Strategic HR

Financial Wellness: Majority of U.S. Workers are Living Paycheck to Paycheck

Have you implemented a financial wellness program at your company? If not, you may want to consider it as more than three-quarters of workers (78%) report that they are living paycheck-to-paycheck to make ends meet.

financial wellness

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According to new CareerBuilder research, the number of people who report living paycheck to paycheck has risen—up from 75% last year. The research also shows this is a trait more commonly found in women than men—81% vs. 75%. Thirty-eight percent of employees said they sometimes live paycheck-to-paycheck, 17% said they usually do, and 23% said they always do.

The national survey, which was conducted online by Harris Poll on behalf of CareerBuilder from May 24 to June 16, 2017, included representative samples of 2,369 full-time employers and 3,462 full-time U.S. workers across industries and company sizes in the private sector.

More Money, Less Financial Headaches?

Having a higher salary doesn’t necessarily mean money woes are behind you, with nearly one in 10 workers making $100,000 or more annually (9%) saying they usually or always live paycheck-to-paycheck and 59% in that income bracket report being in debt. Twenty-eight percent of workers making $50,000 to $99,999 annually usually or always live paycheck to paycheck, 70% are in debt; and 51% of those making less than $50,000 usually or always live paycheck to paycheck to make ends meet, 73% are in debt.

“As an employer, your employees’ financial problems become your financial problems,” said Rosemary Haefner—Chief Human Resources Officer for CareerBuilder—in a press release. “If workers are constantly thinking about their financial struggles, their quality of work can decrease, and it can take a hit on their morale and productivity. If you do what you can to help people keep their finances under control—by doing things such as matching 401(k) contributions or hosting financial planning seminars—you’ll ease some of their financial worries and it will be less likely to have a negative impact on your business.”

Debt is a Growing Issue for Workers

A quarter of workers (25%) have not been able to make ends meet every month in the last year, and 20% have missed payment on some smaller bills. Further, 71% of all workers say they’re in debt—up from 68% last year. While 46% say their debt is manageable, more than half of those in debt (56%) say they feel they will always be in debt. And it should be noted that 18% of all workers have reduced their 401k contribution and/or personal savings in the last year, more than a third (38%) do not participate in a 401k plan, IRA or comparable retirement plan, and 26% have not set aside any savings each month in the last year.

Less than a third of workers (32%) stick to a clearly defined budget and a slight majority (56%) save $100 or less a month. Respondents who claim they save money each month and the amount her or she saves:

  • None: 26%
  • Less than $50: 15%
  • $51 to $100: 16%
  • $101 to $250: 14%
  • $251 to $500: 11%
  • $501 to $750: 5%
  • $751 to $1,000: 4
  • More than $1,000: 10 %

Still, despite financial woes, there are certain things employees aren’t willing to give up. When asked what they’d absolutely not give up, regardless of financial concerns, employees cited:

  • Internet connection: 54%
  • Mobile device (smart phone, tablet, etc.): 53%
  • Driving: 48%
  • Pets: 37%
  • Cable: 21%
  • Going out to eat: 19%
  • Traveling: 17%
  • Education: 13%
  • Buying gifts for people: 13%
  • Alcohol: 11%

Minimum Wage Workers Can’t Make Ends Meet

The majority of workers (81%) have worked a minimum wage job, and 71% of them were not able to make ends meet financially during that time—more than half (54%) had to work more than one job.

To alleviate some financial burden, 83% of employers that are hiring minimum wage workers this year (45%) will be raising the minimum wage at their organization.

Survey Methodology

This survey was conducted online within the U.S. by Harris Poll on behalf of CareerBuilder among 2,369 hiring and human resource managers ages 18 and over (employed full-time, not self-employed, nongovernment) and 3,462 employees ages 18 and over (employed full-time, not self-employed, nongovernment) between May 24 and June 16, 2017 (percentages for some questions are based on a subset, based on their responses to certain questions).

With pure probability samples of 2,369 and 3,462, one could say with a 95% probability that the overall results have sampling errors of +/- 2.01 and +/- 1.67 percentage points, respectively. Sampling error for data from sub-samples is higher and varies.