New Reality Check: The Paycheck-to-Paycheck Report

High-Income Consumers Lead Surprising New Data on Side Hustles

March 2024

As U.S. consumers continue to feel the crunch of inflation, supplemental income has increasingly become a crucial part of their financial health. Yet, there is more to the supplemental income equation than financial distress, with ease of access and enjoyment also key reasons consumers engage in side hustles.

Despite signals of less financial distress, consumer engagement with supplemental income is common, and supplemental income is central to the financial health of nearly one-third of consumers
Top earners are the most likely to engage with side hustles, and more top earners earn active supplemental income than passive supplemental income.
3 in 10 consumers sold a used item in the 12 months, and resale channel engagement correlates with age more than with financial standing, suggesting that the used item market may remain a key tool for consumers.


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    Housing and gasoline are the current drivers of inflation, according to the Bureau of Labor Statistics’ Consumer Price Index. Although inflation has significantly dropped from its peak of 9.1% in July 2022 and now sits at 3.2% as of February 2024, consumers continue to make moves to adjust, and PYMNTS Intelligence data finds that side hustles are crucial for more consumers now than last year.1

    Yet, there is more to supplemental incomes than financial distress. Ease of access and enjoyment are also key reasons consumers engage in side hustles. The odds of having a side hustle correlate more with age than financial distress. Gen Z consumers are the most likely to receive any kind of side income. Even so, high-income earners are the most likely to say this income will be more important in 2024 than last year.

    These are just some of the findings detailed in this edition of “New Reality Check: The Paycheck-to-Paycheck Report, a PYMNTS Intelligence report. This edition, Tracking Consumer Use of Supplemental Income Sources, details the financial lifestyles of U.S. consumers and their engagement with active and passive sources of supplementary income. This edition draws on data from a survey of 4,203 U.S. consumers conducted from Feb. 7 to Feb. 12 and an analysis of other economic data.2, 3, 4



    What’s at Stake

    The reality remains that most U.S. consumers rely on their next paycheck to make ends meet. As of February 2024, 59% of consumers lived paycheck to paycheck, including 42% of those earning more than $100,000 per year. Overall, this represents a drop from 62% year over year. Still, as the historical data below shows, the share of paycheck-to-paycheck consumers has hovered in the high 50s to low 60s for quite some time.

    Despite relatively moderate inflation recently, prices are still rising. With necessary expenses such as energy and housing driving inflation, earning more income is a better solution than cutting back for many. Active income sources such as reselling items, carrying out informal tasks or making artisan products continue to be the most common types of supplemental income. Passive and aid incomes have also gone up in 2024.

    Interestingly, desperation is not the primary driver for earning supplemental income, for two reasons. First, age correlates more closely with having a side hustle than financial distress, with Gen Z leading the way. Second, though the shares of consumers in financial distress have dropped, supplemental income engagement has not, as we’ll soon explore.

    Key Findings

    30%

    of workers earning supplemental incomes say that losing it would have a highly negative impact on their financial stability.

    PYMNTS Intelligence has tracked paycheck-to-paycheck trends and inflation’s impact on consumers’ financial lifestyles for nearly four years. Our latest data reveals that the paycheck-to-paycheck rate has dropped roughly 3 percentage points from this time last year. The main reason for this drop is that fewer affluent consumers now live paycheck to paycheck.

    The share of consumers living paycheck to paycheck across low- and middle-income levels has remained relatively stable year to year. At the same time, the share of those earning more than $100,000 a year who do so has dropped to 42% from 48% last year. This fact, along with our other findings, suggests that high earners may add to their incomes with side hustles they enjoy or profits from investments. Some even break free of the paycheck-to-paycheck cycle.

    Despite signals of less financial distress, consumer engagement with side hustles is as common as in 2023. For one-third of these workers, it remains central to their financial health.

    As of February 2024, 22% of workers had a side job in the three months before the survey. Also, 18% received non-payroll supplemental income, shares virtually unchanged from last year. Some may assume the paycheck-to-paycheck life implies a higher chance of having a side job, however, data shows that those with issues paying bills are actually less likely to have side jobs this year than last, at 23% versus 29%.

    Data also shows that 30% of employed consumers earning supplemental income depend on this income, up from 25% last year. Despite the lower rate of side jobs, paycheck-to-paycheck consumers struggling to pay monthly bills are the most likely to depend on this income. More than half do — 53%, up nearly 40% from 38% one year ago.

    Despite these needs, ease of access and enjoyment are consumers’ top reasons for earning this income, even for half of those struggling financially.

    Top earners are the most likely to engage with side hustles. More top earners earn active than passive supplemental income.

