PULLMAN, Wash. — Time, more than money, seems to matter if service-industry workers end up turning to so-called predatory lenders.
A study by researchers from Washington State University and Harvard University found that service workers’ unpredictable work schedules played more of a role in their dependence on debt costly than in their income. Service employees work in industries such as retail, restaurant, grocery, and hospitality, as well as delivery and order fulfillment. Many of the study’s sample members work for the nation’s largest retail employers, Amazon and Walmart.
“The experience of schedule volatility is quite common among service sector workers,” said Mariana Amorim, a WSU sociologist and lead author of the study in the journal Sociological Science. “We found that the more time volatility people experienced, the more likely they were to take expensive loans, such as those from pawnbrokers and automatic title lenders, or to use credit cards problematically. “
Amorim and co-author Daniel Schneider, a Harvard professor of public policy, analyzed data from 2017 to 2019 from The Shift Project that contains survey responses from nearly 40,000 service workers across the United States. and wait staff, the group also included people in high-paying positions, such as managers with incomes over $75,000 a year and more stable salaries.
Although worker income level is a key predictor of high-cost loan use, the unpredictability of timing has a greater impact on high-cost loan use. In fact, schedule unpredictability showed a strong association with the use of high-cost loans among service workers, regardless of income levels and experiences of income volatility.
“We really found little evidence that this is just a money story. There is a time component that is independently important,” Amorim said.
While the data cannot reveal why schedule volatility was so closely linked to high-risk debt, the authors point to other research that shows fluctuating schedules have effects on physical and mental health, which can interfere with decision making. Additionally, people with unstable schedules often have to rely more on family and friends for things like childcare, and if they’ve strained those social supports, they may need to look elsewhere for help. financial assistance.
Moreover, the simple fact of the atypical working hours of these employees can make it difficult to access traditional banks or public assistance. Both of these systems also take a long time to navigate, Amorim said, at least compared to high-cost lenders. She is currently preparing a qualitative study with a sample of workers to explore the reasons for this link.
The current study looked at several types of schedule unpredictability, including daily or weekly shift changes, lack of change notice, being “on call,” and shift cancellations. Most workers in the sample had experienced at least two types of schedule volatility in a month.
Neither government assistance nor the “hardship loan” programs offered by some employers have had much of an impact on workers’ reliance on high-cost debt. Amorim said these programs may be too difficult to access or fail to meet chronic needs.
Instead, the researchers recommended that employers and policymakers look for ways to give people more control over their time. They pointed to policies implemented by several places, including Seattle, Oregon State and New York City, that guarantee workers at least two weeks’ notice of their schedules.
After the pandemic lockdown, many retail businesses and restaurants struggled to fill jobs that are now reopened, even as they raise wages to attract workers. Amorim suggested they could also look at the scheduling factor, as service workers who have lost their jobs may be reluctant to return to chaotic work schedules.
“We tend to think that more money will solve all the problems. It can solve most of them, but not all of them,” she said. “There is this more invisible vulnerability that we have to think about in terms of quality of life, decisions and relationships, which money alone cannot solve. It’s more about the importance of time.