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Part-time income is growing and more complex in the US

New York

EVEN after a long economic expansion, America is still the land of the side hustle. New evidence suggests that non-traditional work arrangements with multiple income sources are more common and more complex than commonly thought.

About one-third of people with multiple jobs say they do them out of financial necessity.

On the other hand, some legislators and presidential candidates who have taken aim at regulating the so-called gig economy may want to consider another data point: About half of those with multiple jobs do it to earn extra money (48 per cent) or for some other reason that suggests it is their preference.

Because measurements depend on how a job is defined, it's not easy for policymakers to get a clear portrait of the American workforce. The stereotype is a person performing one job for one employer. But that describes only about two-thirds of workers. Increasingly, people are drawing income from self-employment.

Altogether in 2017, 17 per cent of tax filers submitted a form to the IRS indicating receipt of self-employment income, the highest share since data became available in 1957 and up substantially from 10 per cent in 1981.

While these non-traditional relationships raise concerns about job quality and access to benefits, the evidence suggests such jobs are in many cases supplementing traditional employment, not replacing it.

Just over half of these self-employed workers (55 per cent ) also receive a W2 from an employer, a share that has not changed since 2000. The vast majority of tax filers (92 per cent) continue to receive W2 income as employees, and that also has held steady in recent years, according to research from IRS economists. The IRS data on the level and trend in self-employment contradicts information from the Bureau of Labor Statistics. The BLS has shown a slight decline in the share of workers who are self-employed and estimates it at now around 10 per cent. The discrepancy arises because both the bureau's Current Population Survey and the Census Bureau's American Community Survey identify people as self-employed based only on the job in which they spend the most time working.

At Gallup, my colleagues and I decided to go beyond collecting data on primary work experiences and directly ask about multiple jobs and employment relationships. Our Great Jobs Demonstration Survey was based on responses from over 6,000 American workers in the spring of 2019.

The data show that 36 per cent of workers are not in the traditional one-job-for-one-employer relationship. Eleven per cent of all workers are both self-employed and working for an employer, similar to IRS data showing that 10 per cent of tax filers fall into that category.

Our Gallup survey puts the number of people holding multiple jobs at 28 per cent, well above the BLS' estimate of 5 per cent. That's because the bureau measures this quite differently than we did. It counts only people who reported working both their jobs in the prior week and excludes those who are self-employed in multiple jobs. In fact, the bureau defines a job as a definite arrangement for regular work for pay every week or month, so it could count a worker with two irregular gigs as having one job or none.

The Gallup survey prompted respondents to think about their distinct sources of income and allowed them to judge whether that source was meaningful enough to qualify as a job or not. The resulting estimate was much closer to IRS data than the BLS estimates.

To investigate job quality, the Gallup survey asked workers to rate their "employment situation" on a zero to 10 scale, in which zero is the worst possible employment situation and 10 is the best. Workers in the traditional one-job employee relationship rate their employment situation only slightly better than all other workers (65 per cent give their situation a high rating, from seven to 10, compared with 59 per cent of all other workers).

Self-employed workers with one job rate their employment situation better than those who are employees with one job - with 74 per cent providing a high rating. This seems surprising because the self-employed workers are much more likely to be working only part time and much less likely to have health insurance or retirement benefits through their work. Several explanations are suggested by the data: Compared with workers in traditional relationships, those who are self-employed with one job are much more satisfied with their power to change things they don't like about the job, and with their control over hours and their sense of purpose.

The reasons people give for working multiple jobs are strongly related to how they evaluate their employment situation. Those who say they work multiple jobs for some positive reason - they want to earn extra money; they enjoy, love or are interested in what they do; or they see it as a hobby - are generally upbeat about their work. Sixty-four per cent rate their job situation a seven or above, whereas those who work multiple jobs out of necessity view their work less favorably (41 per cent rate their job a seven or above).

Overall, very few - just 2 per cent - say they work multiple jobs because they can't find a full-time job.

These answers shed light on why people work multiple jobs, but it remains unclear why self-employment relationships have expanded over the last four decades. Especially in recent years, technology has played a role, greatly helping customers match up with contractors and making it easier to find an interesting job that leads to extra income.

Whatever the reasons for the increase, workers rather than employers seem to be driving the trend in self-employment because the increase comes from people combining self-employment with traditional employee relationships. NYTIMES

  • The writer is the author of A Republic of Equals: A Manifesto for a Just Society, recently published by Princeton University Press. He is the principal economist at Gallup.