Board of Governors of the Federal Reserve System

Employment, Multiple Jobs, and Informal Work

A central component of each family's financial landscape is the extent to which individuals in the family are able to find employment and, among those who are employed, receive wage increases over time. Beyond wages, there are also other employment characteristics that impact the well-being of workers--including employee benefits and the consistency and predictability of work schedules. In order to monitor the relationship between employment and other aspects of individuals' financial lives, SHED respondents are asked to describe the characteristics of their main job along with a range of informal activities that they may engage in to earn additional income.

Overview of Employment

Recognizing that some individuals may view themselves as having multiple employment identities--such as being both a student and working--the survey provides respondents with a list of employment situations, which are shown in table 4, and asks them to select all that describe their experiences over the prior month. When doing so, 63 percent of respondents indicate that they were employed in the month prior to the survey. This includes 56 percent who were employed for someone else and 10 percent who were self-employed (3 percent of whom indicate that they were both employed for someone else and self-employed).¹³ However, while 37 percent of adults in the survey are not working, many of them are not working by choice--including most students, homemakers, and retirees.

Table 4. Do each of the following describe your employment situation in the past month?

Percent

Not all adults consider themselves fitting into just one employment situation, with 29 percent selecting multiple responses to this question. This, in part, reflects overlapping situations such as retirees or students who also report that they were not employed and not looking for work in the previous month. This percentage, however, also includes respondents with multiple, distinct employment categories during the month. For example, just over half of those who say that they were a student also indicate that they were employed in some capacity, and 13 percent of those who were retired also indicate that they were employed in some capacity.

In addition to capturing the current employment status of respondents, the survey explores individuals' experiences in, and perceptions of, the labor market. This includes raises that workers received as well as their willingness to ask for a raise, apply for new jobs, or voluntarily leave a job--each of which can be a sign of confidence of their position in the labor market. Sixteen percent of employed workers indicate that they asked for a raise at work in the 12 months prior to the survey (table 5). Just under two-thirds of those who asked for a raise report that they received one, which compares to 42 percent of employed workers who did not ask for a raise but still received one. Overall, 46 percent of employed respondents received a raise in the previous year.

Table 5. In the past 12 months, have you done each of the following?

There is also variability in the magnitude of the salary increase among those who received a raise. Five percent of all workers (12 percent of those receiving a raise) indicate that they received a raise that exceeded the change in their living expenses, whereas 19 percent of workers (42 percent of those receiving a raise) say that it fell short of rising expenses. Hence, nearly three-fourths of workers either did not receive a raise or received one that was less than the change in their expenses.¹⁴

Perhaps reflecting a more rapid improvement in the labor market and economic conditions for those with higher levels of education, there is evidence that those with greater levels of education were more likely to have received a raise and to have received one that exceeded the change in their expenses. Among employed respondents with a bachelor's degree or above, 48 percent received a raise and 8 percent received one that exceeded the change in their expenses. In contrast, among employed respondents with a high school degree or less, 38 percent received a raise and just 2 percent received one that exceeded the change in their expenses (figure 5).

Employment Conditions, Scheduling, and Benefits

Although wages are an important component of any job, there are a number of other factors that also contribute to the quality of employment, including schedule predictability and the employee benefits offered. Overall, three-fourths of workers normally work the same hours each day, and an additional 8 percent have a work schedule that varies but does so at their own request. The remaining 17 percent of workers say that their schedule varies based on their employer's needs.

The likelihood of having a variable schedule is not uniform across industries or across the skill levels of the workers. In particular, less-educated workers and those working in the retail/wholesale trade industries, food services, or entertainment industries are disproportionately likely to have variable schedules based on their employer's needs. Workers with a high school degree or less are more than twice as likely to have an employer who varies their schedule (24 percent) as workers with at least a bachelor's degree (11 percent). Similarly, 30 percent of wholesale or retail workers and 35 percent of food services or entertainment workers have variable schedules, which is well above the rate observed for the population as a whole.

