A new study from the Economic Policy Institute shows that family income has become increasingly volatile in the past 35 years. In other words, we're facing more up-and-down swings than a generation ago.
Researchers Jacob Hacker (professor of political science and resident fellow of the Institution for Social and Policy Studies at Yale University) and Elisabeth Jacobs (a fellow in the Multidisciplinary Program on Inequality & Social Policy at Harvard University) have this to say:
Recent analysis shows that families are facing much greater income swings than they did a generation ago. The Chart plots the increase in average family income volatility, showing various peaks and valleys around an upward trend since the mid-1970s. Over the last three decades, volatility by this measure has doubled.
Most Americans have little in the way of easily tapped wealth to tide them over when their incomes drop. It is on the downward trips of the economic roller coaster that jobs, houses, savings, and other things gained on the way up get lost. No wonder Americans are worried about their economic security.
They also put together this nifty chart, which is a little hard to read in this format. Here's a link to the site, which has magnifying glass icon that allows you zoom in.
I'm really excited to find this volatility documented, because it confirms what I've suspected in talking with friends and neighbors. Everyone seems to have a layoff story, and it rarely comes complete with a happy ending.
After they were laid off, people are getting lower-paying jobs, or the family as a whole is required to spend more hours working. By this, I mean that if one parent was staying home with kids, after they layoff they are forced back into the work force.
This bothers me because I suspect -- but can't yet prove -- that the self-same people who argue for "traditional" American values, like a mother staying home to raise children, would also champion corporate America's freedom to downsize at whim.
The boss who laid off my husband in 2001 was a father of three preschoolers. He liked to joke that he had never changed one of their diapers in his life.