The Introspective

Exploring How Gen Z Embraces Freelancing and Entrepreneurship Amid Economic Challenges

Dante Belcher

Aug 29, 2024

Gen Z has faced unprecedented global challenges, from economic recessions to a global pandemic. As traditional career paths become less secure, many from this generation are rethinking their professional trajectories. Moving away from conventional 9-to-5 jobs, a growing number are turning to self-employment to navigate the modern world’s uncertainties.

While self-employment existed before the pandemic, the economic uncertainty and the rise of remote work since 2020 has led to a rise the “side hustle”. Research shows that 1 in 3 people globally have a second job, with 30% of the workforce having a second job due to economic concerns and rising costs of living. According to this same research, Gen Z is the most impacted group with 40% having two or more jobs, followed by 36% of Millennials, 30% of Gen X, and 21% of Baby Boomers.

As more of us enter the workforce, we’re not just filling traditional roles; we’re redefining them. The lines between a side hustle, freelancing, and full-time work are blurring, with many Gen Zer’s leveraging their skills across multiple platforms and industries. Data from the Bureau of Labor Statistics shows that there were 21 million employees aged 16 to 24 in the US alone in 2022. The number of people working multiple full-time jobs hit a historical high in August 2022.

But this sudden shift can be explained by the COVID-19 pandemic and rising cost of living, A survey by Deloitte revealed that 30% of Gen Z is financially insecure, with 46% of youth living paycheck to paycheck. Estimates from Boston University found that over half of Gen Z does not have sufficient savings for retirement, and a survey from Freddie Mac reporting 34% saying that they may never be able to afford a house.

Like many generations before us, we were sold the idea of the “American Dream” that if you worked hard enough and obtained a good paying job, then you were set for life. However, the pandemic and the resulting economic fallout shattered that reality for many of us, making us disillusioned by the fragile frameworks of our economy.  

In an interview with Forbes, entrepreneur and real estate founder Dave Liniger observed the rise in freelancing,

“Entrepreneurship is an appealing career path for Gen Zers who have experienced economic instability and the rise of the gig economy,” said Liniger

“They view entrepreneurship as a viable path to financial security and personal fulfillment.”

Liniger’s observations correspond to many of my observations with entrepreurship and my generation. During my time at Hampton University, peers from the classrooms to the dorm rooms would start clothing lines, tutoring services, podcasts, and even record labels, all from a screen and through social media such as Tik Tok, Instagram and Twitter. Research from Square found that 84% of Gen Zers wanted to own their own company in the future, with 45% using their own savings to help launch their business, furthermore the study also found that 80% launched their business online, confirming my observations.

The rise of having a “side hustle” has brought a steady form of income to many members of Gen Z, with a survey by Bank of America finding that 72% of respondents had one, with most earning between $500 and $1000 a month, alleviating some economic uncertainty.

But as we navigate this entrepreneurial path, there’s another crucial element that we can’t afford to overlook—work-life balance. While the side hustle culture has offered financial relief, it has also blurred the lines between work and personal life. Studies from Fiverr found that 1 in 5 Gen Zers surveyed said that “work to live” and don’t “live to work”. However, in that same study, 71% of respondents said that flexible working hours were top priorities when pursuing a new job or pursuing a passion. Emphasizing the increased importance of work-life balance.

For many Gen Z’ers, especially those who are neurodivergent, this flexibility isn’t just a preference—it’s a necessity. The rise in freelancing and entrepreneurship has provided a unique opportunity for those who struggle with traditional work environments. In 2023, a survey by online platform ZenBusiness found that out of a survey of 1,000 people 18 to 25, half of respondents described themselves as neurodivergent, with 80% saying that they believe neurodiversity is more of an advantage for entrepreneurship than a traditional career.

However, the success of these ventures doesn’t exist in a vacuum—it’s deeply influenced by the broader economic policies that shape our environment. As more of us venture into self-employment, the importance of supportive economic policies becomes increasingly clear. Referring back to the Square report, 46% of those surveyed believe that lower taxes would benefit small businesses owners, 42% saw access to affordable housing as improving their business, followed by a universal basic income with 35%.

Despite the growing trend of freelancing, several challenges persist. A 2023 report by McKinsey highlights that freelancers typically do not receive employer-sponsored health insurance, retirement plans, or paid leave, leaving them without crucial protections in emergencies. The Harvard Business Review notes that freelancers often face job security issues, with no guaranteed future work leading to periods of unemployment or underemployment. Additionally, freelancers must manage their own taxes and administrative tasks, which adds complexity and potential stress.

Moreover, collective action and community investment are cornerstones of how our generation approaches entrepreneurship. According to a 2022 survey by MarketCast and Square, 40% said that success meant making a difference in their communities. 73% reported feeling a connection with other businesses owners and leaders, revealing how to Gen Z success isn’t defined by just our own success but also the achievements of our surrounding communities.

Observing the changes in Gen Z, Ann Woo, head of corporate citizenship at Samsung Electronics America said in an interview with CNBC, “They don’t want to wait to climb the corporate ladder or be recognized as ‘thought leaders’ in their industries to make a positive, measurable impact through their careers. If you have all of the tools to put your voice out in the world and pursue your dreams, why delay?”