U.S. Hourly Workers' Emergency Savings are Limited
- Workforce payments platform Branch recently surveyed hourly workers in the United States about their financial situation.
- The survey determined that 83% of workers had less than $500 in their emergency savings, and 48% had none.
- Many workers had little to no savings because of the rising gas, food, and rent costs.
Workforce payments platform Branch recently conducted a survey asking hourly workers in the United States about their financial situation. The purpose of this survey was to determine how well off these hourly workers are in the midst of the current economic climate, and the results were startling.
In this survey, 3,000 people were asked about their financial situation. The participants were asked about the current economic situation and how they are struggling. Once the survey was conducted, it was determined that 83% of hourly workers had less than $500 in emergency savings, while 48% said they had none.
The latter value is higher by 7% compared to the 2021 survey, which was that 41% of the respondents did not have any money left to put aside in emergency savings. In a statement, Branch CEO Atif Siddiqi said, "Even with higher wages, rising costs of essential expenses have created additional obstacles and setbacks for hourly workers looking to establish greater financial security.”
Furthermore, in the same survey, respondents were asked what they would do if they received a $1,000 bonus from their place of employment. 40% of those surveyed said they would use their bonus to pay down debt. The statistics produced by this survey showcase how a significant portion of the labor workforce is struggling to pay for basic necessities.
Why Many Hourly Workers Have Little Emergency Savings
When asked what the main causes were behind these workers having little to no money set aside, they mentioned that rising food, gas, and living costs have made it more difficult. Surging inflation has caused food, gas, and living expenses to increase over the past year.
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Consequently, these rising expenses are the main reason why many hourly workers are struggling with putting money aside for emergencies. Since the COVID-19 pandemic started, the cost of living has continued to rise due to inflation
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As the majority of hourly workers earn close to minimum wage, it becomes difficult for them to have high disposable income, despite 78.6% of companies raising wages. Moreover, when more money is spent on essential expenses, there is less disposable income left over, making it difficult to save money when emergencies arise.
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How to Improve Your Financial Situation
No one wishes to be in a financial situation where they cannot put money aside for when they need it. As a result, one of the best ways to improve your financial situation is by trying to search for a new job that requires a skill set you possess.
Typically, jobs requiring some experience and a specific skill set will pay a higher wage to attract applicants. Therefore, if you are unhappy with your current job, begin looking for jobs around you that fit what you are looking for.
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Once you begin job hunting and possibly landing a job, you can start negotiating your salary. Typically, negotiation will allow you to receive higher pay. A significant increase in your salary can allow you to pay off debt, set money aside for emergencies, and invest to build wealth.
Recommended Read: How to Negotiate Your Salary Via Email
The Money Wrap-Up
It is disappointing to see such a large portion of hourly workers feel they do not have money to pay for their living expenses. With the cost of living rising due to the current economic conditions, if a person feels they cannot keep up with the higher expenses, one possible course of action would be to begin searching for opportunities that pay more. By receiving access to higher pay, one can begin improving their financial position as they will have more disposable income.
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