While researching the prevalence of side jobs and income earned outside of a primary occupation, we’ve found somewhere around 31% of all American adults have some side hustle. In our last post we delved into the time Americans spend on side activities. In this post we’ll paint a clearer picture of how serious these side jobs are – let’s examine how much Americans earn doing side work.
How Much Do Americans Earn From Side Jobs?
Our data in this post comes from the 2017 Federal Reserve Survey of Household Economics and Decisionmaking. We’ve been using it extensively lately to look at retirement and side jobs in the United States – and it’s a colorful and extensive dataset for those purposes.
One of the questions they asked (of people reporting side work) was “About how much of your monthly income do you get from paid work activities or side jobs?“. If the respondent had a spouse or partner, the question was for both – percentage of all income earned “from you and your spouse or partner”.
Respondents mostly picked ’round’ numbers, but imagine a curve sloping up to 2-3% then sloping down to 20% (followed by a long tail). Also interestingly, and as we saw in previous posts, some people make all their money from side jobs.
What could cause that? Temporary training or education, internships, unemployment, and other various reasons for not taking home a paycheck from a main occupation.
Or, you know, trolly responses to the survey.
What Americans Make From Side Jobs (Cumulative)
Another slice we’ve been taking of this side job data is cumulative buckets of various measures. Here we tallied the cumulative number of people who earned some overall percentage or less from side jobs.
|Percentage of Overall Income||Percentage of Side Workers||Cumulative Percentage|
Obviously, we eliminated some odd-number responses, but you can see the interesting pattern that emerged. Only around 5.1% of side job workers make more money from side jobs than other activities.
Side Jobs as a Significant Source of Income
Whatever you feel a significant amount of income is, the Fed actually posed a question directly on it. Respondents were asked, “In the past 12 months, to what extent has the money earned from occasional paid work activities or side jobs been a significant source of income for you?”
|Was Side Income a Significant Source of Income?||Number of Americans||Percentage of Side Job Workers|
|Does not apply||11,468,189||15.44%|
|Not at all||29,878,762||40.24%|
Interestingly, a full 44.3% of people working side jobs found the income they were receiving either somewhat or very significant.
What is a Significant Amount of Income When Working a Side Job?
Being a subjective question it’s unfair to guess the cutoff linearly from the cumulative responses above. But for a second imagine every American is in perfect agreement (ha), and forgive that clunky reasoning. If you’ll let this slide we can take a guess at what a significant source of income might be.
Using that limited criteria, the cutoff for significant income is earning 4-5% of your total income on the side.
Side Jobs as a Regular Source of Income
While the Fed asked about significant income, they also asked a question seemingly more focused on supplemental income. “In the past 12 months, to what extent has the money earned from occasional paid work activities or side jobs been a regular source of income for you?” was posed to the same population.
|Did Your Side Job Provide a Regular Source of Income?||Number of Americans||Percentage of Side Job Workers|
|Does not apply||11,186,796||14.93%|
|Not at all||38,703,262||51.66%|
These numbers were even lower than the significant income numbers above. Presumably, some of that aforementioned significant income was earned in a lump sum or otherwise wasn’t year round. This might be the case with seasonal employment for holidays, or the infamous summer job. Any more examples you can think of? Temporarily selling things online?
Looking at Side Jobs by Earnings
This was an interesting data set to dive into. The subjective questions are interesting. We get a sense of how regular these side jobs are and if people feel they provide significant income as well.
They also cause you to think through your own priors!
My gut feel? Significant income feels like earning another month’s worth of income out of a side job. That’s ~8% for a single or ~4% for a couple per earner. Conveniently, the latter number matches the guesstimate from above…
Very interested in your thoughts and reasoning on this one, folks… What’s a significant income source for you? How did you arrive at that number?