Over the past decade, we’ve seen the emergence of what economists call a “Gig Economy” or “Freelance Economy.” This term describes the increase in temporary, contractual, freelance, or on-demand work rather than permanent work. While such work has always existed, it’s more accessible these days thanks to apps like Uber, DoorDash, and Fiverr.
One major benefit of these freelance jobs is that they allow workers more freedom to set their own hours, which can be a particular draw for students and those who need a second job to pay the bills.
While we’re seeing the growth of second jobs and side gigs all over the U.S., the distribution isn’t equal across all states. LLC Attorney took a deeper look at the data for each state to identify where side work is expanding most rapidly, and explored some of the reasons why some states rank higher than others.
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Highest Growth States
For the analysis, we ranked states by examining year-over-year changes in the average monthly number of people with a second job and in the growth of nonemployer business establishments between 2022 and 2023. Together, this data can give us an idea of which states are seeing higher growth in people taking on “side gigs.”
Oregon ranks first overall. From 2022 to 2023, the average monthly number of people with a second job increased by more than 24,000, a 24.2% rise. During the same period, the state added over 8,400 nonemployer businesses.
Nevada ranks second. The state recorded a 25.7% increase in second job statistics, one of the largest gains nationwide. Nevada is known as a big vacation state, which results in a service and tourism-focused labor market that not only makes side gigs a practical option but also increases the demand for services like Uber and DoorDash.
Alaska places third despite its smaller population. The state saw a 27.7% increase in the number of people holding a second job. North Dakota ranks fourth, with a 23.8% increase in second job participation.
Finally, Hawaii rounds out the top five and posted the largest increase in the number of people with second jobs nationwide. From 2022 to 2023, the average monthly number of residents working two jobs rose by 34.3%.
Why the Side-Gig Economy Is Growing
Cost of Living, and Economic Opportunity
For each of the highest-ranking states, there are common threads that may explain why they are seeing such an increase in their gig economies. Firstly, many of these states have a high cost of living. Across the entire country, housing, utilities, food, and healthcare costs have increased faster than wages in many regions. As a result, it’s become a necessity for many to work two jobs. For example, Hawaii, with some of the highest housing and consumer costs in the country, also recorded the largest percentage increase in the number of people working two jobs between 2022 and 2023. Oregon and Nevada show similar patterns, where high housing costs compared to income have pushed more workers to rely on side jobs to stay afloat. In , Alaska,isolation, weather, and a seasonal job market all contribute to higher living costs, leading to a greater reliance on side hustles for additional income.
Secondly, the top states also represent those with less diverse economic opportunity. States like Nevada, Hawaii, and, to a lesser extent, Alaska rely more heavily on tourism, services, and hospitality than other states, which can limit economic opportunities. This can lead to more people seeking side gigs, thanks to the unsteady, sometimes seasonal nature of these industries.
Benefits and Tradeoffs
As side jobs become a more permanent part of household income, it’s worth considering the pros and cons of this shift. Many gig workers appreciate the flexibility to choose when and where they work, which can allow them to work even with tricky schedules or personal commitments. Independence is another major advantage, as workers can manage their own schedules and control the kinds of work they take on. Gig work also offers the potential for diverse income streams and the ability to set rates or take on multiple gigs at once.
Still, there are tradeoffs to consider. Gigs rarely include employer-provided benefits such as health insurance, retirement plans, or paid leave, leaving workers responsible for securing these on their own. Add to this that income can fluctuate widely from month to month, making gig workers more financially insecure and less able to set a budget. Gig work can also be isolating, since it usually lacks the social connections of traditional work. Finally, constant competition for new opportunities can add stress, especially for those who depend on gigs as their primary source of income.
For better or worse, the growth of the gig economy reflects lasting changes in how Americans work and earn income. From Oregon to North Dakota to Hawaii, side gig trends reflect how workers respond to economic pressure and opportunity alike. Growth in second-job participation and in nonemployer businesses points to a workforce that values flexibility while seeking financial security.
As side hustles begin to generate consistent income, it’s vital to have your legal bases covered. Forming an LLC can help protect personal assets, clarify tax responsibilities, and support future business plans. If your freelance gig is becoming more than occasional income, we can help you take the next step by guiding you through the LLC formation process.
