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(When Hillary Clinton made speeches about job growth under Obama, she
neglected to mention that the jobs were hardly those that would motivate
people to vote for a continuation of Obama's economic policies. This
article reveals that as unemployment decreases, insecurity grows because
employers no longer offer steady work based on a 40 hour week. Since
this tendency will only increase under Trump, working class discontent
can be expected to grow. Will the Jacobin left continue to straddle the
fence on the DP or will it help to build a new part to its left? That is
the question facing us.)
NY Times, June 1 2017
Steady Jobs, With Pay and Hours That Are Anything But
By PATRICIA COHEN
Mirella Casares has what used to be considered the keystone of economic
security: a job. But even a reliable paycheck no longer delivers a
reliable income.
Like Ms. Casares, who works at a Victoria’s Secret store in Ocala, Fla.,
more and more employees across a growing range of industries find the
number of hours they work is swinging giddily from week to week —
bringing chaos not only to family scheduling, but also to family finances.
And a new wave of research shows that the main culprit is not the
so-called gig economy, but shifting pay within the same job.
“Since the 1970s, steady work that pays a predictable and living wage
has become increasingly difficult to find,” said Jonathan Morduch, a
director of the U.S. Financial Diaries project, an in-depth study of 235
low- and moderate-income households. “This shift has left many more
families vulnerable to income volatility.”
Ever-changing schedules at Victoria’s Secret, for example, make it
difficult for Ms. Casares, 27, to find care for her 2-year-old and
6-year-old and to cover the bills. “The lowest hours I’ve gotten is 15
and the highest I’ve gotten is 39,” said Ms. Casares, who started in
October, earning $10 an hour. The schedule is usually posted a month in
advance, she said, but there are frequently last-minute changes.
Stability is worth a lot to workers. On average, employees are willing
to give up a fifth of their weekly wage to avoid a schedule set by an
employer on a week’s notice, according to a field experiment where
workers were offered a range of alternative hours at different pay levels.
“That is totally the story,” said Mr. Morduch, who watched household
incomes in his study rise and fall. “And that instability and insecurity
are increasingly a part of middle-class life, too.”
In the course of a year, for example, the monthly income of a California
family with one child that Mr. Morduch’s team tracked jumped to $5,279
from as low as $1,175. (Strict ethics protocols prohibit the release of
participants’ names.) The husband supplemented his steady $400-a-week
salaried construction job with extra remodeling work that could add from
$323 to $1,588 a month to his total. His wife picked up from zero to
$1,824 a month from babysitting, and from selling jewelry, clothing and
flowers.
Monthly expenses can pendulum as much as income, but the two do not
necessarily move in tandem. An analysis of 250,000 bank accounts by the
JPMorgan Chase Institute, a nonprofit research arm of the bank, found
that roughly 80 percent of households had an insufficient cash buffer to
manage the mismatch between income and expenses in a given month.
Few people can comfortably ride out the inevitable financial bronco
ride. “Only households that earn $105,000 or more a year are secure
against the volatility they are exposed to,” said Diana Farrell, the
institute’s president and chief executive. “It’s not just about the
unemployed or the poor.”
Middle-income households, for example, saw their monthly expenses
deviate by nearly $1,300, the equivalent of a month’s rent or mortgage
payment. And one uh-oh expense — usually in the form of a medical, tax
or car repair bill — can wreck a family’s balance sheet for a year or more.
Even a single month’s volatility can have a cascading effect. One month,
a family copes by using the money earmarked for, say, the utility bill
to cover the cost of replacing a busted water heater. The next month,
it’s the telephone company that goes unpaid as the family struggles to
make up the missed utility bill plus late fees and interest — and so on.
Emergencies are not the only source of expense spikes. So are bridal
showers, Christmas gifts and outgrown winter coats.
May turned out to be an expensive month for Tomika Waggoner, 44, a
nursing home aide in Newport, Ky. Her daughter was graduating from high
school, and she needed a few hundred dollars to pay for her cap and
gown, commencement fees, a prom ticket and a dress.
Ms. Waggoner’s work schedule depends on her ability to find care for her
15-year-old son, who has epilepsy. So sometimes she works a weekend at
$17 an hour and sometimes three $15-an-hour weekdays.
For the Waggoner family, and many others with low and moderate incomes,
a tax refund offered a once-a-year lifeline. That $700 check and a
contribution from her mother covered most of the graduation costs and
helped pay off the debt on some furniture. (Doctor’s visits and medical
payments are frequently scheduled to coincide with tax refunds,
according to the JPMorgan Chase Institute.)
“I also went to a couple of food pantries,” Ms. Waggoner added. “We ate
a lot of bologna.”
Rather than causing jolts in income, the gig economy is, for many
people, what smooths them out. Only about 0.5 percent of the labor force
is working in the gig economy. And while bonuses, extra commissions and
overtime bump up a worker’s average income, unwelcome reductions in
hours, particularly at the lower end of the income ladder, more often
shrink an expected paycheck.
“Stable, predictable work schedules are essential to economic security,”
said Susan J. Lambert, a professor at the University of Chicago who is
studying new data supplied by the General Social Survey, a respected
national survey that began asking in-depth questions about work
schedules only last year.
The latest data shows that 41 percent of all hourly workers say they are
not given more than a week’s notice of their schedule; nearly half have
little or no say on their work hours.
“It’s not just service, or female-dominated jobs, but some of the most
challenging schedules are production and construction jobs,” Ms. Lambert
said.
The ubiquity of the phenomenon has frequently been masked by annual
measures of income and spending or one-time snapshots of savings and
debt that fail to capture fluctuations week to week or month to month.
Ms. Casares said that when she had to turn down an inconvenient shift at
Victoria’s Secret, like staying until midnight to close, her schedule
the following week would suffer. “I would be facing fewer hours,” she said.
To supplement the light weeks, Ms. Casares started picking up a shift as
a part-time server at Olive Garden ($5.39 an hour plus tips).
The number of Americans living comfortably or doing all right
financially has grown since the recession. Still, the new Fed report
found that 30 percent — roughly 73 million adults — say they are finding
it difficult to get by financially, or are just getting by.
To Mr. Morduch and his co-author, Rachel Schneider, the rise in income
volatility is an indication of how businesses in an era of advancing
technology and global competition have shifted risk onto employees.
Consider the cost of saving for retirement and medical care. When health
insurance premiums for employers soared between 2003 and 2013 (before
the Affordable Care Act went into effect), workers picked up 93 percent
of the extra cost.
Asked whether her job at Victoria’s Secret provided benefits, Ms.
Casares said it did: “We’re given three bras and a bottle of Bombshell,
their No. 1 selling perfume.” Health or retirement contributions are not
part of the package.
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