Pop quiz. Suddenly, you have an unexpected $15,000 expense. You have some savings but not enough to cover it. What do you do?
One option is to earn more money, perhaps, with a second job.
The U.S. Bureau of Labor Statistics (BLS) estimates that about 7.58 million Americans had a bona fide second job in 2022, up by about half a million folks.
That number means that about 4.8 percent of the total job-eligible population was doing double duty at a second job.
|Total Number 2021
|Total Rate 2021
|Total Number 2022
|Total Rate 2022
|Men (rate) 2021
|Men (rate) 2022
|Women (rate) 2021
|Women (rate) 2022
|Total, 16 years and over
|20 years and over
|25 years and over
|55 years and over
While seven million folks or 4.8 percent of workers doubling up on jobs might not seem like a lot compared to the 168 million Americans that had a job, it was a 12.5-percent increase in the number of workers holding down second jobs compared to the prior year. Put another way, it is like every man, woman, and child in Milwaukee, Wisconsin, getting a second W-2.
Holding down a second job at your local Buffalo Wild Wings or Walmart is only part of the story. In June 2023, CNBC reported that about 53 percent of Gen Z workers have a gig job like Doordash or Uber. What's more, about 44 percent of those Gen Z workers with gig jobs expected to need extra income beyond their main job forever and always.
What does this say for the U.S. economy? Is a 12.5-percent increase in the number of folks with two jobs a problem? What about the perceived dependency on side gigs? Is that dangerous?
Define Our Terms
Having a second job means a person is employed in two distinct, traditional roles. Both might offer regular hours, and the individual may be or is likely to be an employee in both situations.
Having a gig job on top of a regular job implies that a person has a traditional job and also takes on gig work, often facilitated by platforms like Uber, DoorDash, or Upwork. Gig jobs are usually more flexible but come with varying pay and often lack the benefits of traditional employment.
Having an entrepreneurial side hustle means an individual has started their own business venture or project on the side, outside of their regular employment. This could be anything from selling handmade crafts to freelancing or even starting a software company.
So Why a Second Job?
At its core, economics delves into our decisions when resources are limited but have multiple potential uses.
Each choice has an opportunity cost, the value of the best alternative forgone. When it comes to employment, the resource in question is time, and the choice is often between leisure and work.
As more Americans opt for additional work hours by taking on a second job, we can't help but wonder about the broader implications of this choice. Especially since, on a personal level, many of us would rather focus on hobbies or education than having a second job, especially if that additional job is at a wage lower than our first.
To be fair, picking up a second job can be seen as a testament to the American spirit of self-reliance and resilience.
Working a second job when we have to is about individuals taking the reins of their financial future. Whether to make ends meet in a challenging economic period or save for something extra, these workers are increasing their output to boost their income, which is admirable.
The fact that a considerable chunk of the workforce feels the need to juggle two jobs can be a red flag pointing toward economic strain.
Perhaps wages in their primary job haven't kept pace with inflation or the ever-rising cost of living. Maybe the dream of homeownership, quality healthcare, or even just a comfortable life seems increasingly out of reach on a single income.
Having a second job in these circumstances is not about luxury or living large; it's about making ends meet in an economy where the goalposts for financial security seem to be constantly moving.
The increasing number of Americans holding down second jobs isn't just a statistic; it reflects choices made in the face of scarce resources.
Frankly, the current federal administration and many state governors have demonstrated that they know little about economics or how incentives drive choices.
So Why Do Gig Work?
One could say that platforms like Uber, DoorDash, and Upwork have democratized the workspace, allowing individuals to decide when, where, and how they work.
This level of autonomy is what classical economists, including Thomas Sowell, championed: an environment where individuals can make decisions without the heavy hand of government oversight.
In many ways, the gig economy embodies this idea, minimizing barriers to entry and maximizing personal agency.
While many embrace gig jobs for the freedom they offer, there's a growing contingent for whom gig work isn't so much a choice as it is a necessity. For these individuals, the gig economy is less about flexibility and more about piecing together a living when their primary job is not enough.
The Bright Spot: Side Hustles
There is a bright spot in our economic times circa 3Q23. Many Americans are starting a side hustle or full-on businesses to combat economic uncertainty.
The number of new business starts rose in the United States last year, according to the BLS. And that is good news to end on.