Side Hustles and the Gig Economy Explained

There’s no question the landscape of work has changed dramatically over the last generation. What was once a bustling 40-hour workweek mentality has given way to the gig economy and side hustles with a work-from-anywhere philosophy.

So, what is this really all about? For the younger generations, think Millennials and Gen Z; this is becoming familiar ground. For GenXers, baby boomers and anyone in between, identifying this new way of working can be confusing. We’re here to help you unravel the terms.

Side Hustle

A side hustle is any work that you take on outside of your day-to-day job. It’s “on the side” and meant as a secondary source of income. For some, this could be turning a hobby into a few extra bucks. For others, a lucrative side business could turn into a full-time operation. For example, if you offer tutoring services to students, you might make $20/hr a few nights a week. They have created many ways to make extra money online. Or, you could earn several thousand per month running Facebook Ads for businesses. It’s not unusual today for people to have several side hustles instead of a full-time job or work at more than one job at a time. It’s the evolution of the modern workforce.  

Gig Economy

The gig economy refers to the entire labour market characterized by freelance work, on-demand online work and short-term contracts. It includes side hustles and also represents a new way to look at overall income. Statistics Canada reported in 2016 that the gig economy represented 8.2 percent of the workforce, increasing from 5.5 percent in 2005. A 2019 pre-pandemic study by Angus Reid estimated that 17 percent of Canadian workers are part of the gig economy, with more than 40 percent of millennials falling into this category over the past five years. Youth under 24 years of age are mainly involved in this type of work, with 58 percent turning to gig work over traditional jobs.    

Pandemic Influence

The global pandemic has given rise to the number of gig workers over the past 15 months, specifically those who lost jobs due to the slowing economy. Statistics Canada used tax and administrative data to report that in 2019, more than 25 percent of all workers earned 89 percent of their total annual income from gig work. Yet, the majority of gig workers did not earn more than five thousand dollars a year. The discrepancy shows how little we still know about this part of the economy and how these workers represent their income. Overall, the gig economy has been challenging to track because this workforce sector is relatively informal.

A Complex Equation

The gig economy is complex, and side hustles are a big part of the equation. For many students, a side hustle allows them to use skills and talents to provide products and services while managing their work and school hours. The temporary nature enables these workers to evolve and move with the times as they hone their skills. Other gig workers may rely on many side hustles to make up the bulk of their income or dabble in both contract work and side jobs. A freelance writer, for example, may work on-call delivering parcels when their schedule allows or when they need extra money. A graphic designer working on contract may sell their artwork on the side. The combinations are endless, but as with all income methods, there are pros and cons to working in the gig economy.

Pros and Cons

The upside is that gig workers have the freedom to work when they want and how they want. They are the masters of their domain and are not restricted to 9-5 corporate structures. On the downside, these workers typically do not receive job benefits, insurance coverage or unemployment protection. They must put money aside to pay income tax at the end of the year and are required to pay out of pocket for any medical expenses not covered under provincial plans. 

Want to learn more about flexible work?