US study shows one-third of adults suffer severe income fluctuations
By
Josh Varlin
7 June 2017
A recent survey by the US Federal Reserve indicates that income volatility—shifts in income from month to month—regularly affects large shares of the US workforce and can be extreme. Income volatility makes weathering unexpected expenses nearly impossible for many workers, and compounds problems associated with low savings, student loan debt and informal work in the “gig economy.”
The report, published by the Consumer and Community Development Research Section of the Federal Reserve Board’s Division of Consumer and Community Affairs last month, is based on an October 2016 survey of 6,610 households. The survey collected extensive data on respondents’ personal finances, employment characteristics, income, retirement and other indicators of economic health.
The report’s shocking findings give some indication of the social crisis confronting vast sections of the US working class. One significant finding is that 32 percent of adults “say that their income varies to some degree month to month, and 13 percent struggle to pay bills in some months due to income volatility.” Forty percent of people with volatile incomes struggled to pay their bills because of irregular income schedules.
Income volatility disproportionately affects racial and ethnic minorities, with 70 percent of white adults reporting income stability compared to only 60 percent of blacks and 59 percent of Hispanics. Moreover, blacks and Hispanics are more likely to report that income volatility resulted in economic hardship than whites, even after controlling for a number of factors.
Nevertheless, according to the study, “Non-Hispanic white adults with a high school degree or less are somewhat less…