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Alice N. Sanders in US Markets,

How many Americans are struggling with income volatility — whether they’re rich or poor

JOEL NITO/AFP/Getty Images

More than one-third of households experienced an annual 25% or more change in income from 2014 to 2015.

The stock market’s up-and-down ride has grabbed breathless news coverage this month, with the Dow Jones Industrial Average DJIA, +0.08%   suffering its biggest one-day drop since 2008 followed by a rebound this week. But many Americans are far more familiar with another kind of roller coaster: Income volatility. The term refers to monthly and annual dips and jumps in income that families experience. It’s not an issue that gets a lot of attention in news about the country’s economic health, but it’s common: More than one-third (34%) of households experienced a 25% or more change in income year-to-year between 2014 and 2015, according to an analysis by the Pew Charitable Trusts, a Philadelphia-based think tank. “When we think about how the economy is doing broadly, there are big topline numbers we see, whether it’s GDP or the unemployment rate, that may not explain what’s happening at the household level,” said Clinton Key, a research officer at Pew. “There’s one economy we all share and there’s also 160 million household economies — and they don’t all go in the same direction.”
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