People of Color Are Building Wealth By Working Side Hustles — But Here's Why The Gig Economy Could Be Hurting Them, Too.

As of 2023, 1 successful 3 Americans had a broadside hustle — of those, 52% were started successful 2022 aliases later. From picking up an other occupation successful the gig economy to igniting an breathtaking entrepreneurial venture, millions of group started a broadside hustle, and People of Color were portion of this wave. One of the causes of the side hustle roar was the rising costs of surviving and the request to antagonistic the effects of inflation. Nearly 1 successful 4 Americans depended connected their broadside hustle net for their mundane expenses.

While broadside hustles person helped galore group get by pinch their mundane needs, they've besides helped build Black wealth, particularly amongst Black women, who person been 1 of the fastest-growing groups of entrepreneurs successful caller years. Nearly one successful 3 Black women person taken up part-time activity aliases a broadside hustle alongside their full-time job. However, arsenic a consequence of pursuing a broadside hustle, galore People of Color person suffered from a deficiency of work-life balance (or work-life blend, arsenic I often opportunity successful my diversity, equity, and inclusion (DEI) consultancy). Ultimately, are broadside hustles helping aliases hurting People of Color successful their pursuit of entrepreneurship and wealth? I'd opportunity it's a mixed bag.

Side hustles person helped People of Color negociate occupation loss

While the pandemic inspired a caller procreation of exertion workers to subordinate the ranks of Google, Apple, and Microsoft, the bust of tech's hiring spree and consequent cutbacks successful 2022 and 2023 person affected workers of color. Many companies sought to diversify their workforce, and People of Color began joining the ranks of the country's top-performing companies. However, important layoffs successful 2022 and 2023 caused galore people's dreams of tech careers to travel crashing down. With the emergence of broadside hustles, galore group could enactment afloat contempt the looming layoff atmosphere. I personally cognize of respective individuals who started a broadside hustle, knowledgeable a occupation loss, and managed to make it done that play of hardship pinch comparative information because of their broadside hustle income. In this sense, broadside hustles whitethorn person saved group who would person different fallen done the cracks.

Related: After Her Unexpected Layoff, This Founder's Love of Fragrances and Self-Care Helped Her Cope. Now She's Disrupting the Fragrance Industry.

Side hustles person go devices for semipermanent wealth-building

There are galore examples of number business owners who person not only started broadside hustles to gain a fewer other dollars each period but person efficaciously scaled their broadside hustles to full-time roles. For example, Cassiy Johnson started a print-on-demand business done Etsy and scaled it to $800,000 successful yearly gross since 2020. Or moreover Jayson Siu, who started a car accessories marque successful his parents' basement and scaled it to a $500,000 business.

What's moreover much powerful is the effect that minority-owned businesses person connected the wide economy. Black business owners successful the United States reportedly ain 3.5 cardinal businesses and employment much than 1.2 cardinal people. Therefore, Black-owned broadside hustles-turned-businesses person helped employment much group than antecedently thought. Its ripple effects person helped individuals who whitethorn person faced various types of systemic racism successful the workforce to attraction connected building wealthiness for their ain families alternatively of building wealthiness for a ample company. For galore people, starting a broadside hustle that turned into a sustainable business has elevated their family's wealthiness trajectory successful meaningful ways.

Related: How to Build Wealth Through a Side Hustle

Side hustles whitethorn person harmed the intelligence wellbeing of People of Color

Like pinch each caller businesses, moving astir the timepiece tin origin galore group to acquisition higher stress, accrued consequence of burnout, and imaginable intelligence wellness challenges. Entrepreneurs of colour are conscionable arsenic affected by intelligence wellness challenges arsenic anyone else. Unfortunately, one report has shown that People of Color knowledgeable worsening intelligence wellness because of the pandemic and disproportionate barriers to intelligence wellness resources. In addition, the fearfulness of nonaccomplishment and imposter syndrome tin besides clasp entrepreneurs backmost from achieving their business goals and create roadblocks for their intelligence wellbeing. On apical of wearing aggregate hats successful their business, Black entrepreneurs, successful particular, were denied loans astir twice arsenic often arsenic achromatic business owners. All that said, starting a broadside hustle while moving a full-time occupation and trying to standard pinch loans and different superior tin beryllium a intelligence and affectional situation for entrepreneurs of color.

Related: Why Black Entrepreneurs Should Consider Therapy

Side hustles didn't amended the wealthiness spread betwixt People of Color and achromatic Americans

Despite the affirmative gains successful financial resources astatine the individual level, the accrued prevalence of broadside hustles didn't amended the wealthiness gap for entrepreneurs of color. Black Americans faced much indebtedness during the pandemic than their achromatic counterparts, and the spread betwixt Latino and achromatic wealthiness besides lagged down that of achromatic Americans. Entrepreneurship and creating a broadside hustle whitethorn person helped statement the pockets of some entrepreneurs, but it yet didn't alteration the equilibrium of powerfulness aliases amended the larger rumor of wealthiness inequality successful the United States.

Final thoughts

While broadside hustles person had a powerful effect connected communities of color, they've besides had their drawbacks. The median nett worthy of Black households accrued by 60% betwixt 2019 and 2022, and different promising trends were recovered successful Latino, Asian, and migrant communities partially because of broadside hustles. Building wealthiness has go moreover much accessible for People of Color than successful erstwhile decades. In addition, being resilient successful the look of predominant layoffs and occupation uncertainty has been a root of accent for galore people. Side hustles person helped successful that regard. But astatine the costs of intelligence wellness and the accent of not acquiring the superior basal to scale, not everyone has been capable to thrive successful their broadside hustle. The emergence of minority-owned businesses is only increasing. However, the much we tin support entrepreneurs of colour successful their pursuits, the amended our system and communities will be.