Although unemployment is low, jobs are plentiful, and by most accounts the US economy is in good health, CareerBuilder’s latest survey of the financial state of the US workforce paints a more troubling picture, finding that 78 percent of Americans are living paycheck-to-paycheck at least some of the time—that’s up from 75 percent in last year’s survey. Some of the more detailed findings include:
Thirty-eight percent of respondents said they live paycheck-to-paycheck sometimes, but 17 percent said they usually do and 23 percent said they always do.
- Women are more likely to live paycheck-to-paycheck (81 percent) than men (75 percent).
- One quarter of workers have been unable to make ends meet every month in the last year, and 20 percent said they had missed payment on some of their bills.
- Seventy-one percent said they were in debt, up from 68 percent last year, and more than half of those in debt believe they will never get out of it.
- Thirty-eight percent do not participate in a 401(k) plan, IRA, or other retirement plan, and 26 percent said they had not set aside any savings each month in the last year.
- Most workers (81 percent) had worked a minimum-wage job at some point, and 71 percent of them said they had not been able to make ends meet during that time.
And while low-income workers are relatively more likely to live paycheck-to-paycheck, they are by no means the only ones doing so, CareerBuilder notes—meaning even employers of well-compensated professionals should not ignore the financial wellness concerns of their employees:
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The student debt crisis is widely considered a generation-defining issue for American millennials. At the same time that college degrees are more of a requirement in the job market than ever before, they have become so expensive that some experts have questioned whether they are even worth the money anymore. Bucking the conventional wisdom on this subject, William G. Bowen and Michael S. McPherson chime in at Vox to dispute the claim that most college graduates are drowning in debt, along with some other oft-recited assertions about this issue. The real problem, they argue, is that many students are failing to graduate:
Powerful new data from the US Treasury department makes clear that the people who are most likely to get in trouble with debt are those who dropped out of college before they earned a credential, and who therefore have weak job prospects. Often they have borrowed relatively little money but have few resources and no doubt little enthusiasm for repaying what they owe. Dropouts are almost three times as likely to default on their loans as graduates are. It is this subgroup’s debt that ought to be driving the conversation, not the debt of the “average” college student. …
We’ve been hearing a lot lately about employers introducing student loan benefits into their rewards packages. With recent college graduates struggling under an unprecedented load of student debt, programs that help them reduce their debts by thousands of dollars seem like an obvious win-win for employers with young workforces. Student loans aren’t the only form of debt that employees could use help paying off, however. “Worried about their financially strapped workforce,”Rachel Emma Silverman writes at the Wall Street Journal, “a handful of companies are stepping in to offer employees alternatives to payday loans and other expensive financial products”:
Some 12 million Americans use payday loans each year, according to Alex Horowitz, senior research officer with the Pew Charitable Trusts’ small-dollar loans project. Retirement borrowing remains common, too. According to the Employee Benefit Research Institute, 20% of all eligible 401(k) participants had loans outstanding against their 401(k) plan accounts at the end of 2014, up from 18% in 2008.
As an alternative, employers are joining with firms such as Kashable LLC, Ziero Financial Inc. and Zebit Inc. to help fund and service loans. Some companies are offering those products in conjunction with employee-focused seminars about saving, budgeting and debt.