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Fluctuating income is detrimental to health

A new study published in the Journal of Applied Psychology has found that gig workers, salespeople, and other workers who rely on volatile, fluctuating income often experience worse physical health outcomes, including poor sleep, headaches, stomach issues, and back pain.

“Pay volatility seems to predict worse health outcomes across a wide range of incomes,” said study author Gordon Sayre, an assistant professor of Organizational Behavior at Emlyon Business School in France. “Not only was pay volatility related to worse health in lower-paid tipped jobs or among freelancers in the gig economy but for higher-paid professionals working in finance, sales, and marketing, where commissions and performance bonuses are common.”

In one study, 85 U.S. workers relying on tips, such as waiters, delivery drivers, or maids, filled-in daily surveys for two weeks regarding their total daily pay and health. The analysis revealed that large fluctuations of daily pay over the study period was associated with negative health issues and poor sleep quality. This relationship was stronger when volatile pay made up a larger percentage of the workers’ total pay.

Another three-weeks study included 375 U.S. participants who spent an average of 29 hours per week working Amazon’s Mechanical Turk, a website where individuals have to complete a variety of tasks for minimal amounts of pay. In this case too, those with larger fluctuations in their pay experienced the worse health outcomes.

Finally, Sayre conducted a three-month online survey of 252 higher-income employees in finance, marketing, and sales who relied on commissions or bonuses for a fraction of their income. The results showed that pay volatility was less harmful to health when the participants were less reliant on commissions and bonuses.

These findings suggest that businesses should consider whether volatile forms of pay are necessary and ensure that more stable forms of compensation make up a larger part of employees’ total income. 

“Unions are another way that workers could secure stronger protections against volatile pay. Raising the proportion of base pay and reducing dependence on volatile pay should help protect workers’ health in many industries,” Sayre concluded.

By Andrei Ionescu, Staff Writer

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