Are side hustles really a way to escape the rat race, or just passion projects for a privileged few?

Is a “side hustle” really the only thing separating you from the life you desire? Listening to some influencers on social media could certainly have you thinking so.

Side hustles encompass a range of self-directed entrepreneurial activities undertaken while also working a job. For young people with limited access to capital, they’re the most accessible opportunity to engage in entrepreneurship.

Yet, we still know very little about who takes them on and why, and what kind of impact they have on working life in economies like Australia.

Our new report – Side Hustles - How Young People Are Redefining Work – presents the first wave of findings from an ongoing three-year, mixed-methods study that seeks to answer these questions.

In our first year of data collection, we surveyed 1,497 side hustlers aged 18-34 and interviewed a further 68. Our findings raise questions about the merits of entrepreneurship as a solution to youth unemployment or a pathway to financial freedom.

What makes a side hustle?

To be included in our project, a young person had to be employed, but also carrying out some form of entrepreneurship.

We defined entrepreneurship as self-directed economic activity, where the side hustler has some measure of control over when they work, who they work for and what they charge.

The most popular side hustle among participants was selling goods (42.9%). Others included:

• services such as gardening, dog-walking or moving furniture (29.2%)
• creating media content (16.5%)
• creative work such as graphic design or photography (11.3%).

Side hustling could include some “gig work” through online platforms, but only when these platforms allow workers to negotiate prices with clients and make choices about their work. As such, we excluded rideshare and food delivery drivers from the project.

Projects for the privileged

While some people may assume that young people start a side hustle out of financial stress, we found side hustlers are actually a relatively privileged cohort.

They are a well-educated group. Almost two-thirds of our sample had university degrees and many of the remainder were studying. They also generally report their financial wellbeing as comfortable.

Why is this? Side hustles often don’t make much money, cost money to set up, and carry risk – all of the hallmarks of entrepreneurship.

Median hourly earnings from their side hustles are less than what they would make working in retail or hospitality, and on average they are about 50% what they make in their main job.

As one e-commerce side-hustler put it:

If I really put my time and energy into the consideration, I would say we’re not making much money at all […] It’s just something I enjoy doing in my free time.

Their side-hustle earnings are also uncertain: 65% say they are unsure what their earnings will look like in three months.

In other words, you need to be financially secure already to even contemplate a side hustle.

Passion over pay

Side hustles don’t make enough to help someone who is really financially struggling, and they are unlikely to be a pathway out of the employment “rat race”.

Despite this, our participants are overwhelmingly satisfied with their side hustles and say they have good work-life balance. So what motivates them?

The top motivation reported in our study is passion and enjoyment. Side hustlers say they want work that relates to their interests and enjoy the autonomy and flexibility that a side hustle allows.

Even though side hustles are often less profitable than a second job, the second-highest motivation was still money.

That’s likely because they offer a way of making some supplementary income in a way that is flexible and autonomous.

They’re often a source of “play money”. One 33-year-old man with an e-commerce side hustle told us:

If I was to pick up a second job, like […] Uber driving at night time, I won’t be happy, I’ll be tired, I’ll be stressed out trying to do that

Whereas, I think because I’ve got the passion for it here, I’m happy to do it because, like I said, I’m doing it at my own pace.

Pressure to be productive

Our research suggests that rather than being a pathway out of unemployment, side hustles actually represent a broader social and economic trend: more and more of young people’s lives are being encompassed by work.

Interviewees frequently talked about feeling like they needed to make their time outside of work productive in some way. For some, it was as though they could not justify leisure time unless it was financially profitable.

One participant told us:

You obviously want to enjoy life and have a bit of a chill time, but some days you just go like, “What am I doing? Just sitting at home and just relaxing watching Netflix or whatever. I should probably be out there making more money”.

Blurring work life boundaries?

Most participants were also not very concerned about growing their side hustles into businesses.

Instead, they aspired for balanced working lives with a side hustle offering passion, flexibility and autonomous work, and paid employment supporting them financially and offering the option of a traditional career.

They also did not necessarily see the time spent on their side hustles as work, being much more personally invested and self-directed in their side hustles than in their paid jobs.

But this means that much of their “leisure” time looks very much like work, and more and more of their lives are dedicated to being productive.