Nowadays, there’s a prevailing narrative that money is everywhere if you know where to look. Start a consulting business. Teach an online course. Build an audience on social media. Turn your hobby into a side hustle. Package what you know and sell it. Side hustles build wealth, they say. The promise isn’t just financial security. It’s the possibility of building a comfortable, even luxurious, life on your own terms.
It’s an intoxicating idea. But I’m a little skeptical.
We all know that social media is built to amplify success stories. Algorithms show us the people who made it—or at least those who appear to have made it. And they reward visibility, making uncommon outcomes feel commonplace. Before long, it’s easy to think, “Everyone seems to be doing this. Why aren’t I?”
And yet, the appeal is undeniable. The idea of earning good money on your own schedule and doing work you genuinely enjoy, without being constrained by the rules of an employer, is incredibly attractive. It also feels like a potential solution to a real economic problem. If people can create income from their skills and interests, perhaps they’re less dependent on finding the right job—or any job at all.
That got me wondering: Who actually earns meaningful income outside of a traditional wage job? How many people are doing it? How much do they make? And where does that money come from? I decided to go to the data.
The Side Hustle Gold Rush
A few years ago, I watched a series of videos where a woman argued that each of us possesses a unique combination of knowledge, and that we’d be surprised how many people would pay to learn what we know. At the time, I was working as a data scientist at a large company, just as I am today. Her argument stuck with me.
Maybe I could package my own expertise into something people would find valuable. I sketched out ideas for courses, developed a few frameworks (I do love a good framework…you can get my framework for critical thinking with data here), and imagined what that business might look like. But that’s about as far as I got.
I wasn’t the only one thinking this way. Friends of mine—professional women with full-time careers—were experimenting with consulting, investing in real estate, or even pet sitting. My cousin, who’s in his twenties, earns a little money from people watching him play video games online. Everywhere I looked, people seemed to be building income streams outside their regular jobs. Some were side hustles. Others were becoming full-fledged businesses. Or at least that’s how it appeared.
The question I kept coming back to was whether this perception matched reality. If earning income outside a traditional job has become so common, and if it’s as accessible as social media often suggests, you might expect to see more people substantially increasing their wealth. After all, they’d no longer be limited by a wage ceiling for a job that it may be hard to find in the first place.
My own brief and unsuccessful attempt at building non-wage income suggested it wasn’t nearly that simple. So I began to wonder whether social media had distorted my perception. How many people are actually making meaningful money independent of a wage job? Let’s see what the data says.
Who Actually Makes Money Outside a Paycheck?
I used census data on income and employment from the ACS to dig into this. The first thing I realized was that “people making money outside a traditional job” isn’t one group. Someone driving for Uber on the weekends isn’t the same as someone who owns a law practice. Someone who earns a salary while consulting isn’t the same as someone whose entire income comes from running a daycare. So, I defined and grouped the different kinds of earners.
There’s the people who only earn income from a wage – this is the majority of people (~88% of earners), and we’ll call them Wage Only. Then there’s people who earn a wage, but have some additional self-employment income – Wage+Side Hustle (1.6%). People who label themselves as self-employed in the data, but who do have some wage income – Mixed Income (4.6%). And people who do not earn any income from wages and are labeled as self-employed in the data – Pure Self-Employed (5.2%). Automatically we see that just a small proportion of people make a living outside of having a wage job. Out of the approximately 11% of earners who are not strictly wage earners, here is the breakdown of the groups.
When we look at earnings distributions across the groups, this gets even more interesting. People who are purely self-employed have the lowest median income and the lowest ceiling on income of all the groups. This indicates that working purely for yourself, entrepreneurship, is not as lucrative as we would believe. The other predominately self-employed group, Mixed Income, has the second highest median income and income ceiling out of the four groups.
The income distributions suggest that combining wage work with another income source is generally more lucrative than relying exclusively on either one. But income isn’t the only thing separating these groups. The kinds of work people do differ across groups as well. Below we see the top occupations for segments outside of the wage-only earners.
One caution before we look at occupations. For everyone except the Pure Self-Employed group, the occupation listed in the Census isn’t necessarily their side hustle. It’s simply the occupation they reported as their primary work. Even with that caveat, some interesting patterns emerge.
The charts show the top 10 most common occupations listed by census respondents for each section, as well as their median incomes. Manager/Administrator is the top occupation across segments, yet we see that there’s a huge differential between income depending on the segment, with Wage+Hustle’s median being $73K higher than Pure Self-Employed, and $41K higher than Mixed Income. We see other occupations that go across segments, and yet the earning level just isn’t the same.
Another interesting finding from this data is that the jobs held by people in the Wage+Side Hustle segment differ significantly from those held by people whose primary occupation is independent work. You can see for Pure Self-Employment and Mixed Income, occupations that top the list include: Hairdressers and Cosmetologists, Housekeepers, Real Estate Sales, Truck Drivers, Farmers, Gardeners and Groundskeepers, and Child Care Workers. This difference in the types of jobs seem to point to something significantly relevant to the questions we’re trying to investigate.
