The Atlantic

The Power of Predictable Paychecks

Even people in the middle class can worry as much about month-to-month swings in income as they do about their annual earnings.
Source: Rick Wilking / Reuters

While it’s well documented that income inequality and wealth gaps have been widening in the United States, there is another sort of economic inequality that is just as worrisome but harder to see. It has less to do with the total amount of money that people have, and more to do with how that money moves through their lives: Increasingly, financial stability is only enjoyed by a few.

This type of inequality lurks underneath the reams of official economic data that’s regularly collected and widely reported. It’s about whether workers can reliably predict the size of their next paycheck, how much of a financial cushion they can build, and whether or not they can do something as simple as set up automated bill payments without worrying about overdrafting or making ends meet.

As we undertook a study of Americans’ household finances, we came to understand how this instability manifests itself. For the study, called the U.S. Financial Diaries, we followed 235 low-income and moderate-income households that had at least one working member, tracking every dollar

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