Side Hustle and Self-Employment Are Growing

COVID-19 has changed every health facility in the US, including the one where Michopoulos worked. Protocols were restructured every day, and telehealth suddenly became a thing. A few months into the pandemic, new business applications soared. Alongside, side hustles are growing. It has already allowed millions of Americans like Michopoulos to work on their phase and generate extra income.

Alexis Michopoulus is a US-based doctor who dreamed of having her own private clinic. No matter where she worked, whether at a primary care center, an urgent care clinic, or a community health center, she was forced to attend to patients every 15 minutes or so. That’s why she couldn’t develop a real relationship with her patients. The clearcut solution was to start her own practice, but she kept putting it off for several reasons. 

With the surprising increase in business, new applications spiked to record highs, soaring as much as 89 percent above 2019 data. And those numbers don’t even count those Americans who have pursued side hustles while keeping their full-time jobs. On Etsy, sales surged by almost 25 percent in 2021. Meanwhile, registrations on the freelancing platform Fiverr grew twice during the past two years. 

“The numbers are remarkable. People see increasing market opportunities, given the new normal we’re headed to.” – Professor John Haltiwanger, University of Maryland. 

Since side hustles are growing, it has also contributed to an era of mass resignations and forced employers to extend more benefits to existing full-time workers. And if the business explosion continues, it could give America a much-needed jolt of dynamism. Haltiwanger said that job creation would be robust and there would be lots of innovation.

From Stagnation To Explosion

Most Americans don’t pursue self-employment, and most businesses have been around for many years. However, there’s a reason economists like Haltiwanger worry about entrepreneurship. It’s vital for the health of the economy in the long run. New businesses create an inequality in the share of new jobs because they hire people with less experience and fewer credentials. But they drive innovation by trying new things. Moreover, they encourage more competition in the marketplace, reducing prices for consumers.

Before the pandemic, America’s startup rate had been a downtrend for many years. In 1984, the rate was recorded at 13.1 percent. By 2006, it went down to 10.1 percent, and in 2019 it was only 8.2 percent. Surprisingly, the pandemic awakened the country from its entrepreneurial inactivity.

At the same time, the number of citizens registering for an employer-identification number skyrocketed. In March 2022, applications for EINs were higher than 40 percent compared with the monthly average in 2019. And that statistic most likely misses the rise inside hustlers, who often don’t apply for EINs. Statistics show there are now at least 3.7 percent more self-employed Americans than before the pandemic.

Will Side Hustle and Self-Employment Explosion Last? 

The big challenge now is how long the entrepreneurial boom will last. Will it weaken once life returns to something close to normality? Or will we consider the pandemic as a turning point for the economy?

At least, the boom in self-employment and side hustles proves that it was wrong to give up on American entrepreneurship that weakened over the past few decades. 

“One of the essential lessons to learn from the pandemic is that there is a lot of motivation for people to go independent,” economist Adam Ozimek told the Business Insider. He also said that it is a matter of the conditions fit for people to start businesses.