Over 2 million workers are missing from the US workforce. Here's how they're paying their bills.

• There are over two million workers missing from the US labor force, per Bank of America Institute.
• One way people could be paying bills even if they're not working is through excess savings.
• Having a "financial buffer" might be a temporary reason why they're out of the labor force, per economist Anna Zhou.

Ever wondered how all those people who quit their jobs during the Great Resignation — especially those who left the workforce completely — are getting by?

They can thank gig work, living with others who are earning money, and excess savings or stimulus money during the pandemic.

That's according to a conversation with Anna Zhou, economist at Bank of America Institute and the author of a recent report that noted over two million US workers are "missing" from the labor force compared to the pre-pandemic participation trend based on Bureau of Labor Statistics data.

"There's no single driver that's really causing people not returning back to the labor force," Zhou told Insider.

Instead, her research points to caregiving duties, early retirements, and lingering COVID-related health issues among the reasons people are missing from the workforce. But most Americans can't afford to simply quit their jobs and still manage to pay the bills, especially during a time of historic inflation. We spoke with Zhou to figure out how all these people missing from the workforce are making it work.

Below are different ways these "missing workers" from the labor force may still be affording expenses and paying bills.

A combination of savings and moving to cheaper locations

According to Zhou and the report, one reason people who have left the labor force may not have returned is because "a lot of people migrated to states where the cost of living might be lower than the major metropolitans," Zhou said. Startup founder Haider Ejaz, for example, previously told Insider that he moved from San Francisco to Portland, Oregon, in 2021 partly due to cost-of-living.

People may also still have savings from stimulus payments, considering "there has been tremendous fiscal support over the last few years," Zhou said. As of mid-January, people have used just over a third of the extra savings they had built during the pandemic, according to a Wall Street Journal article citing Goldman Sachs. However, this will increase to about two-thirds by the end of 2023 per the article. 

Zhou said based on Bank of America customers' median bank balances that "what we're seeing across income cohorts, that balance has been drawn down from the peak last year as with inflation surging, but the levels are still very elevated compared to where they were in 2019."

"So that suggests that they still have that excess amount of savings that they're able to draw down and also that combined with migration to places with lower costs of living, I think that for one part allows them to work less or not at all," Zhou said.

However, the personal saving rate has come down from its pandemic-era highs. And according to a Bankrate survey, 39% of US adults have less emergency savings than a year ago. Some people don't have any, per the survey.

The "financial buffer" that some of these missing workers may be relying on could be a "temporary reason" they left. Other reasons, however, may not be as temporary. Zhou said the health crisis, childcare affordability, and wanting to do gig work instead of office work "are less likely to be reversed in a near term."

"Meaning this labor shortage problem is likely to be a little bit more persistent than what we would like it to be," Zhou said.

The lifestyle flexibility provided by gig work has changed the way a lot of people work

Zhou said Bank of America customer data shows that for those who made gig income, "that number did pick up very strongly during the pandemic." 

"The potential theory could be some people are doing gig work for say, two months and then they're taking a three-month break," Zhou said. "And for those three months, they will not be counted in the labor force."

But because of the time they did work doing gig work, they have money to rely on, per Zhou.

According to an August 2021 survey noted in a Pew Research Center post, almost a third of gig platform workers who made money on platforms in the past 12 months reported this was their main job. Overall, whether it be a main job or side job, 23% said their gig platform money was "essential" and 35% said it was "important" to help meet their basic needs.

According to reporting from Insider's Jordan Hart, gig worker Matthew Hill tried factory work but then wanted the flexibility to decide his schedule.

"When I'm able to decide what I want to do with my time, there are things I can do to help me learn and grow my own business," Hill said, who is an Uber driver, DoorDash deliverer, and content creator. "There's different opportunities I can come across because I'm always looking for investments to make."

Multi-generational or roommate living allows people to split bills and caregiving duties so they can earn less

Zhou said these missing workers from the labor force could potentially be in a household with multiple earners, noting many young people moved back in with their parents during the pandemic. "Because of the wage inflation in the last year or so has been very strong, it is possible that they're able to offset the cost that they're incurring on their family," Zhou said.

Even before the pandemic, there had been a rise in adults living with other adults, according to a 2018 post from Pew Research Center's Richard Fry.

"While the rise in shared living during and immediately after the recession was attributed in large part to a growing number of millennials moving back in with their parents, the longer-term increase has been partially driven by a different phenomenon: parents moving in with their adult children," Fry wrote.

While that post comes from before the pandemic, a LendingTree survey shows that some Gen Z and millennial adults did move back in with their parents during the pandemic and were able to pay down debt, among other financial perks for themselves.

As Insider's Jacob Zinkula reported, a PropertyManagement.com December survey of millennials found that "1 in 4 millennials are currently living with their parents" per a post on the site. One pro of living in a multiple-earner household could be that you get to save on rent too instead of being hit by a "singles tax" on housing.