    22%

    of high-income consumers received active supplemental incomes in the last three months.
    20%

    of high-income consumers received passive supplemental incomes in the last three months.

    With consumers across all incomes coping with the rising cost of living, it may not surprise that even high-income consumers seek ways to add to their incomes. The vigor with which they do may surprise, however: 26% of employees earning more than $100,000 per year report earning side job income in the three months before the survey. Twenty-three percent received other non-payroll supplemental income, leading all income levels.

    High-income consumers are also the most likely to receive funds from active sources. These include side hustles such as reselling items, carrying out informal tasks or making artisan products. Twenty-two percent reported recently earning income of this type. For comparison, 20% reported passive incomes, such as investments. That affluent consumers seem to lean on active options more suggests they may be drawn to these easy-to-access and sometimes fun ways to boost their paychecks. Of course, earning more income also makes these forms more accessible, as these consumers could buy better tools or have more to resell.

    Profits from investments are the top passive supplemental income source for high-income consumers. In the three months before the survey, 14% of high-income consumers received profits from an investment. Just 3.4% of low-income consumers did.

    The gap is much smaller for active sources of this income. Profits from selling used items top the list for high-income earners. Eleven percent received this type of income in the past three months, as did 8.2% of middle-income and 7.3% of low-income consumers. Consumers across the board value the financial cushion such income provides — and in the case of resale, that value can carry over for sellers and buyers.

    While 3 in 10 consumers sold a used item in the 12 months, 43% bought one. Trends suggest that buying used items may continue to normalize.

    47%

    of Gen Z consumers sold a used item in the 12 months.
    74%

    of Gen Z consumers bought a resale item in the 12 months.

    Selling used goods remains a popular and accessible side hustle for consumers to earn extra income. Thirty-one percent of all consumers report that they have sold a used item in the last 12 months. More than 4 in 10 have bought one item this year. Similar to how income levels correlate more with supplemental income engagement than financial lifestyle, age seems to be a clearer differentiator than financial standing for resale channel engagement. And the youngest consumers are most involved.

    Gen Z is the most likely to take part in both sides of the sale. Forty-seven percent have sold secondhand goods, and 74% have bought such items. When taking age out of the picture and looking only at paycheck-to-paycheck consumers struggling to pay bills, those shares drop to 37% selling and 49% buying such items.

    The modern consumer has many options for selling or buying used items, with online platforms significantly more popular than brick-and-mortar options. Overall, 73 million people are using digital channels to make money off of their assets. Sixty-seven percent of all consumers have resold their goods mostly or entirely online in the last 12 months. Meanwhile, 18% have resold their goods mostly or entirely through offline channels, and 15% do so equally across both. The rise of resale sites that make buying and selling easy and convenient likely drives this preference for digital channels. One, in particular, is becoming a leader in this space.

    Facebook Marketplace has become consumers’ preferred resale site, underscoring the importance of high visibility — and some resellers’ focus on ease of use.

    44%

    of resellers cite Facebook Marketplace as their preferred channel for selling secondhand items.

    As more consumers engage with online shopping and the ConnectedEconomy™, many resale platforms have emerged — but data shows that Facebook Marketplace is consumers’ preferred channel, with 44% of resellers primarily choosing to sell used items there in the last 12 months. Similar shares of resellers across income groups and generations prefer Facebook Marketplace, with one key exception: Gen Z consumers, who are not known for their trust in Meta, the site’s parent company. Just 29% of Gen Z primarily used Facebook Marketplace to resell items in the last year.

    The battle for second is complex. Approximately 1 in 5 consumers in all age groups have sold used items primarily via eBay in the last 12 months, with sellers of more items more likely to use the longstanding platform. Gen Z consumers, however, are as likely (if not more likely) to frequent Poshmark, OfferUp and Mercari. This indicates that they are willing to use multiple resale platforms to supplement their wages.

    Several factors set reseller marketplaces apart — and younger consumers are fine using multiple at once.

    What factors nudge consumers toward a specific marketplace? These consumers have the end goal in mind — a successful sale, and as such, reaching a wide customer base and ease of use are top factors. Overall, a similar share (54%) cite better visibility and an intuitive interface as drivers (not necessarily top drivers) of deciding where to list an item for sale. However, the top factor for 36% is a large user base or better visibility.

    Facebook and eBay are valued for their large user bases and high visibility by more users. In contrast, users of relative upstarts Poshmark and OfferUp are more likely to cite ease of use and intuitive user interface as the top factors in picking a resale platform.

    Generation Z resellers are the least likely to base their choice of resale platform on high visibility (24%) and are the most likely to name ease of use as king. However, keep in mind that Gen Z resellers tend to engage with multiple resale channels to earn money from used items, making a large user base less important than the need for an intuitive interface when listing on their resale site of choice.

