The side hustle trap, and the rise of the ‘Four-Income Household’

Bankrate chart. Click to read at

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 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 Elizabeth Warren became a nationally famous 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 middle0-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 NOT happen: 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.   I wrote about this a couple of years ago:

The rise of the two-income family is one of the most dramatic social changes of the past century. From 1960-2010, the share of American households supported by dual earners rose from 25% to 60%, according to Pew. But there’s another massive social change under way that might be impacting our lives even more dramatically, and at a faster rate: We’re going to name it here for the first time: The Four-Income Family

Today, many families can’t afford housing near good schools unless both parents work. For them, it’s the cost of doing business, or wanting to have a family.

I worry this is changing again.  Side hustles are becoming, to use today’s overused word, normalized. Hey, who doesn’t like “hustle?” America is becoming the land of small-entrepreneurs. Now, there’s millions of them!  It’s great.  But is it, really?  Imagine competing for purchase of a house with a family that has four incomes to throw at the mortgage. You are your spouse only have two. That’s going to end badly for you. The Two Income Trap has become the Four Income Trap. Also, think about:

The Four Income Household raises all sorts of other issues…  Young families are already overwhelmed with child care costs; how will parents keep their kids safe while doing their side hustle? Is it ok for parents to take their kids along when they drive for Uber? (No, it’s not, but of course that doesn’t stop them from trying.)  What about taxes?  Self-employment taxes, which often apply to side hustle jobs, can be deadly for the uninitiated.  What about other, hidden risks, like added liability for drivers or Airbnb “landlords?”  Many sharing economy workers are underinsured, and assume far more risk than they realize.

America is right now racing recklessly towards an economic structure that requires adults to have a full-time job for health insurance, credit, and stability, and a part-time job to pay for the rest of their lives.  Left unchecked, the shift to a Four Income Household is not going to end well.

The Bankrate survey ads a bit more fuel to my anxiety fire.  It found that “forty percent of millennial side hustlers say they earn at least half of their income from side jobs, compared to 22% of Gen Xers and nine percent of Baby Boomers.”

In other words, the Four-Income Household is a young person’s game. Of course it is. Who else can manage to work that many hours?  If the word “unsustainable” isn’t leaping into your mind, you aren’t paying attention. Meanwhile, 50-somethings need housing, too. Should they really be driving Ubers a night to pay the rent?


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About Bob Sullivan 1637 Articles
BOB SULLIVAN is a veteran journalist and the author of four books, including the 2008 New York Times Best-Seller, Gotcha Capitalism, and the 2010 New York Times Best Seller, Stop Getting Ripped Off! His latest, The Plateau Effect, was published in 2013, and as a paperback, called Getting Unstuck in 2014. He has won the Society of Professional Journalists prestigious Public Service award, a Peabody award, and The Consumer Federation of America Betty Furness award, and been given Consumer Action’s Consumer Excellence Award.


  1. Point One: I think standards of living are higher now than in the 50’s and 60’s. More people take cruises and luxury vacations than ever before. More people own high end luxury cars than ever before. Now, it is true, that many people are deep in debt doing these things, but that is a different problem.

    Point Two: If you are going to have a side hustle, have one that has the potential to make a significant amount of money. Ride sharing, grocery delivery, and things like that do not have any potential. They are “work for hire” side hustles.

    Point three: Side hustles are nothing new. Avon, Amway, Herbalife, Mary Kay and hundreds of other direct sales companies have been around for decades. Many people have made a lot of money in direct sales side hustles dating back to the 1930’s.

    • Hi Mike,

      I must say that I disagree with your broad generalization. My husband has an MBA, I have a BS and am working on an MS right now. Our only child just graduated from college as an undergrad. As Gen Xers, my husband and I have tried to do all the right things. We went to college, saved the best we can for retirement, don’t use credit cards, drive 7 and 8 year old Toyotas and if we’re lucky we get a long weekend at the coast (a three hour drive) a couple of times a year. I am a breast cancer survivor who, even with insurance, is still paying off treatment 4 years later. We don’t eat out very much. I work in higher ed, my husband just left higher ed to work for the federal government where there is at least better earning potential.

      And in order to help make ends meet, he also drives Uber once in a while and adjunct teaches a couple of times a year. Both of those side gigs are to help make ends meet, not to pay for luxuries. I would like to try and save enough through these extra jobs to get new siding on our almost 40 year old house (3 bedroom standard raised ranch) and new flooring that has seen a kid and a couple of elderly dogs over the course of it’s 25 year life. I guess if you want to call those luxuries you can. I would beg to differ.

      We are not deep in debt for any of these things, other than the Parent Plus loan we took out to help our child meet college expenses.

      Many of those side hustles you cite from earlier times were for one person (frequently the woman) who wasn’t working a “real” job to earn a little extra cash. Not in addition to a full-time job.

      Most of my colleagues and friends of the same age are in similar situations. Most of us are not living in the lap of luxury financed with plastic. The economy isn’t working for everyone and I fear as a country we are headed to over the financial cliff. The wage and income gap is widening.

      I am sure I can find sources and citations to support my thoughts.

      Warm regards.

  2. It’s hard to argue that the standard of living for many Americans today is higher than it was for many Americans in the 50s or 60s, but we have a really big Blind Men and the Elephant problem when it comes to understanding what the real state of American spending/debt/household income is. I hear a lot of people say people spend too much on vacations, etc., and that’s why they are in debt, but I rarely see anyone cite statistics on this. They usually cite anecdotes, like “people eat out too much.” The data on many of this items is pretty clear: Americans spend far less of their household budget on items like food and entertainment than they did a generation of two ago. They spend far, far more on housing. And more on healthcare. There’s plenty of places to find this data, but here are a couple of links

  3. This was an interesting article. While my knee jerk reaction was to say that there is nothing wrong with side hustles the reality is that they should be chosen carefully and they shouldn’t leave your family in the cold. For me, remote work has been instrumental in maximizing my ability to capitalize on income earning opportunities as well as giving my family the attention they deserve. Thanks for writing this article, Bob. I hope you don’t mind me referencing it one of my articles later on; it’s called my attention to the need for more constructive guidance on how to make earning additional income more realistic and practical.

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