As the cost of living continues to rise, a Bankrate survey found that over half of workers have taken on second jobs in the past three years.
For many people of modest means, taking a second job has been a go-to option for seasonal and/or short-term additional earnings. Whether planning for special holidays, noteworthy family events, or a one-time purchase, a “side hustle” has enabled many families to have a few extra comforts to make life more enjoyable.
But a new consumer survey finds that in recent years, an increasing number of workers are taking on second jobs for household needs, instead of wants. As the costs of living continue to creep upward, many working Americans are finding that one full-time job is simply not enough.
More than half of workers — 52% — have taken on second jobs in the past three years, and nearly one in three survey respondents believe they will always need a second income just to make ends meet, according to Bankrate.com.
“While it’s admirable that so many Americans are putting in extra time and effort on their side hustles, it’s unfortunate that most are doing so simply to fund their expenses,” noted Ted Rossman, Bankrate senior credit card analyst.
The workers who most frequently turned to side hustles were Generation Z ages 18 to 27 (48%), parents with children younger than 18 (45%), and millennials ages 28-43 (44%). For their extra work, average monthly earnings rose from $810 in 2023, to $891 this year. The extra income typically is used to help pay for housing and groceries, paying down debt, or savings.
These findings follow a Bankrate pay raise survey released this spring that showed household budgets remained strained, despite the nation’s slowing inflation, particularly in the areas of housing and insurance.
“Although the much-feared recession hasn’t quite yet reared its head, three in five U.S. adults (59 percent) reported feeling like the economy is in a recession toward the end of 2023,” according to the survey. Many of these workers are concerned about their ability to purchase a home.
Almost two in five (37%) surveyed said they would move out of state to find a home they could afford, according to Bankrate’s home affordability survey.
But move where? Housing is often the most costly monthly household expense — whether renting or purchasing a home.
Consumers considering purchasing a home should be aware that nationwide the median price of a new single-family home is $495,750. The median price means that half of all new homes sold in the U.S. cost more than this figure and half cost less, according to the National Association of Homebuilders (NAHB).
Moreover, 134.9 million U.S. households — roughly 77% — cannot afford this median-priced new home based on a mortgage rate of 6.5%.
For families considering purchasing an existing home, NAHB has more sobering information: 66.6 million households cannot afford a $250,000 home.
And rising apartment rents make it even harder for some workers to save for a home. The national median rent for an apartment in March 2024 was $1,987, $373 higher than four years ago, according to Rent.com. On a regional basis, median monthly rents trended cheaper in the Midwest ($1,456) and South ($1,656), but were higher in the Northeast ($2,504) and West ($2,365).
As this column recently reported on The State of the Nation’s Housing 2024, the annual report published by Harvard’s Joint Center on Housing Studies (JCHS), 22.4 million renters nationwide pay more than 30% of household income for housing, and 12.1 million pay more than half of their income on housing and utilities. And nationwide, renters with the lowest incomes have just $310 left over each month to cover all their non-housing needs.
In short, household cash crunches are in large part being driven by the cost of housing. But housing is not the only factor that has consumers turning to second jobs. Other costs include:
Groceries — the average household spends $475.25 per month for food, according to the U.S. Bureau of Labor Statistics, as reported by USA Today.
Student loan debt — the average monthly student loan payment for a new college graduate is $500 with an APR of 5.5 percent. For those who pursued graduate degrees, the monthly payment is even higher and the debt deeper, according to the Education Data Initiative. Nationwide, 43 million student loan borrowers collectively owe $1.7 trillion.
These costs do not consider additional household expenses like transportation, health care, childcare, or insurance.
The post When Working Full-Time Isn’t Enough: Growing Number of Side-Hustle Jobs appeared first on The Washington Informer.
