Homegold ivestingOver 8 in 10 hourly workers have had to cut back on other expenses because of gas prices: New survey
Over 8 in 10 hourly workers have had to cut back on other expenses because of gas prices: New survey
June 25, 2022
The effects of inflation and high gas prices are hitting hourly workers hard, a new survey finds.
Eighty-one percent of these workers report that higher gas costs have cut into their ability to pay for other things. Seventy-seven percent say that financial stress is impacting their health — and 22% report turning to payday loans this year to bridge the gaps.
These are “some really stark results” said Emerson Sprick, policy analyst at the Bipartisan Center, who helped oversee the survey, during a Yahoo Finance Live Interview on Thursday. He added that gas prices are “causing people to have to make real trade-offs in what they spend money on, between gas and groceries, between a car repair and health care.”
The most recent data from the American Automobile Association finds prices just under $5 a gallon across the U.S. Respondents to the survey report that the overall inflationary environment has led to struggles to pay a wide range of daily expenses like groceries, gas, utilities, and rent.
The data comes from a new Harris Poll released this week commissioned by DailyPay and Funding Our Future, an alliance of organizations dedicated to making a secure retirement possible for all Americans that is a partner of Yahoo Finance. This survey was conducted in May of 2,032 U.S. adults, 654 of whom reported being hourly workers.
The results show how the recent economic downturn has exacerbated the financial fragility long felt by many Americans. An oft-cited 2018 study from the Federal Reserve found that 40% of adults, “if faced with an unexpected expense of $400, would either not be able to cover it or would cover it by selling something or borrowing money.” More recent research has found that a third of working adults worry about their ability to pay for a financial curveball such as car repairs.
Meanwhile, in May the U.S. savings rate hit its lowest level since 2008, drying up as inflation outpaces wage increases.
This week’s survey also shows bigger challenges in saving for the future. Four in 10 hourly workers with a household income of less than $100,000 say they are saving less than last year or not at all. And 39% of all women who receive an hourly wage say they are saving less than last year.
“Women are bearing the brunt of a lot of these labor market dynamics,” Sprick says. “They’re being forced to balance work and other duties in a way that, in the aggregate, men just aren’t.”
Making ends meet
The survey also offers hints at where many poorer Americans are turning to make ends meet. Twenty-two percent of hourly workers report having taken out a payday loan this year, a figure that jumps to nearly one-third when just looking at 18- to 34-year-olds.
The organizers of the survey say employers can do more to offer things like on-demand pay as a benefit to help their workers avoid payday loans, which can charge exorbitant interest rates and have deleterious long-term consequences for a family’s financial health.
“To clear up a fairly common misperception, this isn’t about paying people in advance,” Sprick notes. “It’s just about paying people in a timely manner, ensuring that people have access to their wages as they’re making those wages.”
DailyPay, one of the organizers of the survey, offers on-demand pay products to employers.
Lawmakers in Washington are also trying to advance ideas to help Americans put aside money in an emergency savings account. However, those provisions are still being negotiated with any effects likely not to be felt until 2023 at the earliest.
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.
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