September 06, 2023
Economic lives have become fluid in the United States during recent decades, with individual or family incomes often varying from month to month, from quarter to quarter, or across years. The income instability that hourly workers and their families are facing is mostly driven by frequent earnings changes, which could be a result of unpredictable schedules or involuntary job churn. This, along with insufficient work hours (another understudied workplace issue), may jointly affect low-income workers’ economic security. The current economic recovery, with strong job growth and high rates of job switches, provides a unique opportunity to examine work-hour insecurity issues and better understand the extent to which the volatility of work hours has leveled off in the past two years and who does or does not benefit from the ongoing economic recovery.
My latest issue brief published by the Boston Fed’s Regional & Community Outreach department provides a portrait of intra-year work-hour volatility (or instability) and patterns over time, from 2016 to 2022, by wage level, parental status, race and ethnicity, educational attainment, and age. Using a nationally representative sample of workers, it then explores whether specific demographic groups exhibit higher variability in working hours in the phase of economic recovery, net of other workers’ characteristics. For comparison, I also examine levels of work hours across groups. Results reveal that greater volatility is marked among workers from the bottom wage quintile, the less educated, and the young. Unmarried parents and workers of color experience relatively high volatility in hours. Despite regaining hours as the economy reopened, these groups consistently worked fewer hours over the period examined. Prior to the pandemic, the gaps in volatility across groups narrowed; although COVID-19 erased some of this progress, the decline in the level of volatility workers faced in 2022 suggests a return to prepandemic conditions. The extent to which those gains will be sustained remains to be seen as economic recovery progresses.
Key findings
- Nationwide, workers with the lowest wages, those with less than a high-school diploma, and younger workers faced substantially greater work-hour volatility between 2016 and 2022, even after adjusting for workers’ various characteristics.
- Black workers and unmarried parents also experienced higher volatility in hours worked.
- From 2021 onward, the wage-, race-, and age-based gaps in volatility all showed signs of improvement, albeit with unmarried parents and less-educated workers still seeing large differences relative to their child-free and highly educated peers.
- The groups with the most volatile hours remain those working fewer hours. Even though workers are regaining hours, the levels of hours worked and the variability of those hours have not fully returned to those of the prepandemic period for less-advantaged workers.
Read more on the Boston Fed’s page.
An article related to the report can be found here
