Americans working more jobs amid persistently high inflation

US workers are increasingly taking on jobs with multiple employers as wage growth begins to cool and inflation remains stubbornly high.

The number of workers with at least two jobs has continued to inch higher following a collapse in April 2020 and is nearing pre-pandemic levels. As of September, 8.15 million people were recorded as working multiple jobs compared to a peak of 8.38 million in July 2019, according to data collected by the US Bureau of Labor Statistics.

The rise in multiple jobholders since the early pandemic crash has coincided with several key developments in the US economy: record inflation in 2022 that has yet to slow to policymakers' target levels; lower savings rates and an increase in household debt; a tight labor market characterized by demand for workers well above the number of people available to work; and growing concerns that while economic growth remains healthy, a long-awaited recession may be coming.

"This uptick in multiple full-time jobs is likely the result of several labor market factors — remote workers who are 'over-employed,' inflation nudging some workers to take on another job, and uncertainty driving workers to take on more work as a hedge against potential layoffs," said Mallory Vachon, senior economist at LaborIQ.

Multiple jobholders

Although those with dual employment account for just 5% of the total pool of workers, the gains made in recent months show a labor market returning to pre-pandemic norms, nudged along by new post-pandemic considerations.

Labor force participation recovered but remained below pre-pandemic levels in September at 62.8%, likely reflecting older workers' decision to permanently exit the labor force during the pandemic and a persisting reluctance to join the workforce among college-age Americans.

Of the total pool of workers with multiple jobs, a record 447,000 US workers held two full-time positions in September.

The rise in dual employment seems to run counter to the ongoing imbalance in the domestic labor market, where there are more job openings than job seekers. There were more than 1.4 job openings for every unemployed US worker in August, according to the latest government data.

"This remains somewhat of a puzzle to me, as I'm not sure whether this indicates more precarious conditions or just a normalization back to 2019 levels of multiple job holders," said Greg Daco, chief economist at EY-Parthenon.

"Cost fatigue," particularly among lower-income families, higher debt servicing burdens from the Federal Reserve’s 525 basis points of rate hikes since March 2022, and a slowdown in wage growth are all possibly pushing workers to take additional jobs, Daco said.

The possible motivations behind the increase in US workers with multiple jobs ultimately depend on one's view of the direction of the economy, said Oren Klachkin, a financial market economist with Nationwide.

"On the negative side, stubbornly elevated inflation and concerns about job loss if a recession materializes could be driving people to work more than one job," said Klachkin. "On the positive side, working more than one job could be a sign of a strong labor market and a robust economy. In other words, it could be a sign that a recession isn't imminent."

Household wealth

Declining household net worth due to high inflation also represents one possible reason Americans are seeking to work multiple jobs.

This is because real household net worth is not forecast to grow until 2025, according to an Oct. 24 forecast by S&P Global Market Intelligence.

Personal consumption expenditure prices, excluding food and energy, were up 3.7% in September on an annual basis. But evidence of slower consumer spending remained scant as Americans spent 0.7% more in September than the previous month, according to US Bureau of Economic Analysis data released Oct. 27.

Wage growth, however, is decelerating. Average hourly earnings for all private sector employees grew 4.2% year over year in September, down from nearly 6% growth in early 2022. Given this deceleration, dual employment may be seen as a viable solution for consumers looking to sustain their spending habits.

"Inflation has probably stretched the budgets of some households, particularly lower-income households, who have likely depleted most or all of the excess savings they may have accumulated early in the pandemic," said Nancy Vanden Houten, lead US economist with Oxford Economics.

Gender differences

The US civilian labor force totaled about 167.9 million people in September, including 78.6 million women and 89.3 million men, according to Bureau of Labor Statistics data.

Some 4.19 million women were recorded as working multiple jobs in September, compared to only 3.96 million men.

"Given growth in population and workforce participation, it's not surprising that there are more women working multiple jobs than in the past, although the numbers remain small," said Brad Hershbein, senior economist at the W.E. Upjohn Institute for Employment Research.