Employment
In this survey, the majority of adults report working as much as they want, and half of employees received a raise or promotion during the prior year. Even with the strong labor market, some still face challenges in finding quality jobs. For example, variable work schedules, temporary contracts, and gig work activities as a main source of income are often associated with less financial security than are more traditional work arrangements.
Work and Well-Being
Two-thirds of adults report that they are working as much as they want—a sign that they are fully employed. One in 10 adults are not working and want to work, though many are not actively looking for work.5 Four percent of adults in the SHED are not working, want to work, and applied for a job in the prior 12 months. Two in 10 adults are working but say they want to work more hours.
Individuals in these latter two groups, who want to work more, have less education than those working as much as they want. Notably, after several years of economic expansion, 38 percent of adults with less than a bachelor's degree want more work, versus 23 percent of adults with a bachelor's degree.
Education is not the only gap. Within education levels, racial differences in having as much work as desired are also evident (figure 5). Half of blacks and Hispanics with a high school degree or less want more work, versus 3 in 10 whites with the same education. Moreover, blacks and Hispanics with a bachelor's degree or more are about as likely as whites with a high school degree or less to want more work.
Figure 5. Want to work more than currently (by education and race/ethnicity)
Work status affects individuals and their families in many ways. Those who want more work report lower levels of well-being than those who are satisfied with their working hours (table 7). For example, the group of adults who are not working and want to work is three and a half times as likely to report that they are not doing okay financially (51 percent) than the group that is working and does not want more work (14 percent).
But work is not enough to guarantee economic well-being. Those who are working and want to work more hours are worse off than those who are not working and do not want to work. In terms of self-assessed social status, those who are not fully employed are more likely to view themselves on the bottom half of a social ladder. They are also more likely to say that they are worse off than their parents were at the same age. It is worth noting, however, that even among those who want more work, the vast majority see themselves as better off or the same as their parents were.
Table 7. Self-assessment of well-being and social class (by work status)
Percent
| Form of employment | Not doing okay financially | Bottom half of social ladder |
Worse off than parents |
|---|---|---|---|
| Not working, want work | 51 | 60 | 27 |
| Working, want more work | 38 | 50 | 25 |
| Not working, don't want more work | 20 | 35 | 14 |
| Working, don't want more work | 14 | 26 | 17 |
Given the importance of work, it is also worth understanding why some adults, particularly in their prime years (ages 25 to 54), are not working. Despite a strong labor market, 24 percent of prime-age adults in 2018 report not working in the month prior to the survey, split about evenly between those who want to work and those who do not.
Over one-third of prime-age adults who are not working cite a health limitation as a reason, and nearly one-quarter say they could not find work (figure 6). Women not working in this age group are much more likely (42 percent) to cite child care or other family obligations as a reason than men (16 percent) are. Older adults (age 55 and older) are most likely to cite retirement as their reason for not working (80 percent), and younger adults (under age 25) are more likely to be out of the labor force because they are in school or training (60 percent).
Figure 6. Reasons for not working among ages 25–54
Note: Respondents can select multiple answers.
Wage Growth and Work Arrangements
Wage growth is a key feature of a strong labor market. In 2018, half of all employees received a raise or promotion in the prior year, but some groups are less likely to experience such gains.
Blacks were less likely to have received a raise in the prior year than whites were, regardless of educational attainment (figure 7). Hispanics with some college education or a bachelor's degree were less likely than either whites or blacks with similar education to have received a raise. However, among workers with a high school degree or less, Hispanics were the most likely to have seen their wages rise. Beyond education and race, employees living in low- and-moderate income neighborhoods were less likely to have received a raise (44 percent) than those living in more well-off communities (50 percent). The experiences were similar for those in urban (49 percent) and rural areas (48 percent).
Figure 7. Received a raise (by education and race/ethnicity)
Note: Among workers in the past month.
Temporary work contracts are often associated with lower economic well-being than are more stable work arrangements. The same is true for work schedules that vary with little advance notice. Among those working, 8 percent say that their main job—the one from which they receive the most income—was a temporary job. The self-employed are more likely to view their work as temporary, but some employees also work on short-term contracts.6
Work schedules are another source of unpredictability. One-quarter of employees have a varying work schedule, including 17 percent whose schedule varies based on their employer's needs. Of the latter group of people who do not set their schedule, one-third say they are not doing okay financially (figure 8), versus one-fifth of employees with stable schedules or varying schedules that they control.
