Why Everyone Needs a Side Hustle in 2026

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The year 2026 is rapidly approaching, and with it comes a fundamental shift in how we think about work, career security, and financial independence. The traditional model of a single, stable job providing lifelong security is becoming more and more outdated by the second.

This report represents a collaboration between Half Baked, the daily newsletter that delivers startup ideas to over 100,000 entrepreneurs, and North, a leading financial technology company building innovative payment solutions. Together, we've identified a critical trend: the need for multiple income streams in an increasingly volatile economic landscape.

The data is compelling. In 2025, we witnessed 23,309 American businesses filing for bankruptcy, a 13.1% increase over the previous year, and more bankruptcies means more laid off workers and an even more competitive job market. Simultaneously, AI could displace an additional 6-7% of the US workforce according to Goldman Sachs Research. So it follows that the global gig economy is projected to reach $2.15 trillion by 2033, growing at 16.18% annually [1][2][3].

More than 36% of US adults now have side hustles, earning an average of $891 per month. This isn't just about making extra money - it's about building resilience and creating the financial security that traditional employment can no longer guarantee [4].

The year 2025 has proven to be a watershed moment in employment history. What we're witnessing isn't merely a cyclical downturn - it's a fundamental restructuring of how work operates. The World Economic Forum's Future of Jobs Report 2025 reveals that 86% of companies cite AI advancements as primary drivers of change, while 58% point to robotics and automation as major disruptive forces [5].

The speed of transformation has caught many off guard. Unlike previous technological revolutions that unfolded over decades, the current wave is compressing what might have been a 20-year transition into just 5 years. This acceleration means workers have less time to adapt, retrain, or find alternative arrangements before their roles are significantly altered or eliminated.

What makes this shift particularly challenging is its breadth. Previous disruptions typically affected specific industries, allowing workers to migrate to unaffected sectors. Today's transformation touches virtually every industry simultaneously, from healthcare to finance, manufacturing to creative services.

The numbers tell a stark story of corporate restructuring. According to comprehensive data from Layoffs.fyi and TechCrunch, the technology sector alone has seen massive workforce reductions throughout 2025. Major companies that were hiring aggressively just two years ago have reversed course dramatically [6].

The bankruptcy statistics provide additional context. With 23,309 American businesses filing for bankruptcy in the 12-month period ending March 31, 2025, the job market is losing employers at an alarming rate. Notable corporate bankruptcies include major retailers like Rite Aid, affecting thousands of employees across hundreds of locations.

What's particularly concerning is the strategic nature of these layoffs. Unlike recession-driven cuts that companies typically reverse when conditions improve, many current workforce reductions may be permanent structural changes. Companies are using this period to accelerate automation adoption, meaning even when business improves, many jobs won't return.

The demographic impact reveals troubling patterns. Goldman Sachs Research found that unemployment among 20 to 30 year-olds in tech-exposed occupations has risen by almost 3 percentage points since early 2025, precisely the workers who were counting on technology careers for long-term security [7].

Artificial intelligence is no longer a distant possibility, it's reshaping employment today. Goldman Sachs Research estimates that generative AI could displace 6-7% of the US workforce in the coming years, representing approximately 10-12 million American workers whose jobs could be eliminated or fundamentally transformed [8].

What makes this transformation particularly challenging is its scope. Unlike previous automation waves that primarily affected manufacturing, AI targets cognitive work previously considered safe. Computer programmers, accountants, customer service representatives, and administrative assistants are among the most vulnerable positions. Not even the arts are safe, with creative fields like art, music and (gulp) writers all coming under threat from advanced AI systems.

The statistics from software development are telling. GitHub hosts over 420 million repositories, creating a massive training dataset for AI systems like GitHub Copilot. Three-quarters of developers now use AI assistants, and while this improves productivity, it also reduces the number of developers needed for many projects [9].

Customer support represents another sector ripe for AI automation. IBM's analysis shows AI systems can use call, email, and ticket data to enhance responses and cut costs by 23.5%. This isn't just efficiency improvement - it's human worker replacement [10].

