Not only are average incomes (as measured by either real median household income or real average incomes of the bottom 90 percent) in the United States falling. Economic insecurity has shown an upward trend.
One way to see this growth in economic insecurity is with the Economic Security Index, which measures the share of Americans who experience a major drop (say, 25 percent) in their available family income and who lack an adequate safety net.
Another way is via the U.S. Financial Diaries, a study in which researchers collected detailed financial data from more than 200 low- and moderate-income U.S. households over the course of a year. One of their research notes, “Spikes and Dips: How Income Uncertainty Affects Households,” provides a glimpse of how the current U.S. economy creates considerable financial insecurity for many Americans.
The Taylors (not their real names) are one example of the uncertainty and insecurity American workers increasingly face:
The Taylors experience a great deal of variability and uncertainty in their incomes. Molly and Dustin Taylor are a Northern Kentucky couple in their mid-30s with a seven-year-old daughter, Caitlin, and an 11-year-old foster son, Jesse. Dustin works odd jobs and scraps metal and electronics for cash; health problems make it difficult for him to work a steady job. Molly works in the cafeteria at a local elementary school; she earns a relatively consistent amount during the school year, but she does not earn income over the summer. The family receives food stamps and SSI benefits because of Caitlin, who has cerebral palsy. They receive regular financial help from Dustin’s mom, including free rent and utilities in a home that she owns. Molly and Dustin also share resources, including funds from food stamps and SSI, with family and friends: for example, Molly occasionally gives the EBT card on which the family receives food stamps to her parents to take to the grocery store, with the understanding that they will later pay her back in cash.
The Taylors’ total monthly income varies within a wide range – from as little as $1,390 to as much as $4,560 per month. Molly’s wages from her hourly job provide a baseline income that is relatively consistent at $1,000-1,400/month (beginning in November 2012…). Additional income comes from SSI and food stamps, which generally bring in around $800/month. Dustin’s occasional earnings, resources received from family and friends, and bingo and lottery winnings regularly feature in the family’s income statement, in varying amounts. For the Taylors. . .every month is different when it comes to income.
Although the Taylors manage to cover expenses each month, they are living precariously. Food stamps and disability payments are a crucial component of their budget, but when Molly can’t get to the benefits office for her monthly appointment to get recertified – which happened one month when the family car broke down and they couldn’t afford to fix it right away – funds can arrive later than expected. The Taylors are heavily dependent on Dustin’s mother for resources, including rent and utilities as well as things like school supplies, and they also rely on Molly’s parents and other family members, with whom they have an ongoing exchange of food stamps via sharing of benefits debit cards.
The need for multiple jobs and multiple sources of pay and benefits (both financial and in-kind), with widely fluctuating incomes and difficult decisions about what things they can buy and which bills they can pay—unfortunately, that’s the kind of uncertain, precarious existence the U.S. economy currently imposes on a growing number of American workers.