Earnings have grown significantly more volatile since the 1970s. Up and down paychecks make it difficult to manage household finances and plan for the future. But not everybody has experienced this instability.
Earnings volatility varies dramatically by industry, according to new research by AEI Research Fellow Mike Strain. Perhaps not surprisingly, the least stable industries provide the least stable earnings, passing off risk to employees by changing their hours, wages, and benefits. So how stable is your employer?
Jobs in the management industry top the list for providing predictable and consistent earnings. For those not on the management-track, transportation, food services, and manufacturing provide relative consistency. Conversely, construction provides the least stable earnings, followed closely by administrative and real estate jobs.
Across all industries, low-income workers have experienced the greatest earnings volatility from their employers, experiencing twice the volatility of their higher-paid counterparts, according to Strain. Strain goes on to prove how earnings instability is responsible for nearly one-third of the income inequality over the last thirty years. Read Strain’s full paper here.
Industries with the Least Stable Earnings
(Sorted from Least Stable to Most Stable)
3. Professional Services
6. Real Estate
7. Wholesale Trade
8. Retail Trade
9. Health Care and Social Assistance
10. Finance and Insurance
13. Accommodation and Food Services
14. Transportation and Warehousing