States Ranked by Side-Gig Growth
| State | Average Monthly Number of People With a Second Job (2022) | Average Monthly Number of People With a Second Job (2023) | Increase in the Average Monthly Number of People Working a Second Job Between 2022 and 2023 | Percentage Increase in the Average Monthly Number of People Working a Second Job Between 2022 and 2023 | Number of Nonemployer Business Establishments (2022) | Number of Nonemployer Business Establishments (2023) | Increase in Number of Nonemployer Business Establishments Between 2022 and 2023 | Percentage Increase in Business Establishments Between 2022 and 2023 | Final Score |
|---|---|---|---|---|---|---|---|---|---|
| Oregon | 100,961 | 125,397 | 24,436 | 24.2% | 320,778 | 329,262 | 8,484 | 2.6% | 185.94 |
| Nevada | 60,319 | 75,833 | 15,514 | 25.7% | 294,529 | 299,815 | 5,286 | 1.8% | 176.51 |
| Alaska | 20,093 | 25,650 | 5,557 | 27.7% | 60,471 | 61,337 | 866 | 1.4% | 172.21 |
| North Dakota | 21,293 | 26,358 | 5,065 | 23.8% | 59,106 | 60,342 | 1,236 | 2.1% | 172.19 |
| Hawaii | 35,887 | 48,188 | 12,301 | 34.3% | 119,647 | 120,656 | 1,009 | 0.8% | 167.50 |
| South Carolina | 106,883 | 133,102 | 26,220 | 24.5% | 440,037 | 445,689 | 5,652 | 1.3% | 159.49 |
| Delaware | 23,544 | 25,936 | 2,392 | 10.2% | 88,530 | 93,022 | 4,492 | 5.1% | 155.02 |
| Rhode Island | 28,868 | 33,563 | 4,695 | 16.3% | 92,358 | 95,241 | 2,883 | 3.1% | 152.84 |
| Virginia | 215,708 | 253,731 | 38,023 | 17.6% | 722,562 | 740,321 | 17,759 | 2.5% | 146.44 |
| Massachusetts | 196,037 | 221,319 | 25,283 | 12.9% | 612,132 | 633,439 | 21,307 | 3.5% | 142.05 |
| Wisconsin | 179,400 | 209,031 | 29,631 | 16.5% | 389,776 | 397,269 | 7,493 | 1.9% | 129.33 |
| Florida | 345,817 | 364,915 | 19,099 | 5.5% | 2,968,201 | 3,117,327 | 149,126 | 5.0% | 128.91 |
| Oklahoma | 94,129 | 111,540 | 17,410 | 18.5% | 323,064 | 327,441 | 4,377 | 1.4% | 128.27 |
| Utah | 90,278 | 100,018 | 9,740 | 10.8% | 294,809 | 304,287 | 9,478 | 3.2% | 125.12 |
| Pennsylvania | 318,908 | 370,239 | 51,331 | 16.1% | 938,764 | 955,359 | 16,595 | 1.8% | 123.84 |
| Ohio | 320,679 | 375,427 | 54,748 | 17.1% | 898,451 | 909,227 | 10,776 | 1.2% | 117.33 |
| Illinois | 295,383 | 337,168 | 41,785 | 14.1% | 1,100,655 | 1,120,413 | 19,758 | 1.8% | 113.85 |
| Minnesota | 192,947 | 214,004 | 21,057 | 10.9% | 442,345 | 453,181 | 10,836 | 2.4% | 109.92 |
| Colorado | 191,430 | 200,418 | 8,988 | 4.7% | 583,986 | 607,592 | 23,606 | 4.0% | 109.29 |
| Connecticut | 120,874 | 124,812 | 3,938 | 3.3% | 312,711 | 326,020 | 13,309 | 4.3% | 105.94 |
| Wyoming | 19,853 | 20,225 | 372 | 1.9% | 62,751 | 65,773 | 3,022 | 4.8% | 105.13 |
| Texas | 637,396 | 701,145 | 63,749 | 10.0% | 3,023,525 | 3,092,631 | 69,106 | 2.3% | 101.58 |
| Washington | 201,555 | 221,388 | 19,833 | 9.8% | 533,681 | 545,903 | 12,222 | 2.3% | 100.80 |
| New York | 390,306 | 413,720 | 23,413 | 6.0% | 1,923,517 | 1,985,320 | 61,803 | 3.2% | 99.14 |
| Arkansas | 48,665 | 55,105 | 6,440 | 13.2% | 241,619 | 244,688 | 3,069 | 1.3% | 98.01 |
| Montana | 44,546 | 46,304 | 1,758 | 3.9% | 105,934 | 109,660 | 3,726 | 3.5% | 94.34 |
| Nebraska | 77,056 | 79,210 | 2,153 | 2.8% | 150,120 | 154,971 | 4,851 | 3.2% | 82.17 |
| Missouri | 151,288 | 161,552 | 10,264 | 6.8% | 475,437 | 485,486 | 10,049 | 2.1% | 80.59 |
| Michigan | 225,311 | 246,511 | 21,200 | 9.4% | 809,426 | 815,013 | 5,587 | 0.7% | 65.27 |
