The side hustle? It’s a trap! And if we’re not careful, we’re going to end up with a new economic category: the Four-Income Household. In fact, we might already be there.
A new Bankrate survey found that 45% of American workers say they have a side hustle. At the moment, 3 in 10 hustlers who have full-time work say they need their side job to pay for the basics. But as I read the numbers, it’s worse than that.
The other two-thirds say they use the extra cash for savings or discretionary spending. But a generation or two ago, those categories were covered by middle-class jobs. They need a side hustle to save money. That’s not a hustle. It means their primary employment wages are depressed.
Sure, there are cases where a side hustle is a passion project that’s blossomed — the Etsy storefront that turned a hobby into a vacation home or early retirement. But the gig economy has a dark, dark side.
The trap is this: Side hustle income is now being built into the cost of living. We’ve been here before.
Long before U.S. Sen. Elizabeth Warren became a nationally known political figure, she wrote a book called “The Two-Income Trap,” which every American should read. She notes this oft-overlooked consequence of social change from the 1950s and ’60s: Basically, a middle-class life that once required only one income now requires two.
There’s plenty of good and bad that flow from this change, but one thing that did nothappen: The rise in household income that came from both partners working didn’t lift our standard of living. It mainly raised the price of things. When there’s that much more money chasing the same number of houses, the price of housing goes up.
by Bob Sullivan