Not All Entrepreneurship Is the Same
The purely self-employed segment appears to be small business owners. They’re the people in our communities who have a small lawn-care business, or do hair, or have small daycares. Their earnings are the lowest out of all the segments because it’s hard to maintain a small business – which is why so many don’t last. This segment seems to bust the myth of people fully supporting themselves and luxuriating on non-wage labor by opening a business and working for themselves. The occupations dominating this group are largely local service businesses—hairdressers, childcare workers, landscapers, truck drivers. These are essential jobs, but they’re also businesses that often have low margins and limited scalability. That may help explain why this segment has the lowest earnings.
One interpretation of the people who fall into the Mixed Income segment is that they are people who worked in a corporate environment for a wage at some point, or obtained a high-skilled credential, and decided to start using their skills primarily on their own terms. We notice that lawyer is one of the top occupations in this group. These are people who most likely decided to open their own firm or sell their own services instead of joining an existing one. This group contains executives, supervisors, analysts – all of these being business-oriented skillsets probably earned in a wage environment and then leveraged for self-employment. This segment could exemplify successfully transitioning into non-wage labor, since their primary status, although they earn wages, is self-employed.
The Wage+Side Hustle segment is probably the group that most resonates with my experience. It’s all those professional friends I mentioned who were looking for alternate ways to earn money. These are the people who leverage their skills and interests to bring in something a little extra. It’s the person in education who tutors, or provides consulting for college admissions. The public health worker who provides training and gives talks on pressing issues. It’s the tech workers who also do a little freelance, or who educate others on how to get into the field.
The Wage+Side Hustle segment may very well be the highest earning segment because the type of people who choose to occupy this space already have high-demand skills, and the wherewithal to take the time to leverage them outside of their 9 to 5. I imagine these are the types of people we mainly see on social media.
Can You Out-Hustle Access
Looking at these groups together, I don’t think the story is really about entrepreneurship. I think it’s about access. The people earning the most outside traditional employment don’t appear to be starting from the same place as everyone else. They already possess things that make earning outside a paycheck easier: specialized skills, professional experience, credentials, and the kinds of networks that help turn expertise into income.
Access compounds. People who already have valuable skills, credentials, and professional opportunities are often better positioned to create even more opportunities for themselves. Which is why the Wage+Side Hustle segment’s earning potential is miles ahead of the other groups, particularly the purely self-employed. By contrast, the occupations dominating the Pure Self-Employed group tend to be local service businesses. These are jobs that are difficult to scale, often depend on local demand, and may leave less room to dramatically increase earnings.
The education data makes this pattern even clearer. The chart above shows that over 60% of the people in the Wage+Side Hustle group have a Bachelor’s degree or higher. Compare this to all the other segments, where 50%+ of people in those groups have less than a Bachelor’s degree. People in the Purely Self-Employed group have the lowest rate of education attainment, which meshes with my hypothesis about who occupies this group and what kind of access they have.
If you read my previous essay on the value of a college education, these outcomes make perfect sense. More education means more pay, more exposure, bigger networks. These numbers show that doing your own thing can be lucrative, but generally only if certain seeds have already been planted. Thus, there is definitely space to make money outside of a typical nine to five. But the real earners in that space are people with higher education who have probably already put in time in professional environments. The narrative gets fuzzy because we’ve collapsed very different kinds of work into one story about entrepreneurship. We see from the data that hustle alone generally won’t cut it.
What the Data Can’t Tell Us
One question still lingers: what about people making money directly from social media? That’s what sparked this project in the first place. Unfortunately, the Census doesn’t capture that kind of income in a way that lets us isolate creators, influencers, or digital entrepreneurs.
In fact, upon researching this project, I learned that census data is probably not the best place to source information about non-traditional work and incomes. This kind of income is self-reported in the census and tends to under-report (Hurst, Li, Pugsley). Income data generated from physical processes, like bank transactions, or from IRS reporting, which is legally mandatory, would probably paint a more accurate picture. This is a strong reminder that we must always understand where our data comes from and how it was generated.
This does not mean that this analysis is useless. I think it still gives a nod to just how much the country still relies heavily on wage income. And I believe that it puts in perspective who is actually able to make non-wage income really work for them. The people who seem to benefit most from non-wage income is a small proportion of educated people who aren’t replacing traditional careers. They’re often building on them. Social media makes entrepreneurship look universal. The data suggests it’s much more selective.
Maybe the real lesson isn’t that side hustles don’t work. It’s that opportunity compounds. The people who succeed outside traditional employment are often building on education, professional experience, and skills they developed inside it. The internet may have changed how people earn money, but it hasn’t changed the uneven distribution of opportunity.
Sources
US Census ACS Data. https://usa.ipums.org/usa/index.shtml
Are Household Surveys Like Tax Forms? Evidence from Income Underreporting of the Self-Employed. Erik Hurst, Geng Li, and Benjamin Pugsley (2014, American Economic Review)
