The bills arrive as regularly as a heartbeat at the Vories’s cozy bi-level brick house just across the Ohio River from Cincinnati. It’s the paychecks that are irregular.
These days, Alex Vories, 37, is delivering pizzas for LaRosa’s, though he has to use his parents’ car since he wrecked his own 1997 Nissan van on a rainy day last month. In the spring and autumn, he had managed to snag several weeks of seasonal work with the Internal Revenue Service, sorting tax returns for $14 an hour. But otherwise the family had to make do with the $350 a week his wife Erica brought home from her job as a mail clerk for the I.R.S.
“We just kind of wing it every month,” said Mr. Vories, whose unemployment benefits ran out at the end of 2013, 10 months after he lost his job answering phones at Fidelity Investments. Ever since, the family’s income has bounced up and down from one week to the next, like the basketball he and his two sons play with in their driveway, next to the Kentucky Wildcats pennant planted in their front yard.
“Get all the bills paid,” he said, “then see where we’re at.”
The financial volatility that the Vories grapple with is a feature of life for millions of workers whose paychecks fluctuate with the season, an hourly schedule or the size of a weekly commission.
Income variability is difficult to quantify, but studies that try to measure it suggest that ups and downs in income, particularly among the poorest 10 percent of American families, started to rise in the 1970s, leveled off in the early 2000s and then increased significantly again when the recession started.
A 2012 study by Daniel Sichel, an economist at Wellesley; Douglas Elmendorf, director of the Congressional Budget Office; and Karen Dynan, who now heads the Treasury Department’ Office of Economic Policy, found that “household income became noticeably more volatile between the early 1970s and the late 2000s” despite a period of increased stability throughout the economy as a whole.
A more recent national survey by the Federal Reserve, based on 2013 data, suggests the problem has not only persisted as the economy recovers but may even have worsened. More than 30 percent of Americans reported spikes and dips in their incomes. Among that group, 42 percent cited an irregular work schedule; an additional 27 percent blamed a span of joblessness or seasonal work.
The data show “a clear upward trend in income volatility,” according to a report from U.S. Financial Diaries, which is releasing on Wednesday the first results of an in-depth study of low- and moderate-income families.
In the Diaries’ research, nearly all of the 235 households studied experienced a drop in monthly income of at least 25 percent in a single year. The main culprits were reduced work hours, health problems and shifts in household size, like a needy relative coming to stay.
“Low pay is also unsteady as well,” said Jonathan Morduch, who oversees the diaries’ project. “This is a hidden inequality that often gets lost.”
That strain explains why more than three-quarters of those surveyed said financial stability was more important than moving up the income ladder.
“When you have that extra, you tend to spend more,” said Christine Chavez, a 27-year-old single mother who works for a collection agency in Bakersfield, Calif. “And when the next month comes, that extra isn’t there.”
Such insecurity sabotages the most diligent efforts to budget and save for the future and is a pressing issue for many families here in the Kentucky suburbs stretching south from Cincinnati, where corporations like Toyota, Procter & Gamble, General Electric, DHL and Fidelity run a lot of back-office operations. Amazon has seven distribution sites. EBay recently opened a fulfillment center in nearby Walton, and hired about 2,000 seasonal workers at $12 an hour.
Talia Frye, director of Brighton Family Center, a nonprofit agency in Newport, said the availability of full-time work had shrunk sharply since the 2008 financial crisis hit. “They might even be able to get a 12-, 13-, 14-dollar-an-hour job at an Amazon, or an eBay,” she said. “It’s income; it’s just not sustainable income.”
Of the more than 6,800 households that sought emergency help from Brighton last year, 71 percent had worked at some time during the year, Ms. Frye explained on a recent morning. Tables in the lobby were piled high with boxes of pizza donated by Little Caesar’s, and a neat pantry down the hall was stocked with jars of peanut butter, boxes of macaroni and cheese, cans of tuna fish and a freezer full of meat.
“They work hard,” Ms. Frye said, “and they still come up short.”
Across the country, nearly seven million people working part time would prefer full-time jobs but can’t find them. While their numbers are down from the peak a couple of years ago, these involuntary part-timers still account for 4.5 percent of the labor force, compared to an average of 2.7 percent before the recession.
Here in northern Kentucky, the Vories not only turned to the Brighton Center for food, they also applied for federal mortgage assistance, timed payments to grace periods, borrowed from family and relied on their church and friends.
They reluctantly cashed in Mr. Vories’ 401(k) retirement account, absorbing the 10 percent penalty in return for a much-needed $4,500. And they borrowed a total of $2,500 from their bank at a 10 percent interest rate.
“You think, ‘How can you afford that?’ ” Mr. Vories said, “but because it’s getting our bills paid, you do.”
None of that was necessary when Mr. Vories was steadily earning $425 a week. Fidelity matched his weekly 401(k) contributions and offered good health insurance that covered most of the medical bills from 9-year-old Caleb’s severe ADHD and 6-year-old Josh’s mild autism.
They could afford the occasional night out with dinner and a movie. He was a few months away from the seven-year mark and a bump up in pay and vacation days, when he lost his job in February 2013.
Over the next 10 months, Mr. Vories said he applied for 75 jobs. Nothing.
Last December, he received a letter promising a three-month extension of his unemployment insurance, so he and Erica bought Christmas presents for the boys, a little Fender guitar for Caleb, and a drum set for Josh. But then congressional Republicans and Democrats deadlocked and no extended benefits were approved.
The take home pay for Ms. Vories, 34, took a hit because she had to buy health insurance for the family. She signed up for a higher-paying night shift from 10 p.m. to 6:30 a.m., hoping to make up for the unexpected loss of her husband’s unemployment insurance check. Despite the extra $250 a month, she had to stop after five months.
“You’re basically a zombie,” Ms. Vories said. “I saw the boys basically on Saturday, and you’re just playing catch-up.”
They reduced their church contributions. During the winter, they turned the heat down to 64 degrees. “We had one little space heater, and we would take it to whatever room we were in,” Mr. Vories said.
Still, the bills piled up. “We would get one week behind, then we would get two weeks behind, then three weeks behind,” Mr. Vories said.
Mr. Vories’s job with the I.R.S. during tax season brought home $375 a week, but it lasted only six weeks. Thanks to help from the Hardest Hit Fund, a temporary federal mortgage assistance program, they avoided losing their home.
They kept the house, but didn’t have enough money to fix the central air-conditioning that quit right before the temperature shot past 90 degrees. They closed off the family room downstairs because of the sweltering heat. Parishioners at their church lent them a couple of window units.
A few weeks later, the Vories’s 2002 Toyota Corolla quit on their way back from a church tent revival meeting. With only one car, Ms. Vories had to stop working the early shift, which had allowed her to be home in time to meet the school bus. Mr. Vories’s mother pitched in to babysit.
In September, Mr. Vories stopped by LaRosa’s pizzeria, where he got his first job at 15, washing dishes after school. He was overjoyed to hear they needed a delivery driver.
But then in mid-October, as they we were driving home from visiting family, their Nissan van was totaled in a car accident. It was a heartbreak, because they had just poured in more than $1,000, given by Ms. Vories’s parents, in repairs.
“It just feels like money down the drain,” Mr. Vories said, shaking his head.
Proud of an above-average evaluation at the I.R.S., Mr. Vories said he was hopeful he would be rehired after the new year for seasonal work, which could ultimately turn into a full-time job.
In the meantime, Mr. Vories is delivering pizzas, using his parents’ Mercury Grand Marquis.
[by Patricia Cohen, writing for The New York Times]
As always, posted for your edification and enlightenment by
NORM ‘n’ AL, Minneapolis