Figure 8. Employees "just getting by" or "finding it difficult to get by" (by work schedule)
Workers with schedules that vary based on their employer's needs may report lower economic well-being because they receive short notice of when they will work. Among this group, nearly half are told when they will work three days or fewer in advance.
Those with less education are more likely to have these irregular schedules and receive short notice of when they will work. Of those with a high school degree or less, 22 percent had a job that varied by their employer's needs, compared to 11 percent of those with a bachelor's degree or higher. Workers with these types of irregular schedules are concentrated in certain industries. One-third of employees in the retail or accommodations (lodging and related services) sectors have a varying schedule set by their employer.
Gig Work and Informal Paid Activities
Informal, infrequent paid activities—referred to here as gig work—are another source of income for some adults. In this survey, gig work covers personal service activities, such as child care, house cleaning, or ride-sharing, as well as goods-related activities, such as selling goods online or renting out property (table 8).7 This definition of gig work includes both online and offline activities, underscoring the fact that most of these activities predate the internet. Many adults who engage in gig work use it to supplement their income, but some rely on it for their main source of income. Finally, these gig activities are often done occasionally and do not take much time, and thus may not fit neatly in a standard concept of what is considered to be "work."
Table 8. Share of adults with gig work
| Activities | Percent |
|---|---|
| Service activities | |
| Child care or elder care services | 5 |
| Dog walking, feeding pets, or housesitting | 3 |
| House cleaning, yard work, or other property maintenance work | 6 |
| Driving or ride-sharing, such as with Uber or Lyft | 3 |
| Paid tasks online | 2 |
| Other personal tasks, such as deliveries, running errands, or helping people move |
4 |
| Goods activities | |
| Sold goods yourself at flea markets or garage sales | 5 |
| Sold goods at consignment shops or thrift stores | 3 |
| Sold goods online, such as on eBay or Craigslist | 10 |
| Rented out property, such as your car or house | 4 |
| Other activities | |
| Any other paid activities not already mentioned | 2 |
Note: Respondents can select multiple answers.
Overall in 2018, 3 in 10 adults engaged in at least one of these gig activities in the month before the survey.8 Fifteen percent of people engaged in a service activity, and 17 percent engaged in a goods activity. Younger individuals are more likely to perform gig work: 37 percent of those ages 18 to 29 performed gig work, but 21 percent of those age 60 or older did so (table 9).
The relatively high prevalence rates of gig work in this survey likely reflect the broad set of activities covered. Some studies of gig work, instead, focus only on those who use a website or mobile app to connect with customers. Using this narrower definition, 3 percent of adults in this survey say that they participated in gig work enabled by these technologies.9
Table 9. Gig work (by age)
Percent
| Activities | 18–29 | 30–44 | 45–59 | 60+ |
|---|---|---|---|---|
| Service activities | 23 | 17 | 13 | 9 |
| Goods activities | 19 | 22 | 16 | 12 |
| Use website or mobile app to find customers |
5 | 4 | 2 | 1 |
| Any informal activities | 37 | 34 | 27 | 21 |
Note: Respondents can select multiple answers.
It is not clear that all individuals who participate in gig activities view those activities as the equivalent of traditional paid work. In fact, over one-quarter of those doing gig activities had reported earlier in the survey that they do not "work for pay or profit."10
Workers participate in the gig economy for a variety of reasons. To earn extra money is the most common reason that individuals engage in gig work (figure 9). When asked about their main reason for engaging in gig activities, less than two-fifths of gig workers (11 percent of adults overall) are doing gig activities to supplement their income. For nearly one-fifth of gig workers (5 percent of adults), this is their primary source of income. Nearly one-quarter of gig workers (7 percent of adults) say that selling items that they no longer need is their main reason for gig work.
Figure 9. Main reason for gig work
Note: Among gig workers in the past month.
For most gig workers, this activity is occasional rather continuous, and for many, this work generates only a modest share of family income. Thirty percent of gig workers indicate that they earned income from these activities in all or most months during the year.
Among gig workers who say how much time they spend on gig activities, the median number of hours worked in the prior month was five. For 55 percent of gig workers, these activities account for under 10 percent of their family income. Six percent of the gig workers rely on these activities for 90 percent or more of their family income. However, gig workers with less education are more likely to rely on gig work for a larger fraction of their income. For gig workers with a high school degree or less, 14 percent rely on gig work for at least half of their income, compared to 8 percent for those with a bachelor's degree or higher. The extent to which individuals rely on gig work for income is also associated with differences in their financial fragility (box 2).
Box 2. Financial Fragility and Gig Work
A decade after the Great Recession, financial fragility and economic insecurity remain concerns for many households.1 The adults engaged in gig activities are a segment of the population that may be experiencing heightened financial fragility.