Among workers whose employer varies their schedule, just over half say that they usually are told the hours that they will work three or fewer days in advance, with 37 percent reporting that their employer usually tells them their hours one day or less in advance, including on-call scheduling. This compares to 15 percent who are given at least two to four weeks of advance notice (figure 6).

Less-educated workers also appear to receive less advance notice about their work schedules. Sixty-four percent of variable-schedule workers with no education beyond high school receive their schedule three days in advance or less. This compares to 47 percent of those with some college or with a bachelor's degree who are given only this level of advanced notice.

An additional component of employment conditions explored in the SHED is the benefit package offered by employers. The most common employee benefits include paid vacation time and health insurance--each of which over three-fourths of workers indicate that their employer offers (table 6).¹⁵ Just over two-thirds report that their employer provides retirement benefits, and just under two-thirds are offered paid sick leave. Other benefits, including maternity or paternity leave, life insurance benefits, and disability insurance benefits, are less common but are still offered to over half of workers.¹⁶

Table 6. Employment benefits offered to workers (by employment status)

Percent

The frequency of being offered these benefits is, as expected, closely tied to the status of the worker, with full-time workers being substantially more likely to be offered nearly all forms of benefits than are part-time workers or contractors. For example, while 76 percent of full-time workers receive paid sick leave, a much lower 27 percent of part-time workers and 8 percent of contract workers receive this benefit. Full-time workers are similarly more likely to be offered other benefits, including health insurance coverage, retirement benefits, and parental leave. Contract workers, however, appear to have more flexibility with respect to where they work and their ability to work from home.

Multiple Jobs and Informal Work

Many workers still have a traditional employer-employee relationship, with a single job for one employer. However, some workers piece together incomes through a combination of multiple formal jobs, through informal income-generating activities, or through a combination of both. This section explores the prevalence and motivations for these choices.

Among people who were employed in the month before the survey--either for themselves or for someone else--the survey asks whether they had any additional jobs during that time. Nine percent of all adults, and 15 percent of those who are employed, report that they worked at multiple jobs. Perhaps counterintuitively, but also possibly reflecting greater opportunities, the frequency of holding multiple jobs is somewhat higher among those with higher levels of education. Six percent of adults with a high school degree or less report working multiple jobs, whereas 12 percent of those with at least a bachelor's degree report doing so.¹⁷

Taking on multiple jobs is not the only way in which individuals can supplement their income, as occasional income-generating activities are also important to the finances of some families. Three types of occasional activities are considered in the survey. The first--service activities that can be performed in person and thus do not require having a computer to complete the tasks--includes activities such as babysitting, child care, elder care services, house cleaning, or landscaping. The second--selling items through venues that do not require a computer--includes selling items at flea markets, garage sales, consignment stores, and thrift stores. Finally, the third category--activities requiring a computer and/or access to the Internet--includes performing tasks or services through online marketplaces, renting out property using online applications, or selling items online through services such as eBay or Craigslist.

Overall, 28 percent of all adults report that they or their family earned money through one or more of these informal and occasional activities in the prior month.¹⁸ Fifteen percent of adults earned money through service activities that do not require online access, and 15 percent earned income from tasks performed online. Sales activities that do not require online access are less frequent, with 8 percent of adults earning money through these activities in the month prior to the survey. Primarily because highly educated adults are more likely to engage in online activities, the overall likelihood of partaking in these informal market activities rises with the level of education (table 7).

Table 7. Informal income-generating activities (by education)

Percent

When considering the primary reason why people perform these income-generating activities, the vast majority do so in order to earn money (figure 7). Just over two-fifths say that they are doing so to earn additional money on top of that from their main job, and an additional 18 percent say that they are doing so as their primary source of income.

That said, while many individuals are performing additional activities primarily to earn money, it typically is not a substantial source of income. Over three-fourths of those performing occasional income-generating activities say that the money earned from these activities is 10 percent or less of their family's income, and 60 percent say that it makes up less than 5 percent of their income. Six percent of individuals conducting these activities say that it represents over half of their family's income.