| New Mexico | 35,971 | 38,355 | 2,385 | 6.6% | 138,557 | 140,015 | 1,458 | 1.1% | 57.73 |
| New Jersey | 191,647 | 186,744 | -4,902 | -2.6% | 856,771 | 883,628 | 26,857 | 3.1% | 51.18 |
| Kansas | 98,979 | 104,510 | 5,531 | 5.6% | 217,018 | 219,072 | 2,054 | 0.9% | 49.89 |
| West Virginia | 28,708 | 29,858 | 1,150 | 4.0% | 93,669 | 94,681 | 1,012 | 1.1% | 44.11 |
| California | 776,299 | 798,999 | 22,700 | 2.9% | 3,502,950 | 3,537,469 | 34,519 | 1.0% | 36.28 |
| New Hampshire | 45,513 | 45,690 | 178 | 0.4% | 114,903 | 116,209 | 1,306 | 1.1% | 25.69 |
| Vermont | 20,879 | 21,473 | 594 | 2.8% | 64,930 | 65,028 | 98 | 0.2% | 18.53 |
| Kentucky | 104,995 | 99,258 | -5,736 | -5.5% | 328,057 | 335,592 | 7,535 | 2.3% | 18.07 |
| South Dakota | 33,002 | 30,597 | -2,404 | -7.3% | 74,028 | 75,686 | 1,658 | 2.2% | 7.01 |
| Arizona | 157,642 | 146,393 | -11,249 | -7.1% | 585,251 | 598,126 | 12,875 | 2.2% | 7.00 |
| Idaho | 59,525 | 54,155 | -5,370 | -9.0% | 160,914 | 165,145 | 4,231 | 2.6% | 5.70 |
| Maine | 55,006 | 53,373 | -1,633 | -3.0% | 125,923 | 127,173 | 1,250 | 1.0% | 4.52 |
| Maryland | 171,820 | 156,573 | -15,247 | -8.9% | 586,327 | 599,050 | 12,723 | 2.2% | -3.03 |
| North Carolina | 233,414 | 226,578 | -6,836 | -2.9% | 914,586 | 920,236 | 5,650 | 0.6% | -3.04 |
| Alabama | 81,797 | 81,435 | -362 | -0.4% | 390,228 | 388,978 | -1,250 | -0.3% | -9.04 |
| Iowa | 120,863 | 116,833 | -4,030 | -3.3% | 228,133 | 228,781 | 648 | 0.3% | -12.16 |
| Louisiana | 89,177 | 93,973 | 4,797 | 5.4% | 430,224 | 418,516 | -11,708 | -2.7% | -27.33 |
| Tennessee | 142,986 | 125,008 | -17,979 | -12.6% | 637,340 | 649,168 | 11,828 | 1.9% | -29.59 |
| Georgia | 209,820 | 204,288 | -5,531 | -2.6% | 1,175,541 | 1,163,944 | -11,597 | -1.0% | -34.74 |
| Indiana | 191,132 | 169,717 | -21,415 | -11.2% | 480,921 | 486,290 | 5,369 | 1.1% | -37.51 |
| Mississippi | 44,781 | 39,063 | -5,718 | -12.8% | 251,172 | 253,350 | 2,178 | 0.9% | -51.15 |
Methodology:
States where the side-gig economy is growing fastest were identified by analyzing workforce data from IPUMS and business formation statistics from the U.S. Census Bureau. Using IPUMS CPS data, we calculated the year-over-year changes and percentage growth in the average monthly number of people with a second job in each state between 2022 and 2023. Additionally, Census data on nonemployer business establishments were analyzed to measure changes and percentage growth in new businesses with no paid employees over the same time period.
States could earn up to 100 points for each metric, with larger percentage gains receiving more points. The score for the percentage growth of people with second jobs was weighted more heavily (1.5 times) because it most directly reflects active participation in side work. This resulted in a final score out of 250 points, which was used to rank the states.
Source:
U.S. Census Business Formation Statistics
IPUMS CPSSarah Flood, Miriam King, Renae Rodgers, Steven Ruggles, J. Robert Warren, Daniel Backman, Etienne Breton, Grace Cooper, Julia A. Rivera Drew, Stephanie Richards, David Van Riper, and Kari C.W. Williams. IPUMS CPS: Version 13.0 [dataset]. Minneapolis, MN: IPUMS, 2025.https://doi.org/10.18128/D030.V13.0
U.S. Census Bureau Nonemployer Statistics (NES)
https://www.census.gov/programs-surveys/nonemployer-statistics.html