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How Much Do Americans Earn From Side Jobs?

August 22nd, 2020 by 
PK
Dollars and twenties on top of a computer.

In one post we looked at the time Americans spend on side activities. In this post we'll try paint a clearer picture of how serious side jobs are. Let's examine how much Americans earn doing side work.

How Much Do Americans Earn From Side Jobs?

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.

It begs the question, though: "how serious are these jobs?".

One of the questions in the 2017 SHED 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". Here's how responses shook out:

Percentage of Total Income Earned from Side Jobs (American Adults Who Worked a Side Job)
Percentage of Total Income Earned from Side Jobs (American Adults Who Worked a Side Job)

Respondents mostly picked 'round' numbers as their income percentile from side jobs. As you look at the graph, 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 someone to make 100% of money from a side job?

  • Temporary training or education
  • Internships
  • Unemployment
  • Other various reasons for not taking home a paycheck from a main occupation

Or, you know, trolly responses to the survey.

How Much Americans Make From Side Jobs (Cumulative)

Here we tallied the cumulative number and percentage of people who earned some overall percentage from side jobs.

Percentage of Overall IncomePercentage of Side WorkersCumulative Percentage
017.96%17.96%
119.11%37.07%
27.50%44.58%
31.70%46.27%
40.34%46.61%
517.97%64.58%
60.24%64.82%
70.34%65.16%
80.45%65.61%
90.06%65.67%
1015.28%80.95%
152.69%84.10%
203.81%88.08%
251.35%89.48%
301.71%91.22%
401.42%92.97%
501.54%94.90%
750.28%96.10%
900.48%97.10%
950.21%97.31%

Obviously, we omitted some 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 their 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 AmericansPercentage of Side Job Workers
Refused658,9040.89%
Does not apply11,468,18915.44%
Not at all29,878,76240.24%
Somewhat21,894,28929.48%
Very much11,016,35114.84%

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 on what significant entails.

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 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?".

Here are the responses:

Did Your Side Job Provide a Regular Source of Income?Number of AmericansPercentage of Side Job Workers
Refused531,7510.71%
Does not apply11,186,79614.93%
Not at all38,703,26251.66%
Somewhat16,972,63422.66%
Very much7,522,05210.04%

 

These numbers were even lower than the significant income numbers above.

Presumably, some of the aforementioned significant income was earned in a lump sum or otherwise wasn't year round. This might be 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

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.

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...

Don't Quit Your Day Job...

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