Millennial and Gen Z gig workers are earning a lot more than their older peers

• Millennials are particularly attracted to gig work as their primary source of income.
• Many are taking jobs as digital freelancers, ride share drivers, and contractors.

Many younger Americans are quitting their full-time roles and taking up gig work to make ends meet.

A higher percentage of Gen Z and millennial workers are making $2,500 or more a month in gig work when compared to Gen X and baby boomers in similar positions, a new TransUnion study of nearly 1,000 adults found. 45% of Gen Z and 44% of millennials are making this amount monthly after considering expenses, compared to 36% of millennials and 30% of boomers.

Older generations were overrepresented among those earning less than $1,000 per month, given they were much less likely to note that gig work is their primary income source.

Among those who use gig work as their primary income source, half are millennials. This was in contrast to 20% for Gen X and 5% for Boomers, though these demographics expect gig work will play a larger role in supplementing their incomes in the future.

"It is a growing population of interest in this, and it is an interesting finding considering the strength of the job market, how wages have increased over the past 18 months," Tracey Lazos, head of TransUnion's gig economy business, told Insider. "They have found ways to make this work for them with the flexibility and the income potential in gig economy work across the different segments of the gig economy."

Participation in gig work tends to attract younger and lower-income people, though more than half of each generation and income bracket participated at some point in the gig economy as a source of income. This value is 68% for millennials and 67% for Gen Z, which suggests that younger generations are attracted to these roles due to greater flexibility, mobility, and self-determination. This compares to 58% of Gen X and 52% of baby boomers.

As gig work — or contract work — continues to rise, many younger workers are flocking to these positions, citing opportunities to make more money, work a more convenient schedule, or try a new career field.

"In a strong job market, using gig platforms as a primary income source is more likely to be a decision made amid an abundance of options rather than desperation," the report reads.

Among the most sought-after freelance positions for all generations are contractors for in-person tasks, digital freelancers, grocery delivery, food delivery, and ride share drivers. Around 40% of ride share drivers reported making $5,000 or more a month, compared to around 35% for grocery delivery and 31% for digital freelancers.

It's likely these numbers will grow in the future, as for instance, 38% of people say they will participate in grocery delivery in the future despite only 22% currently working in that role.

A working paper from May 2023 found that the number of platform gig workers increased from 1.8 million in 2019 to 4.9 million in 2021, corresponding to a 170% increase.

"There's opportunities for them to make money in this space and for them to either supplement or have that be their high income," Lazos said.

Still, the report notes how gig platforms are at risk due to falling inflation, a still-hot job market, and lingering economic uncertainty. Common reasons people stopped doing gig work included getting a full-time job or a raise, not making enough money or working too few hours, and safety concerns. Nearly one in four gig workers have been victimized by fraud or identity theft while using gig platforms — more than double the rate of those not using gig platforms.

The most recently Bureau of Labor Statistics Job Openings and Labor Turnover Survey revealed there are still almost 9 million job openings nationwide — even with unemployment at historic lows — which suggests many companies are looking to fill those spots by competing with gig platforms. Given real income is growing, some gig platforms are struggling to attract new workers while keeping services affordable.

Have you recently taken up gig work as your primary income source? Have you made the switch from a full-time job to a gig job? Reach out to this reporter at nsheidlower@insider.com.