Report: More Workers Face Unstable Earnings and Wages

Report Proposes Reforms to Cushion Income Volatility Shocks

New York, NY—Many part-time or “gig economy” workers are struggling to get by on unstable earnings and wages that vary significantly from week to week or month to month. New data on earnings instability and income volatility in the years during and after the Great Recession reveal that the problem is much worse than commonly understood, according to a new report published today by The Century Foundation in collaboration with the National Employment Law Project.

“Many workers today can no longer count on a steady 40-hour-a-week job,” said Andrew Stettner, senior fellow at The Century Foundation and report co-author. “Our report finds that economic insecurity is touching Americans from all backgrounds, whether they are working or not. Given the changes happening in our economy, it’s past time for our safety net to evolve to find new ways to help cushion the shock of income volatility.”

The report, A New Safety Net for an Era of Unstable Earnings, takes a deep-dive look at earnings in the years during and after the Great Recession, with an original analysis of census data from the Survey of Income and Program Participation. The analysis focuses on month-to-month earnings of primary earners (breadwinners) in a representative sample of U.S. households. It finds:

  • Primary earners in three out of five families experienced a month-to-month earnings drop of at least 50 percent at some point between 2008 and 2013.
  • A typical worker’s earnings were extremely variable during this period. The average month-to-month variation for an individual earner was $2,300 to $2,600.

The analysis goes further with a first-ever use of the Gini coefficient (typically used to measure inequality between families) to instead measure the extent to which an individual’s own earnings are unequal from month to month. It finds:

  • Earnings volatility is strongly related to household hardship. Workers with the most volatile earnings are 31 percent more likely to experience poverty than those with stable earnings, and holding other factors constant, are 14 percent more likely to need some form of means-tested public assistance.
  • Those broadly working in the nonstandard workforce or “gig economy” have earnings that are nearly two times more unequal than standard workers.

The report seeks to expand the conversation about the type of earnings insurance that could be provided to workers experiencing volatility in hours and wages through the unemployment insurance system, the nation’s first responder to economic distress.

George Wentworth, senior counsel at the National Employment Law Project and report co-author, said: “The nation’s unemployment insurance program was generally designed to provide partial wage replacement for traditional workers who involuntarily lose full-time employment until they find another full-time job. But today, millions of Americans are trying to make ends meet relying on part-time jobs and ‘gig economy’ work with hours and wages that are uncertain from week to week. The unemployment insurance system can and should work better for those people who are working hardest to get back up the economic ladder.”

The problem of underemployment is growing. Last week, the Economic Policy Institute published new research by Penn State economics professor Lonnie Golden that found the number of Americans involuntarily working part-time has increased by 44.6 percent since 2007.

Today’s report, co-authored by TCF’s Stettner and Michael Cassidy, and NELP’s Wentworth, details three primary recommendations to reform and expand the nation’s unemployment safety net to better address the needs of underemployed workers:

  • Improve partial unemployment benefits to cover more workers whose hours are cut from full-time to part-time, or who take part-time jobs after losing full-time work.
  • Introduce a new program of “schedule insurance” based on the successful work-sharing program which experienced dramatic growth during the recession. Schedule insurance would enable employers who commit to full-time scheduling to provide their employees with prorated unemployment insurance benefits to partially compensate for lost wages associated with a schedule change.
  • Extend unemployment benefits to freelance workers through a pilot program that would enlist entrepreneurial support programs to help distressed freelancers.

A New Safety Net for an Era of Unstable Earnings


The Century Foundation is a progressive, nonpartisan think tank that seeks to foster opportunity, reduce inequality, and promote security at home and abroad. For more information, visit

The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed workers. For more about NELP, visit

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