Two measures of financial fragility are used here to examine gig workers: a) some difficulty handling a $400 unexpected expense and b) using alternative financial services, such as purchasing money orders or cashing a check at a place other than a bank. Adults doing gig work are slightly more likely to say they would borrow, sell something, or could not pay the $400 expense (42 percent) compared to those not doing gig work (38 percent). The use of alternative financial services is somewhat higher among gig workers (24 percent) relative to non-gig workers (16 percent).
The degree of financial fragility among gig workers varies considerably by the reasons for doing gig work. For those doing gig work as their primary source of income, 58 percent would have difficulty handling the unexpected expense, compared to 44 percent of those doing gig work to supplement their income (figure A). For adults doing gig work to sell items they no longer need, 36 percent would have difficulty with the unexpected expense—a lower fraction than those not doing gig work at all.
Figure A. Gig work and some difficulty handling an unexpected expense (by reasons for doing gig work)
Note: Respondents can select multiple reasons for gig work. "Some difficulty" is defined as borrow, sell something, or cannot pay.
The use of alternative financial services, due to their nature and cost compared to bank and credit union services, is also sometimes viewed as an indicator of financial fragility. Use of alternative financial services by gig adults also varies by the motives for gig work (figure B). Those doing gig work as a primary income source (33 percent) use alternative financial services and products to a greater degree than those supplementing their income (26 percent) or selling items they no longer need (19 percent).
Figure B. Gig work and use of alternative financial services (by reasons for doing gig work)
Note: Respondents can select multiple reasons for gig work.
Gig work—on its own—is not a uniform sign of financial fragility. Doing gig activities to earn money, in particular as a primary source of income, is associated with more fragility, but selling items that are no longer needed is associated with about the same fragility as non-gig workers.
1. Andrea Hasler, Annamaria Lusardi, and Noemi Oggero, Financial Fragility in the U.S.: Evidence and Implications (Washington: Global Financial Literacy Excellence Center, the George Washington University School of Business, November 2017), https://www.nefe.org/_images/research/Financial-Fragility/Financial-Fragility-Final-Report.pdf. Return to text
Return to text
References
5. This statistic includes individuals who have not looked for work recently and thus is not directly comparable to the 3.8 percent national unemployment rate in the fourth quarter of 2018 (or alternate measures of labor utilization) published by the Bureau of Labor Statistics. Return to text
6. The rates of temporary work in the SHED are higher than in some surveys. For example, the "Contingent Worker Supplement" from the Bureau of Labor Statistics in May 2017 found that 3.8 percent of all workers (including the self-employed) did not expect their current, main job to last. Return to text
7. The list of gig activities is similar to those in Anat Bracha and Mary Burke, "Informal Work in the United States: Evidence from Survey Responses," Current Policy Perspectives (Boston: Federal Reserve Bank of Boston, 2014), https://www.bostonfed.org/publications/current-policy-perspectives/2014/informal-work-in-the-united-states-evidence-from-survey-responses.aspx. For the further development of the gig questions now used in the SHED, see Barbara Robles and Marysol McGee, "Exploring Online and Offline Informal Work: Findings from the Enterprising and Informal Work Activities (EIWA) Survey," Finance and Economics Discussion series 2016-089 (Washington: Board of Governors, October 2016), https://www.federalreserve.gov/econresdata/feds/2016/files/2016089pap.pdf. Return to text
8. The overall prevalence of gig work in 2018 was 2 percentage points lower than in 2017, but changes in the question wording complicate year-over-year comparisons. That said, 9 percent of adults reported spending more time on these activities relative to last year and 10 percent reported spending less time, a sign of slightly less gig work. Return to text
9. As a comparison, the JPMorgan Chase Institute study The Online Platform Economy in 2018: Drivers, Workers, Sellers, and Lessors by Diana Farrell, Fiona Greig, and Amar Hamoudi (https://www.jpmorganchase.com/corporate/institute/report-ope-2018.htm) found that 1.6 percent of families had received income from an online platform in the first quarter of 2018. Similarly, the "Contingent Worker Supplement" from the Bureau of Labor Statistics found that 1.0 percent of workers in May 2017 engaged in electronically mediated work. Return to text
10. Other surveys have also encountered challenges in measuring the gig economy, likely due to differences in terms and concepts. See Katherine Abraham and Susan Houseman, "Making Ends Meet: The Role of Informal Work in Supplementing Americans' Income," Working Paper (December 2018). Return to text