iTHINK Financial logo

Jobs That Come With Variable Income

Here we take a closer look at some of the jobs most commonly affected by this inexorable trend toward part-time and contract work.

A man enters his PIN to make a transaction in a shop.

A couple of generations ago, stable, full-time employment was the norm. And it was a pretty cozy arrangement: You found a good job at a solid company, you worked there 40 years, then you collected a gold watch and a full pension on your way out the door.

Today the landscape is almost unrecognizably different. Part-time jobs have exploded in number. Job-hopping, rather than a career in one place, is the norm. Contract workers or freelancers now perform millions of jobs once filled by salaried employees.

These changes have helped companies become more efficient and stay competitive globally. Yet they've been a mixed bag for workers. Wages have been stagnant for not just years, but decades. According to Pew Research, today's hourly wage has the same purchasing power as it did in 1979, adjusting for inflation.

Meanwhile, the move from full-time salaried staff to part-time and contract workers has created income variability on a large scale. Millions of workers today must also find their own insurance and fund their own retirement, thanks to fundamental changes in the economy.

With that said, let's take a closer look at some of the jobs most commonly affected by this inexorable trend toward part-time and contract work.

The Problem With Part-Time Employment

For some people, the flexibility offered by part-time work is ideal. Yet for those who are attempting to replace a full-time job by cobbling together several part-time gigs, the situation may be highly stressful.

According to data collected by federal officials, people in the U.S. who work part-time jobs are five times more likely to live in poverty. Additionally, the number of people working part-time jobs because they can't find full time work has skyrocketed since 2007, going from slightly more than four million to well over seven million.

Part-time jobs, by their nature, often lead to income instability. That, in return, can create a self-reinforcing financial cycle that's hard to escape.

Two industries that rely heavily on part-time labor are restaurants and retail shops. Restaurants add another layer of complexity, as many of the workers in this industry rely on tips to supplement their wages. Given the unpredictable nature of restaurant scheduling, the variability of tips can complicate a worker's ability to budget and save.

Retail workers, perhaps more than any other group, must contend with problematic scheduling practices. The widespread use of on call scheduling reduces the number of guaranteed hours available to workers, and compromises their ability to make plans.

Freelancers of all stripes are also subject to the perils of variable income. Because the pool of available work may fluctuate considerably, these workers must shoulder added responsibility in terms of saving and budgeting.

The Bottom Line

The "Gig Economy" and part-time jobs are poised to grow even more widespread in the years ahead. This means that the problem of variable income will become even more acute.

If you're one of the millions of workers in this situation, it's imperative that you take steps to protect yourself -- and that's something we're going to delve into as we explore this week's topic.