July 12, 2024

Weathering Inflation Storms: Why More Americans Are Embracing Side Hustles

Image Credits: Frederic J. Brown/AFP via Getty Images

The rising tide of inflation is steering more Americans towards side hustles, especially with the holiday season knocking at the door. As the prices of essentials soar, many are taking on extra work to keep up.

According to the latest report from the Labor Department, a whopping 8.4 million people juggled multiple jobs in October, marking the highest figure since July 2019—right before the pandemic shook the world.

That’s around 5.3% of the entire U.S. workforce, a notable increase from just a year ago when it stood at 4.8%.

Why the surge in moonlighting? Blame it on the unrelenting rise in inflation, which is gnawing away at the purchasing power of everyday Americans. Surprising as it may seem, despite nominal wages skyrocketing, the average hourly earnings for all employees dipped by 3.32% in October to $11.05 from $11.43 in January 2021, before the inflation turmoil hit.

Workers today are in a worse financial state than two years ago despite the seeming wage growth frenzy.

The pinch of inflation isn’t just a statistic; it’s hitting wallets hard. Everyday necessities—from food to rent—are scaling up in prices. The burden falls heaviest on those with lower incomes, who feel the tremors of price hikes acutely in their already tight budgets.

The Consumer Price Index, a barometer for everyday goods, including fuel, groceries, and rents, paused in October but maintained a 3.2% annual increase. The staggering reality? Compared to January 2021, prices have shot up by 17.62%.

The inflation storm continues to linger, making necessities like food, gas, rent, and childcare significantly pricier than just a year ago. Estimates from Moody’s Analytics suggest Americans are now shelling out an extra $650 per month for their day-to-day needs—a hefty toll on wallets and savings.

The consequence? Savings are dwindling as people tap into them to keep up with the cost of living. Credit cards are becoming a crutch for many to bridge the gap caused by escalating expenses.

In the face of this financial storm, more are embracing side gigs, seeking refuge from the inflationary pressures. Whether driving for a ride-hailing service, freelancing, or online selling, these additional jobs provide a lifeline in turbulent economic times.

As Americans navigate these choppy financial waters, the rise of side hustles reflects not just a trend but a necessity—a way to weather the storms of inflation and maintain some semblance of financial stability in uncertain times.

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