrease from 29% last year. This decline contrasts with the rising participation among high earners, underscoring the changing landscape of supplemental income.
Popular Side Hustles
The report identifies selling used goods as the most prevalent side gig. Thirty-one percent of consumers have sold a used item in the past year, while over 40% have purchased one. Younger consumers, particularly Gen Z, are the most active in this market, with nearly half having sold and 74% having bought secondhand goods. This trend is less pronounced among older generations, who engage less in the resale market.
High-income earners also benefit from passive income, primarily through investments. About 20% of high-income individuals report earning passive income, with investments being the leading source. This contrasts sharply with lower-income consumers, only 3.4% of whom reported earning from investments. The significant disparity highlights the different strategies across income levels for generating supplemental income.
Key Insights
– High-income earners increasingly take on side gigs to supplement their income.
– Younger consumers, especially Gen Z, dominate the resale market for used goods.
– Passive income through investments is a significant source for high-income individuals, less so for lower-income groups.
While fewer Americans are living paycheck to paycheck than last year, the need for supplemental income remains strong across all income levels. The rising trend of side hustles among high-income earners reflects not just a desire for extra cash but also a strategy for financial security. The diversification of income sources, including active and passive means, indicates a broader effort to mitigate financial uncertainty. For those in lower income brackets, side hustles remain crucial but are less supplemented by passive income opportunities. This evolving landscape underscores the persistent financial challenges and the creative solutions Americans employ to navigate them.
