Gen Z Redefines Work as Flexible Pay Gains Ground

With inflation and changing government policies prompting widespread uncertainty, 6 in 10 American workers are facing pocketbook challenges while lacking the steadiness and predictability of a salaried job.  

The latest installment of PYMNTS Intelligence’s “New Reality Check: The Paycheck-to-Paycheck Report” series, breaks down how consumers earn income. The study is based on a census-balanced survey of 2,117 U.S. adult consumers, 62% are employed. Among those workers, 43% say their primary source of income is an hourly wage, and another 15% say it is from other non-salaried pay models such as gig work or contract fees.

Gen Z workers especially are working outside of fixed-salary roles. Nearly 3 in 4 get their income in other ways, with 51% earning hourly wages, 9% earning contract or consulting fees, 7% earning income from gig or platform work and 5% earning commission-based pay.

More Americans are relying on part-time jobs to make ends meet. According to data from the U.S. Bureau of Labor Statistics, the number of employees working full-time dropped by 0.5%, or 695,000 people, between 2023 and 2024. The number of part-time workers jumped 3.7%, or just over 1 million people, during the same period.

Relatedly, the rise in gig work can be seen in the expansion of major platforms catering to independent contractors and freelancers. In the third quarter of 2025, Uber said it had 9.4 million drivers, up from 7.8 million the year before and 7.4 million in the second quarter of last year. DoorDash grew total orders by 21% year over year in Q3 to 776 million. Lyft reported record-high gross bookings of $4.8 billion in the third quarter, a 16% year-on-year spike. Even companies outside the dedicated gig platform space, such as UPS, are using the gig model.

But as more consumers rely on hourly, project-based and gig work to make ends meet, rather than the stability of a fixed salary, they may find it harder to weather an uncertain economic environment. Because of the Trump administration’s global “reciprocal” tariffs regime, Americans face the highest import levies in 90 years. 

Recent PYMNTS data shows confidence slipping, especially among lower-income workers. JPMorganChase CEO Jamie Dimon, often described as a pessimist, sees the threat of a U.S. recession continuing to loom as the new year approaches. Two-thirds of Americans live paycheck to paycheck, including 42% who see their money fly out the door the month it comes in, an 18% jump since August. It is not as if these workers can simply leave their jobs for more steady, reliable work, with the number of job openings unchanged at 7.2 million in August.

What’s more, many of the skilled jobs that often come with fixed salaries are shrinking. While economists are sharply divided over the degree to which artificial intelligence (AI) will eliminate jobs, some recent research suggests that white collar roles — those traditional salaried positions — will be most impacted. While some businesses tout how AI will enable them to introduce operational efficiencies and reduce their workforces, companies also downsize for reasons not related to the technology. October saw a 175% year-over-year increase in layoffs, with Amazon planning to eliminate 30,000 corporate jobs and Target slashing its corporate roles by 1,800.

Workers have been nervous about these reductions for some time. A PYMNTS Intelligence survey last year found that 58% of consumers believed generative AI posed a risk to high-skilled jobs in tech. More than half deemed it a risk to mainstream office-based occupations, and 52% said it jeopardized roles for qualified education workers.

As go changes in the labor market, so go spending and consumption patterns, deepening the connection between income instability and personal financial well-being.

To get a clearer picture of how consumers are earning their income, read the full report, Income Instability Is Redefining the Paycheck-to-Paycheck Economy. The study also explores how consumers’ monetary lifestyles are changing and how their income sources shape their financial circumstances.

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