Rise in Multiple Job Holders
The constant presence of high inflation is pushing more Americans to take on a side hustle as the cost of everyday necessities continues to rise. According to the Labor Department, nearly 8.13 million people held multiple jobs in January, up from 7.87 million a year ago. This represents about 5.1% of the total U.S. workforce, an increase from 5% just one year ago.
Impact of Stubbornly High Inflation
The growing likelihood of Americans holding more than one job comes as they continue to confront stubbornly high inflation that has rapidly eroded their purchasing power. In December, the government reported that the average hourly earnings for all employees declined by 2.89% from the figure in January 2021, shortly before the inflation crisis began. This means that the typical U.S. worker is worse off today than two years ago, despite nominal wages rising at the fastest pace in years.
Financial Pressures on U.S. Households
Inflation has created severe financial pressures for most U.S. households, particularly low-income Americans who bear a disproportionate burden. The rising prices of everyday necessities like food and rent are squeezing already-stretched paychecks. Moody’s Analytics estimates that Americans are now spending about $650 more per month than they did two years ago.
High Prices and the Cost of Necessities
While inflation has fallen from its peak in June 2022, it remains well above the Federal Reserve’s 2% goal. Compared to January 2021, prices have surged by a staggering 17.6%. The cost of necessities like food, gasoline, rent, and child care has skyrocketed. Food prices are up 33.7%, shelter costs have risen by 18.7%, and energy prices have increased by 32.8%.
Impact on Savings and Credit Card Dependency
As Americans spend more on everyday goods, they are depleting their savings and increasingly relying on credit cards to cover basic expenses. The combination of high inflation and rising costs has put significant financial strain on households across the country.
Federal Reserve Chair Jerome Powell acknowledged the impact of high prices, stating that basic necessities like bread, milk, eggs, and meats have substantially higher prices than before the pandemic.
In conclusion, high inflation is driving Americans to seek additional income through side hustles, as the cost of everyday necessities continues to rise. The burden falls heavily on low-income Americans, who are experiencing a significant decrease in their purchasing power. With prices soaring and savings dwindling, many are turning to credit cards to make ends meet. The challenge of high inflation remains a pressing issue for the U.S. economy.
