In recent years, there has been a noticeable trend among younger Americans who are opting to leave their full-time roles in favor of gig work to make ends meet. This shift in employment preferences is particularly prevalent among Gen Z and millennial workers, who are finding success in the gig economy. According to a recent TransUnion study of nearly 1,000 adults, a higher percentage of Gen Z and millennials are making $2,500 or more a month in gig work compared to their Gen X and baby boomer counterparts. The study revealed that 45% of Gen Z and 44% of millennials are earning this amount monthly after expenses, while only 36% of millennials and 30% of boomers are achieving the same level of income.
Interestingly, older generations were found to be overrepresented among those earning less than $1,000 per month in gig work, as they were less likely to rely solely on gig work as their primary source of income. Among those who do use gig work as their primary income source, half are millennials, compared to 20% for Gen X and 5% for boomers. However, all demographics expect gig work to play a larger role in supplementing their incomes in the future.
Tracey Lazos, head of TransUnion’s gig economy business, highlighted the growing interest in gig work among younger generations, emphasizing the flexibility and income potential that gig economy work offers. Despite the strength of the job market and increased wages over the past 18 months, many individuals have found ways to make gig work work for them across different segments of the gig economy.
Participation in gig work tends to attract younger and lower-income individuals, with more than half of each generation and income bracket having participated in the gig economy at some point as a source of income. Millennials and Gen Z show the highest participation rates at 68% and 67%, respectively, indicating that younger generations are drawn to gig work due to its flexibility, mobility, and self-determination. This contrasts with participation rates of 58% for Gen X and 52% for baby boomers.
As gig work continues to rise in popularity, many younger workers are flocking to these positions for various reasons, such as the opportunity to earn more money, work a more convenient schedule, or explore new career fields. The report suggests that using gig platforms as a primary income source is more likely a decision made amid an abundance of options rather than desperation in a strong job market.
Among the most sought-after freelance positions for all generations are contractors for in-person tasks, digital freelancers, grocery delivery, food delivery, and ride-share drivers. Ride-share drivers, in particular, reported making $5,000 or more a month, followed by grocery delivery and digital freelancers. The report predicts that these numbers will continue to grow, with 38% of people expressing interest in participating in grocery delivery in the future, despite only 22% currently working in that role.
A working paper from May 2023 revealed a significant increase in platform gig workers from 1.8 million in 2019 to 4.9 million in 2021, marking a 170% increase. Lazos emphasized the opportunities for individuals to make money in the gig economy and either supplement their income or rely on gig work as their primary source of income.
However, the report also highlighted the risks associated with gig platforms, including falling inflation, a competitive job market, and economic uncertainty. Common reasons for discontinuing gig work included securing a full-time job or a raise, inadequate earnings or hours, and safety concerns. Additionally, nearly one in four gig workers reported being victimized by fraud or identity theft while using gig platforms, underscoring the need for increased security measures in the gig economy.
Despite the challenges, the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey revealed almost 9 million job openings nationwide, indicating a demand for labor even with historically low unemployment rates. This competition with gig platforms has led some companies to struggle to attract new workers while maintaining affordable services.
In conclusion, the rise of gig work among younger Americans reflects a shifting landscape in the labor market, where flexibility, income potential, and autonomy are valued by workers across generations. As gig work continues to evolve and expand, it presents both opportunities and challenges for individuals seeking alternative sources of income in a dynamic economy. If you have recently transitioned to gig work as your primary income source or have insights to share on this topic, feel free to reach out to the reporter at nsheidlower@businessinsider.com.
