Recently, DailyPay enlisted Mercator Advisory Group to conduct a survey of 1,000 U.S. low-income (income less than $75,000/year) salaried workers to determine the value and propensity of this demographic to participate in an on-demand pay (also called earned wage access) solution.
While much has been done to study hourly workers and their vulnerability to financial stress, far less has been done to study salaried workers and how they react to the challenges imposed by unforeseen financial hardships in between paychecks.
This study revealed that, by introducing an on-demand pay benefit, employers can help their workforce reduce the stress associated with paying monthly bills. Most notable and relevant today, nearly half (46%) of those polled are stressed by having to pay monthly medical bills. Allowing workers access to their earned income provides them with financial flexibility, and empowerment over their pay reduces their stress and increases attendance and productivity at work, at no expense to the employer.
Access to their earnings, before payday, helps employees to avoid more financially adverse options when they need access to cash, including using credit cards, drawing down savings, incurring overdraft fees and resorting to payday loans — all which can lead to employees incurring high-interest rates, fees and penalties.
Key findings of the survey include:
- Nearly half (48%) of respondents reported having a shortfall between payroll cycles, at least sometimes
- 46% surveyed have difficulty paying medical expenses, at least sometimes
- About seven in 10 reached out to external sources for funding that often incur high fees; among these individuals, many are frustrated with high-interest rates (51%) and fees (26%) associated with borrowing this money
- 23% incurred an unexpected expense they could not pay
- Three in 10 report some difficulty in keeping up with monthly expenses
When presented with the option for an on-demand pay benefit, also called earned wage access, respondents saw the value in it and its ability to stop the cycle of debt. In fact, more than half noted they would also use the DailyPay platform to save money and become more fiscally responsible.
- 34% responded that they would either “definitely use” or “probably use” DailyPay if it were offered to them.
- When asked about services that could be replaced by DailyPay, respondents indicated the same potentially financially draining options that they reported using to obtain extra money to pay a bill, including check-cashing services, payday lenders and credit cards.
- 52% noted they would use the “Save” feature that is unique to the DailyPay platform. The “Save” feature allows Daily Pay customers to put away money for future bills and expenses before they even get paid.
Data collected in this survey reveals the critical need for on-demand access to earned pay that Americans face in typical economic times. Imagine how much more access to earned income has meant to workers during the COVD-19 pandemic.
You can review the full study here, DailyPay and the Mercator Advisory Group discussed the results of this survey during a joint webinar. Watch the webinar on-demand here.