However, the impact isn't uniform. Healthcare's AI adoption lags due to data scarcity and regulatory constraints, with less than 10% of surgical datasets publicly accessible due to HIPAA regulations. Similarly, construction might be the most AI-proof sector because the industry barely maintains digital records, making it difficult for AI systems to learn effectively [11].

The corporate landscape of 2025 is characterized by unprecedented instability. McKinsey's Global Survey reveals that trade policy changes have become the most-cited risk to global growth, tied with geopolitical instability. This represents a dramatic shift from previous years when inflation dominated concerns [12].

Trade policy ranks first as a risk among respondents in Asia-Pacific, Europe, Greater China, and North America. When asked about US trade policy shifts specifically, 65% of companies report making business changes as a result. In Greater China, 94% of companies report making adjustments due to trade policy shifts [13].

Supply chain disruptions have resurged as a major concern, with 22% of executives citing them as primary risks - the highest level since December 2022. These disruptions force companies to constantly reevaluate operations, often leading to facility closures, workforce reductions, or sudden business focus shifts [14].

The "uncertainty tax" that policy volatility imposes on business growth is becoming increasingly evident. Companies are delaying investments, postponing hiring decisions, and maintaining smaller workforces as buffers against unpredictable policy changes.

The fundamental shift in the job market has created a paradox: at the moment when career success requires more strategic thinking than ever, employees have less control over their trajectories than at any point in recent history. Traditional career development built on predictable models has largely collapsed.

Workers can invest years developing expertise only to discover their skills have been rendered obsolete by technological advancement. The World Economic Forum estimates that 39% of worker skills will become outdated by 2030, making long-term career planning nearly impossible in many fields [15].

Corporate restructuring has further eroded career control. Flattening organizational hierarchies means fewer promotion opportunities, while elimination of middle management removes stepping stones workers previously used for advancement. Even high-performing employees may find upward mobility blocked by structural changes rather than personal capabilities.

The traditional employment model has created what economists recognize as the "salary dependency trap" - a situation where workers become so reliant on their primary income that they lose flexibility needed to navigate volatile job markets. This dependency operates on multiple levels beyond just cash flow.

Federal Reserve surveys reveal that approximately 40% of Americans would struggle to cover a $400 emergency expense without borrowing money. This statistic reflects not just low savings rates but fundamental lack of financial flexibility that makes workers extremely vulnerable to income disruption [16].

The lifestyle inflation that accompanies career progression exacerbates salary dependency. As workers earn more, they tend to increase fixed expenses proportionally, maintaining the same vulnerability despite higher incomes. A worker earning $100,000 may be as financially vulnerable as someone earning $50,000 if expenses have scaled accordingly.

The benefits structure of traditional employment contributes to dependency by creating additional ties binding workers to employers. Health insurance, retirement contributions, and stock options create financial incentives to maintain employment even when job satisfaction or prospects are poor.

In the face of unprecedented job market volatility, side hustles have emerged as one of the most effective hedging strategies available. Like financial hedging instruments that protect investors against market downturns, side hustles provide workers with protection against career disruptions while offering upside potential.

The data on side hustle adoption reflects workers' growing recognition of this hedging value. With 36% of US adults maintaining side hustles and earning an average of $891 monthly, millions have begun implementing this risk management strategy. The fact that 45% of side hustlers come from households earning over $100,000 demonstrates this isn't about desperation - it's strategic risk management [17].

Generational differences reveal changing attitudes toward career risk. Nearly half of the Gen Z (48%) cohort has side hustles, compared to 23% of baby boomers. This pattern suggests younger workers, having witnessed job market disruptions, view income diversification as essential rather than optional [18].

The psychological benefits are as important as financial ones. Workers with alternative income sources report higher confidence and job satisfaction, even in primary employment. This confidence comes from having options and not being entirely dependent on employer decisions.

The decision to start a side hustle represents more than financial strategy, it's a fundamental shift in approaching work, risk, and personal agency in an uncertain economic landscape. The financial case is compelling: side hustlers earning an average of $891 monthly in 2024, up from $810 in 2023, represents meaningful financial resources for most families [19].