    Gen Z consumers often hold lower-paying jobs and are the generation most likely to have side hustles.

    32%

    of Gen Z workers report having a side hustle and earning other supplementary income in the last three months.

    Gen Z employees are the most likely among all age groups to receive any type of supplemental income. After all, many are starting their careers and hold entry-level jobs with lower pay. Still, three-quarters of Gen Z also cite ease of access and enjoyment as reasons to actively earn this income.

    In the three months before the survey, 32% of Gen Z workers report having a side hustle and earning other supplementary income. Meanwhile, the shares of Gen Z consumers earning each income type are virtually evenly split, with financial aid and active incomes at 28% and passive incomes at 24%. Data also shows that the inflow of financial aid income has gone up significantly among Gen Z workers: just 18% received it last year. However, that share has hopped nearly 10 percentage points, indicating that Gen Z workers may increasingly rely on support from parents.

    Gen Z workers’ overall higher engagement with supplemental incomes holds for most activities and income sources. Gen Z is the generation most likely to receive profits for selling used items and from gambling winnings; 14% of this cohort received each in the three months before being surveyed. They are also more apt to earn funds from selling artisan products than other age groups.

    Still, Gen Z consumers are most likely to receive money from a friend or family member. One in five has received this aid in the past three months, further highlighting the importance of support from parents to their ongoing financial stability.

    Conclusion

    Fewer U.S. consumers live paycheck to paycheck this year than last, yet consumers are more likely to depend on side hustles in 2024. In particular, paycheck-to-paycheck consumers struggling to pay monthly bills are nearly 40% more likely to rely on these incomes, indicating further vulnerability to outside forces. However, income bracket and age correlate more with supplemental income earning than financial distress. Affluent consumers seem to value the financial cushion such income sources provide and even the process, as they rely on active incomes more than passive income sources.

    Consumers have many options when selling or buying used items and are most likely to engage with online platforms. The need for easy and convenient access to supplementary income via side hustles drives this choice for digital channels, especially among Gen Z consumers. Facebook Marketplace and eBay rank as the top resale channels, followed by Poshmark and OfferUp. Consumers are more apt to list on Facebook Marketplace and eBay because of the larger customer base and wider reach. Poshmark and OfferUp rank high for their ease of use. All in all, supplemental income, despite the name, is becoming a more important aspect of U.S. consumers’ finances.

    Methodology

    New Reality Check: The Paycheck-to-Paycheck Report: Tracking Consumer Use of Supplemental Income Sources, a PYMNTS Intelligence report, draws on insights from a survey of 4,203 U.S. consumers conducted from Feb. 7 to Feb. 12, as well as an analysis of other economic data. The Paycheck-to-Paycheck Series expands on data published by government agencies, such as the Federal Reserve and the Bureau of Labor Statistics. It provides a deep look into the core elements of American consumers’ financial wellness: income, savings, debt and spending choices. Our sample was balanced to match the U.S. adult population in a set of key demographic variables: 51% identified as female, 33% were college-educated and 38% earn incomes of more than $100,000 per year.


    Read the February/March 2024 “New Reality Check: The Paycheck-to-Paycheck Report” for more.


    1. [Author unknown. Consumer Price Index. U.S. Bureau of Labor Statistics. 2024. https://www.bls.gov/cpi/. Accessed March 2024.]
    2. [Author unknown. Consumer Credit – G.19. Board of Governors of the Federal Reserve System. 2024. https://www.federalreserve.gov/releases/g19/current/. Accessed March 2024.]
    3. [Author unknown. Current Employment Statistics – CES (National). U.S. Bureau of Labor Statistics. 2024. https://www.bls.gov/ces/. Accessed March 2024.]
    4. [Author unknown. Consumer Price Index Summary. U.S. Bureau of Labor Statistics. 2024. https://www.bls.gov/news.release/cpi.nr0.htm. Accessed March 2024.]

    About

    PYMNTS INTELLIGENCE

    PYMNTS Intelligence is a leading global data and analytics platform that uses proprietary data and methods to provide actionable insights on what’s now and what’s next in payments, commerce and the digital economy. Its team of data scientists include leading economists, econometricians, survey experts, financial analysts and marketing scientists with deep experience in the application of data to the issues that define the future of the digital transformation of the global economy. This multi-lingual team has conducted original data collection and analysis in more than three dozen global markets for some of the world’s leading publicly traded and privately held firms.

    The PYMNTS Intelligence team that produced this report:
    Scott Murray: SVP and Head of Analytics
    Marcos Muñiz: Senior Analyst
    Margot Suydam: Senior Writer


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