Side hustles, ‘unretiring’ on the rise as workers combat increasing expenses

Younger workers are taking on more side hustles and older workers are “unretiring” to offset rising costs and low income growth, reports show.

Multiple studies have tracked increases in the self-employed “gig” economy and returns to the workforce by people who retired during COVID-19 restrictions. 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 Americans 75 and older in the labor force will grow 96.5% by 2030 as more senior workers defer 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 raises interest rates. Rate increases since March 2022 have made it harder for younger workers to obtain 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 this year confirmed the rise in side gigs and unretirement:

• Paychex found in a February survey that 1 in 6 retirees considered returning to work, and 53% wanted 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. Young people and those making six figures were likelier to earn wages outside their main jobs.

More than one-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. More than 1 million were 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 said 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 regular full-time jobs with health care benefits. Some of such work is available for sign language interpreters, executive assistants, web designers and online resellers.

Nearly 1 in 3 Americans have worked as independent contractors 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.

Because of a decline in U.S. birthrates, the trend is 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.”