The risk mitigation benefits cannot be overstated. In a job market that’s changing so rapidly, it pays off to hedge your financial wellbeing by building a side hustle. Side hustles provide financial buffers that ease transitions between jobs or even replace primary employment if necessary.

Skills development through side hustles offers benefits extending beyond immediate income. Operating a side hustle requires entrepreneurial thinking, customer service skills, marketing knowledge, and financial management - capabilities valuable in any career context and often making workers more attractive to employers.

The networking opportunities created by side hustles often prove as valuable as income generated. Side hustle operators interact with customers, suppliers, and business owners in ways traditional employees rarely experience, leading to new opportunities and valuable partnerships.

The side hustle landscape has expanded dramatically, driven by technological advancement and changing consumer behaviors. Understanding different categories helps identify opportunities aligning with skills, interests, and available time.

Service-Based Side Hustles represent the most accessible category. These leverage existing skills without requiring significant upfront investment. Consulting, freelancing, virtual assistance, and professional services can often be started immediately with minimal capital requirements.

Product-Based Side Hustles involve creating, sourcing, or reselling physical or digital products. E-commerce platforms like Amazon, eBay, and Etsy have eliminated many barriers previously making product sales difficult. Digital products offer particularly attractive opportunities because they can be created once and sold repeatedly.

Technology-Enabled Side Hustles leverage digital platforms connecting service providers with customers. Rideshare driving, food delivery, and home-sharing through Airbnb provide flexible earning opportunities with minimal barriers to entry.

Creative Side Hustles allow monetization of artistic talents. Content creation through YouTube, TikTok, and Instagram enables creators to build audiences and monetize through advertising and sponsorships. Photography, writing, and design services serve growing demand for quality content.

Current market research reveals several high-growth opportunities:

Fastest Growing:

Professional Services: Consulting in your expertise area, freelance writing, graphic design, web development, accounting services, and marketing support all represent opportunities to monetize professional skills flexibly.

Local Services: Home cleaning, organizing, handyman work, landscaping, pet services, and personal training serve local markets and often command premium rates due to their personal nature.

Digital Opportunities: Online course creation, blog monetization, social media management, and e-commerce businesses allow entrepreneurs to serve global markets from anywhere with internet access.

Selecting the right side hustle is the most critical decision in your journey toward financial diversification. The choice determines not only immediate income potential but also long-term satisfaction, skill development, and scaling ability.

Assess Your Existing Skills and Expertise: The most successful side hustles typically build on skills and knowledge you already possess. This approach offers several advantages: immediate income generation without extensive training, higher-quality services commanding better rates, and greater confidence in your ability to succeed.

Consider both hard and soft skills. Hard skills might include programming, design, accounting, or writing. Soft skills like communication, organization, and problem-solving are equally valuable and can be monetized through consulting, coaching, or service businesses.

Evaluate Your Available Time and Energy: Realistic time assessment is crucial for success. Consider not just available hours but when they occur and your energy levels. Different side hustles have different time requirements and flexibility levels.

Analyze Market Demand and Competition: Research demand for your potential side hustle, competition you'll face, and pricing customers will pay. Use Google Trends to show whether interest is growing or declining. Job boards and freelance platforms provide insight into demand and typical pricing.

Consider Your Financial Goals: Different side hustles offer different income potential and characteristics. Some provide immediate income but limited growth, while others require significant upfront investment but offer greater long-term returns. Align your choice with financial goals and constraints.

Once you've selected your side hustle, establishing reliable payment processing is one of the most critical operational decisions. Your payment system affects everything from customer experience to cash flow management. This is where North's comprehensive payment technology solutions become invaluable.

Why North is Perfect for Side Hustlers:

Comprehensive Payment Acceptance: North enables you to accept payments in-store, online, and on-the-go, providing flexibility modern side hustlers need. Whether providing services at client locations, selling products online, or operating hybrid models, North's platform adapts to your needs.

Enterprise-Level Security: North's PCI DSS-validated platform provides point-to-point encryption and tokenization, ensuring both you and customers are protected from fraud and data breaches. This enterprise-level security builds customer trust and protects business reputation.

