Financial Stress Takes a Toll on Gen Z
To cope with financial challenges, Gen Z hourly workers are more inclined to use on-demand pay apps. About 20% of Gen Z hourly workers rely on such apps to access money for bill payments, while only 8% of Millennials and 6% of Gen X workers do the same.
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In spite of a decrease in inflation, a significant number of Gen Z hourly workers are grappling with financial challenges, struggling to pay bills on time, and facing adverse effects on their well-being according to PR Newswire.
A recent study commissioned by Funding Our Future and DailyPay, conducted online by The Harris Poll, reveals that 85% of the hourly workforce in the U.S. feel that inflation, currently at approximately 3%, has negatively impacted their financial situation in the past year. Consequently, a staggering 93% of hourly workers find managing their finances to be a source of stress, with 71% stating that this stress has taken a toll on their mental and physical health. Additionally, 42% admit to saving less money compared to the previous year.
The financial stress experienced by hourly workers is particularly pronounced among younger individuals. While 61% of Gen X hourly workers report struggling to pay bills on time due to financial constraints, this number rises to 79% for Gen Z and 76% for Millennials. Furthermore, 19% of Gen Z hourly workers resort to payday loans to handle their bills, a significantly higher proportion compared to only 6% among Gen X.
To cope with financial challenges, Gen Z hourly workers are more inclined to use on-demand pay apps. About 20% of Gen Z hourly workers rely on such apps to access money for bill payments, while only 8% of Millennials and 6% of Gen X workers do the same.
Lettie Nocera, Senior Manager of the Funding Our Future coalition at the Bipartisan Policy Center, emphasizes the need to address the financial stress experienced by the youngest members of the labor market, as it can negatively impact their well-being and future financial security. Stacy Greiner, Chief Operating Officer at DailyPay, agrees that on-demand pay apps offer a valuable solution, providing financial flexibility to hourly workers and reducing reliance on predatory options like payday loans.
According to the survey, 40% of hourly workers express a desire to be paid more frequently at their jobs, while 19% would consider changing employers to access daily pay options. Gen Z hourly workers, in particular, show a greater interest in flexible payment strategies, with 50% indicating a need for more frequent pay and 32% willing to switch jobs for daily access to wages. The data underscores the importance of providing hourly workers with more financial options to meet their needs effectively.
Noumaan Faiz, (he/him) is a journalist and entertainer from Hayward, CA who covers culture and entertainment.
Edited by Nykeya Woods