A new report offers a first-ever glimpse into the financial health of workers in low-wage jobs revealing that many struggle with savings, insurance coverage, and paying for basic living expenses.
The Financial Health Network has released the Financial Health of Workers in Low-Wage Jobs Report, offering a rare glimpse of workers earning less than $17.00 an hour or up to an annual salary of $35,360. Key findings show that workers in low-wage jobs struggle with savings, adequate insurance coverage, and paying for essentials like housing and food.
In fact, though a vast majority (72 per cent) of low-wage workers are the primary household earners, nearly two-thirds (63 per cent) were found to be financial vulnerable, 24 per cent financially coping, and only 13 per cent financially healthy.
The report also offers a first-of-its-kind look into employment-related factors, such as benefits and the impact on workers’ financial health, revealing that workers in low-wage jobs who believe their employers help them improve their financial health are more satisfied and committed to their employer.
Spending and bill paying
- More than half (51 per cent) of workers in low-wage jobs report paying all of their bills on time compared to almost three quarters (72 per cent) of all workers
- Roughly one-third of workers in low-wage jobs reported having trouble paying their rent or mortgage (31 per cent), struggling to pay medical bills (32 per cent), or worrying about running out of food (37 per cent) in the 12 months before the survey
Short and long-term savings
- More than a third (36 per cent) of workers in low-wage jobs would be unable to cover one month of living expenses with savings.
- Two-in-five (40 per cent) workers in low-wage jobs report having zero dollars saved for retirement. More than seven-in-ten (73 per cent) have less than $10,000 in retirement savings.
- A vast majority of (70 per cent) low-wage workers report that they are not confident their households are doing enough to meet their long-term goals.
Health insurance coverage
- Only one-third (33 per cent) of workers in low-wage jobs receive health insurance coverage through their employers.
- More than half (52 per cent) of those not receiving health insurance from their employer say that they are not eligible.
- Nearly half (48 per cent) of workers in low-wage jobs who are eligible for employer-provided health insurance but do not participate say it is because of high costs.
“Workers in low-wage jobs are constantly under financial stress that takes a toll on many aspects of their lives,” said Beth Brockland, vice president of workplace solutions at the Financial Health Network. “Employers have a lot to gain by investing in the financial health of their workers, not only to improve workers’ well-being but to foster more engaged and productive employees.”
An estimated 53 million people in America between the ages of 18 and 64 work in low-wage jobs, 44 per cent of the entire workforce. One in five (21 per cent) workers in low-wage jobs say that their financial stress negatively impacts their performance at work.
In fact, these workers report spending an average of 1.3 hours per week dealing with personal finance-related issues when they are at work, a total of 66 hours per year of lost productivity. Such findings underscore the win-win nature of investing in worker financial health.