Similarly, when asked to what extent the money earned from these activities represents a significant source of their family's income, one-third report that it was at least somewhat significant, which includes the 10 percent who say it was very significant.

However, while not a significant source of income for most families partaking in these activities, the additional income is somewhat more important for those with less education. Among adults with a high school education or less who engaged in these activities, 40 percent report that it represented a significant source of income for their families, including 14 percent for whom it was very significant (figure 8).

Additionally, this income has the potential to serve as an important buffer for some families experiencing financial stress. Among those who experienced a job loss or a decline in wages in their family and who engaged in these activities, 56 percent say that this occasional income was either somewhat or very important in offsetting the negative effects of unemployment, lost working hours, lost benefits, or frozen wages in a formal job.

Paid and Unpaid Work among Young Adults

A recent question among some income mobility experts is the extent to which the children of high-income parents are able to use their greater financial resources to access internships and apprenticeships that are unpaid but may have greater long-run career potential than the types of paid work that these young adults could obtain. There is evidence in the SHED that this may be the case.

Twelve percent of students in the survey who are ages 18 to 24 report that they participated in an unpaid internship in the year prior to the survey (table 8).¹⁹ While the sample size of these young adult students in the survey is limited, the likelihood of participating in such activities seems to differ based on one's parents' education. Among students with at least one parent who completed a bachelor's degree, 16 percent participated in an unpaid internship in the previous 12 months. This compares to 7 percent of students whose parents did not complete a bachelor's degree.

Table 8. Paid and unpaid experiences among students ages 18-24 (by parents' education)

Percent

This experience gap in favor of those from families with greater socioeconomic resources does not appear for other forms of employment. Students ages 18 to 24 from less-advantaged backgrounds are much more likely than those whose parents have higher levels of education to be working for someone else for pay while in school. Additionally, students from both types of family backgrounds are similarly likely to participate in informal income-generating activities or to engage in volunteer activities. The SHED cannot provide insight into the relative benefits of these different activities on future employment prospects. But to the extent that paid employment, informal activities, and unpaid internships provide different types of experiences, this could represent a source of distinction for students from divergent backgrounds.

 

References

 

 13. The employment-population ratio in the SHED is comparable to that reported by the Bureau of Labor Statistics (BLS). Looking at respondents age 20 and older in this survey, 63 percent report having a job of any kind. This compares to a 61.8 percent employment-population ratio reported by the BLS for this age group in December 2016 (see www.bls.gov/web/empsit/cpseea08a.htm). Return to text

 14. Living expenses may change due to changes in prices but also due to changes in individuals' purchase decisions. As such, this measure should not be interpreted to reflect the share of workers whose raise is not keeping up with the rate of inflation. Return to text

 15. The SHED asks respondents whether their employer offers each of these benefits, irrespective of whether they personally use the benefit. Return to text

 16. With the exception of disability insurance, the fraction of workers in the SHED being offered each benefit is broadly consistent with that reported by the BLS from the National Compensation Survey for those benefits in both surveys. However, the BLS observes that 38 percent of workers have access to short-term disability insurance, compared to the 58 percent in the SHED who say that they have access to any disability insurance. This may, in part, be due to the BLS surveying establishments, whereas the SHED interviews individual workers. Return to text

 17. Among employed adults, rather than all adults, 12 percent of those with a high school degree or less are working multiple jobs. This compares to 16 percent of employed adults with at least a bachelor's degree who are doing so. Return to text

 18. Among just working-age adults, 30 percent participated in at least one informal income-generating activity. Among those ages 65 or older, it is a lower 16 percent. Return to text

 19. There are two opportunities in the survey for respondents to report that they are a student--one when they are asked about their employment status in the previous month and one when they are asked if they are currently enrolled in school. In general, responses to these questions align, but individuals are included as students here if they respond "yes" to either of these questions. Return to text