Income Volatility in the Service Sector: Contours, Causes, and Consequences

This brief from the Aspen Institute’s Expanding Prosperity Impact Collective examines how income volatility affects outcomes for hourly service sector employees. The researchers conducted quantitative analysis using the Retail Work and Family Life survey, and they also included 25 in-depth interviews with San Francisco-area parents working in retail or food service. Half of workers employed at the largest 30 retail and fast food companies reported that their income varied from week to week. Workers with variable schedules were more likely to report weekly income volatility than those who worked a regular day shift. Weekly income volatility was also more likely to lead to financial hardship and difficulty paying bills. The authors recommend six solutions to reduce income volatility, including predictable scheduling, wage insurance, and unemployment insurance.