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 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 attempt 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, but then increased significantly again
during the recession.
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 recovered
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.
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