How Inflation is Impacting the Daily Lives of American Workers

Record-high gas prices are contributing to employee financial woes

With the national average cost of regular gasoline reaching record highs of $5.01 per gallon, this increased financial burden affects employees’ ability to fill their tanks and get to work.¹ According to the American Automobile Association, minimum wage workers filling a 12-gallon tank may be spending almost a day’s pay on gasoline.² The results from the Harris Poll survey show that 81% of employees said that allocating extra funds to transportation is affecting their ability to cover other expenses. Nearly half of hourly employees (49%) of employees reported difficulties paying for their groceries, while 40% struggled with utility bills and 34% had a hard time covering rent or making mortgage payments. 

In order to navigate the rising cost of gas and other financial challenges, 22% of employees surveyed took out a payday loan in 2022. These struggles are further exacerbated by the fact that 35% of all hourly workers report receiving no pay increase over the past year, and this figure increases to 49% for hourly workers with an annual household income of under $50k. 

Because of the stress all of this has caused, 77% of employees surveyed reported a negative impact on their health. Financial stress can cause anxiety, fatigue, muscle pain, appetite changes and more.³ 

Inflation and its after-effects can also be emotionally disempowering for workers, as it may cause them to lose agency over their own financial well-being. Also, almost half of employees in a survey conducted by PwC reported that financial stress has become a distraction at work.³ Many concerned employers have raised questions on what can be done to help relieve some of the financial and emotional burdens inflation is placing on their employees.⁴

Employers can support their workers despite inflation

Employers have many options to empower their employees through this record-breaking period of inflation. Since offering employees raises is not always financially sustainable or the most impactful solution, employers can provide support in other ways, such as offering useful financial wellness benefits.⁵ Not only will staying attuned to employees’ shifting needs help strengthen the employer-employee relationship,⁶ implementing alternative financial wellness solutions may also help employees fill their gas tanks and get to work. 

Offering on-demand pay may be an impactful way to help employees feel more in control of their finances. In a study conducted by DailyPay, it was discovered that this technology can save employees up to $1,205 per year in late fees, overdraft fees and payday loan fees, freeing up those funds to help them cover other expenses.⁷ Not only does DailyPay help users become more financially stable, it can also increase employee tenure by up to 73%, according to a study from the Mercator Advisor Group, commissioned by DailyPay.⁸ This mutually beneficial benefit may help improve financial wellness for both employers and their employees.

Want to learn more about how DailyPay can be a resource for your employees during periods of high inflation and beyond? Our dedicated specialists are here to help.