Cash Flow Optimization: North's same-day or next-day funding options ensure quick access to earnings at no extra cost. This rapid funding capability is crucial for maintaining operations, purchasing inventory, or taking advantage of growth opportunities.

Scalability: North's platform grows with your business, providing increasingly sophisticated capabilities without requiring system changes or learning new processes. Start with simple payment processing and add features like invoicing, inventory management, and reporting as your business expands.

Professional Customer Experience: North's clean, intuitive interfaces and reliable processing create positive customer impressions that differentiate your business from competitors who may use less sophisticated payment methods.

24/7 Support: Real human customer service representatives are available, helping to reduce disruptions in payment processing and business operations, even during evenings and weekends when many side hustlers are most active [20].

Getting Started with North Setting up payment processing with North is designed to be straightforward and quick, allowing you to start accepting payments and generating revenue quickly. The onboarding process is streamlined to minimize paperwork and delays while ensuring necessary compliance and security measures are in place.

To learn more, visit North.com.

The evidence is overwhelming: the traditional model of career security based on single-employer loyalty has become obsolete and dangerous. The convergence of AI advancement, corporate instability, and economic uncertainty has created an environment where workers must take control of their financial destinies.

But within this challenge lies opportunity. The same technological forces disrupting traditional employment are creating opportunities for individual income generation. The global gig economy's projected growth represents the largest expansion of entrepreneurial opportunity in human history.

The 36% of US adults who already operate side hustles aren't just making extra money - they're building financial resilience and career flexibility that will serve them well in an increasingly volatile environment. These workers have recognized that having options is more valuable than having security, and they've taken action to create those options.

The side hustle path offers more than financial benefits. It provides skill development, networking opportunities, creative fulfillment, and psychological benefits from controlling your financial destiny. Workers with side hustles report higher job satisfaction and lower stress levels because they have alternatives.

The barriers to starting have never been lower. Digital platforms have democratized access to customers and markets, while tools like North's payment processing solutions enable individual entrepreneurs to deliver professional customer experiences rivaling major corporations.

The collaboration between Half Baked and North that produced this eBook represents the kind of partnership making side hustle success possible. Half Baked provides ideas and inspiration fueling entrepreneurial thinking, while North provides payment processing infrastructure enabling professional business operations.

The resources exist, opportunities are abundant, and the need is urgent. The question isn't whether you should start a side hustle - it's how quickly you can begin building the diversified income portfolio providing both security and opportunity in 2026 and beyond.

Your financial security is too important to leave entirely in someone else's hands. The tools, resources, and opportunities exist to build the kind of diversified income portfolio providing both security and opportunity. The only question is whether you'll use them.

The choice is yours, but the need is clear: in 2026 and beyond, everyone needs a side hustle.

[1] American Bankruptcy Institute. (2025). "Annual Business and Non-business Filings by Year (1980-2025)." [2] Goldman Sachs Research. (2025). "The Potentially Large Effects of Artificial Intelligence on Economic Growth." [3] Hostinger. (2025). "Side hustle statistics 2025: Key data, trends, and what they mean." [4] Ibid. [5] World Economic Forum. (2025). "The Future of Jobs Report 2025." [6] TechCrunch. (2025). "2025 tech layoffs: The complete list." [7] Goldman Sachs Research. (2025). Op. cit. [8] Ibid. [9] Ibid. [10] Ibid. [11] Ibid. [12] McKinsey & Company. (2025). "Economic conditions outlook, September 2025." [13] Ibid. [14] Ibid. [15] World Economic Forum. (2025). Op. cit. [16] Federal Reserve Board. (2024). "Report on the Economic Well-Being of U.S. Households in 2023." [17] Hostinger. (2025). Op. cit. [18] Ibid. [19] Ibid. [20] North. (2025). "Merchant services & payment technology." https://www.north.com/

About the Collaboration: Half Baked delivers startup ideas and strategies to 100,000+ entrepreneurs daily. North provides payment technology that scales with growing businesses. Together, they offer the inspiration and infrastructure needed for side hustle success.

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