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More workers take second jobs to bridge income gap

Federal Reserve chair Janet Yellen told the House Financial Services Committee on Feb. 11, “For much of the workforce, real wages have been stagnant in recent years.’’Mary F. Calvert/Reuters

WASHINGTON — During the week, Jesse Brown, 34, works as a personal banker at a Wells Fargo & Co. branch in Vienna, Va. On weekends, he sells coffee machines and occasionally goes to farms to shear sheep.

‘‘Around here, the cost of living is pretty high,’’ said Brown, who shares a town house near Washington in Annandale, Va., with as many as three housemates. He also helps to support his 5-year-old daughter. He said he is ‘‘trying to make ends meet, and save for her as well.’’

Americans like Brown are holding multiple jobs to earn extra income in a still-erratic labor market, supplement wages that are essentially flat, or seek to get paid for time they spend on hobbies or interests anyway.


About 4.9 percent of working US adults have more than one job, with about half holding a full-time and a part-time position. The share of moonlighters has been steady since 2010, according to Bureau of Labor Statistics data, though down from 5.2 percent in 2008.

But the numbers may be higher than government statistics reflect because there have been fundamental changes in the labor market since the recession and recovery, said Bernard Baumohl, chief global economist at Economic Outlook Group in Princeton, N.J.

‘‘More people have actually entered and remained in the underground economy than we have seen before,’’ he said. Workers are trying to raise their income even as job growth is sluggish, he said. So while employed, they may also do handyman repairs, or tutor, or fix computers. Many of these are cash transactions and become part of the shadow economy.

While it’s impossible to track all moonlighters and their earnings, the money shows up in the economy when it is spent, he said, as seen in retail sales growth that is outpacing income gains. US real disposable personal income grew by 0.7 percent last year, while retail sales increased 4.2 percent. His estimates concur with academic studies, Baumohl said, which put the underground economy at as much as 10 percent of gross domestic product, or as much as $1.6 trillion.


More Americans are also turning to freelancing, said Sara Horowitz, executive director of the Freelancers Union. Membership in the New York-based advocacy group has more than tripled over the past six years to 234,208 this month.

Earnings per hour for private-sector workers have climbed 2 percent a year, on average, since 2011, compared with a 3.1 percent gain in 2007, the last year of the previous economic expansion.

Adjusted for inflation, they’ve barely grown at all.

‘‘Certainly for much of the workforce, real wages have been stagnant in recent years,’’ Federal Reserve chair Janet Yellen said Feb. 11 at a House Financial Services Committee hearing.

Retail workers often take second jobs when their primary employers limit hours to hold down costs, said Jonathan James, assistant professor of economics at California Polytechnic State University in San Luis Obispo.

Overtime laws generally mandate extra pay for hourly employees who work more than 40 hours a week.

James, who studied moonlighting in a 2012 report when at the Federal Reserve Bank of Cleveland, said research shows Americans also take second jobs to earn money doing something they already enjoy.

That was the case for Rohan Anand, 27, who increased his income by $2,000 over six months by turning his yoga passion into a part-time instructor position. Anand, a software business analyst for Navitaire, an Accenture subsidiary providing airline reservation and revenue management systems, usually teaches one class a weekend at CorePower Yoga studio in Minneapolis.


Others operate small businesses on the side.

Katie Olson, 30, is a communications manager at Minnesota Computers for Schools in Minneapolis. In her spare time, she and her fiancé, Clint McMahon, run MPLS/STP Clothing Co., which sells Minnesota-themed T-shirts.

‘‘It’s definitely for fun,’’ Olson said of their home-based business. ‘‘We don’t really take in a ton of money.’’

MPLS/STP Clothing uses Bigcommerce software company to sell its products. Bigcommerce, which helps set up online stores and process credit card payments, says that about a third of its clients log in between 6 p.m and 8 a.m.

E-commerce is an extra business for Bigcommerce’s customers, supplementing their regular full-time jobs, said Eddie Machaalani, chief executive the company, which is based in Austin, Texas, and Sydney.

‘‘More and more people are becoming entrepreneurs,’’ he said. ‘‘People are either creating a hobby business on the side, while they’re working, or their dream is to test something really quickly, without committing 100 percent.’’

Having a second source of income is a form of insurance, said Ford R. Myers, president of Haverford, Pa.-based Career Potential. Myers, who has been assisting job seekers since 1993, said he helps clients land full-time jobs and then encourages them to develop a sideline.

‘‘If something bad happens, you won’t be totally messed up,’’ he said. ‘‘Instead of being stuck if you lose your position, now you can have a second or a third stream of income.’’


That strategy worked for Renee Kwok, 36, who started teaching yoga when she was working as a graphics reporter at the Sun Sentinel in Fort Lauderdale, Fla., and picked up more classes after she lost her job at the paper in 2011. She also does some design assignments for extra income.

Women jobholders are nearly twice as likely as men to hold more than one part-time job, while men are more apt to work full time on the primary job and part time at the secondary job, said Steve Hipple, an economist at the Bureau of Labor Statistics in Washington. Teachers, policemen, and firefighters most often have multiple jobs, according to Hipple.

The government’s data may not reflect the true picture, said Freelancers Union’s Horowitz.

‘‘Would someone who sells on Etsy and rents their room on Airbnb and has a 20-hour-a-week gig be counted as having ‘multiple jobs’? It’s not clear,’’ she said. ‘‘The entire way we collect data on workers needs to adapt to the changing ways people work.’’

Etsy Inc. is a New York-based online marketplace for handmade and vintage goods that sold more than $1 billion in merchandise last year. Airbnb Inc. allows people to rent dwellings on a short-term basis as an alternative to using hotels.