From Need to Desire, How the Side Hustle Changed in 2021

The gig economy was in full swing before the pandemic even arrived, but 2020 changed everything. That year, necessity and desperation forced hordes of newly unemployed or furloughed workers into Etsy shops or behind the wheels of delivery trucks to make ends meet any way they could.

In 2021, however, the side hustle grew up. Part-time entrepreneurs evolved from trying to make their hobbies pay, as they had the year before, to developing legitimate and reliable alternative income streams.

Looking back, it’s clear that 2021 was the year of the side hustle.

Side Hustling Grew Out of the Hobby Phase

Some of the most closely watched data on the gig economy come from an annual research report produced by DollarSprout, a platform dedicated to side hustling and entrepreneurship. The 2021 Side Hustle Report showed a distinct departure from 2020 in the gig economy.

Last year, for example, just over one in four people were using gig income to cover their monthly bills; but, in 2021, that number has soared to 41%. Also this year, the percentage of people spending over 15 hours per week on their side gigs has more than doubled, from 12% to 27%.

Side hustlers are also bringing in much more money this year than last. The percentage of people earning $1,500 or more per month from their gigs on the side more than doubled from 2020 to 2021.

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More than half of side hustlers have now tried three or more gigs — and that kind of experimentation has proven to be a good thing. The highest earners by far are those who have tried five or more side hustles.

According to a new report from the Pew Research Center, most side hustles fall into the following categories:

  • Driving for a ride-hailing app
  • Shopping for/delivering groceries or household items
  • Performing household tasks such as cleaning a home, assembling furniture or running errands
  • Making deliveries from a restaurant or store for a delivery app
  • Using a personal vehicle to deliver packages to others via a mobile app or website such as Amazon Flex

Side Hustling Fueled — and Was Fueled By — the Great Resignation

The rise of the side hustle coincided perfectly with the Great Resignation — and it’s clear that each had a reciprocal effect on the other. The growing availability of legitimate part-time contract work — often remote and online — gave fed-up employees something to run to. On the other side of the coin, side hustles launched in 2020 started bearing fruit and delivering reliable second income streams, which gave people the confidence to finally walk away from their paychecks.

“In some ways, it has wiped the slate clean and generated a sense of freedom and opportunity to completely revitalize our livelihoods,” said Tina Hawk, senior vice president of HR at GoodHire. “The Great Resignation saw many professionals quit their jobs, often to switch gears completely or search for a role within a company with a healthier working culture. On the other hand, many took advantage of the chance to try monetizing a hobby or other side hustle.”

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With the mass exodus from the workplace still underway, it’s unclear whether the Great Resignation’s chicken came before the year of the side hustle’s egg — but it doesn’t really matter.

“Whether the gig economy helped drive the Great Resignation or vice versa, the past two years have encouraged many people to rethink where and how we work,” said Jared Pobre, co-founder of Caldera + Lab, a performance luxury skincare brand. “People are now searching for more meaningful ways of making money beyond the ingrained mentality of the morning commute to the office, in order to find more fulfillment in their lives.”

2021 Explosion Had Been Simmering for Decades

Although the pandemic was clearly the catalyst, the simultaneous rise of the gig economy and the Great Resignation was an eruption that had been building since the dawn of American cubicle culture.

“We saw it all over Instagram and TikTok,” said Emily King, founder of EJM Design, which created a whole lot of side-hustle websites this year. “People are done with putting in long hours for employers who would replace them without a second thought. The pandemic forced us to spend a lot of time alone, reflecting on our lives — and the flexibility, autonomy and excitement of entrepreneurship drove many to pursue it.”

For many, the pandemic lent a grim perspective to a longstanding sense of being unfulfilled in their work.

“People want to reclaim a sense of control, freedom and work/life balance that can only be assured if you are your own boss,” said Lilac Bar David, CEO and co-founder of Lili, a banking platform for freelancers. “Freelancing full-time is the best way to make sure you can control your own work/life balance.”

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Many, of course, haven’t turned their side hustles into their full-time thing — yet.

“I have personally taken my pandemic side hustle full-time,” King said. “While it’s not super common yet, I believe we’ll see much more of it in the next few years.”

As With Everything, a Lot of It Is Generational

While 2021 was certainly the year of the side hustle, different genders and generations pursued gig income for different reasons.

“Many workers aged 40-plus left the workforce due to sheer burnout,” David said. “They were tired of working the same job year after year if they weren’t passionate about what they were doing on a day-to-day basis. Younger generations like millennials and Gen Z are leaving because they have seen their friends and peers earning six-figure incomes freelancing on Fiverr or Upwork right out of school, skipping years of late nights, bad working environments and administrative work at significantly lower wages. Perhaps most significantly, 60% of our customers are women who jumped into freelancing to free themselves from toxic and unsafe workplaces that have presented challenges and glass ceilings for years.”

Wonolo, an on-demand staffing platform, recently released a report titled, “The State of the Gig Economy by Generation,” which uses data and trends not included in Bureau of Labor Statistics reports. It found that:

  • Baby Boomers and Gen Xers work the most gig jobs among all age groups.
  • Gen X earns the most income out of any generation.
  • Gen Z saw the sharpest increase in earnings from gig work, with an 11.4% increase in hourly earnings from 2019 to 2021.
  • More Gen Zers are getting into gig work. In 2019, that age group held only 8% of gig positions compared to 22% today.

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