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Salary Finance Survey Reveals Harsh Reality of Financial Hardships Facing Vulnerable PopulationsDespite the rosy picture of economic recovery painted since the COVID-19 vaccines became available, many Americans have reached, or fallen over the edge of financial precarity - and, in a year where there was more of a spotlight on inequity and efforts to be more inclusive, the financial situation of the most vulnerable populations has become even starker, according to a new data study published today by Salary Finance, the leading global provider of financial education and salary-linked benefits for employees. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210506005457/en/ The number of American workers who don't have emergency savings has increased by 20 percent year over year, According to Salary Finance. (Photo: Business Wire) "Inside the Wallets of Working Americans, the Third Annual Salary Finance Report" reveals the findings from more than 3,000 American workers - about 2,700 of whom work for companies with more than 500 employees, as well as about 300 unemployed workers - and includes questions on ethnicity, sexual orientation, and disability status for the first time. In many instances, the data is troubling and demonstrates the widening chasm between groups:
Employee financial stress - amplified by COVID-19 - a destructive force on businesses Financial stress continues to quietly wreak havoc on employee productivity. Workers dealing with financial stress are nine times more likely to have sleepless nights, four times more likely to have their stress affect the quality of their work, five times more likely to not finish daily tasks, and four times likely to have troubled relationships with coworkers. It's a recipe for disaster for businesses. After financial stress spiked to nearly two-thirds of the working population in a study conducted by Salary Finance last summer, it has returned to early-2020 levels, hovering at 42 percent. As the pandemic worsened, so did the financial implications on households with a positive COVID-19 diagnosis. Nearly 60 percent of people with a positive COVID diagnosis in their household said they spent over $500 in healthcare costs as a result - and 40 percent spent over $1,000. It isn't simply the initial costs of care: more than 20 percent of the COVID-positive cohort said they still suffer from long-term side effects, and 20 percent lost household income due to contracting COVID-19. For many people, the pandemic created situations where a family member required a level of financial assistance. Of the 40 percent of workers providing financial assistance to a family member, more than 50 percent of people said those expenses had increased since the beginning of the pandemic; for 30 percent, it went up by more than $250 a month. Of those with children, over half said they had to reduce working hours to make childcare work. Long-term savings emerges as top financial priority for Americans As accommodations from creditors and lenders expire over the coming months, Americans are in dangerous territory when it comes to their savings buffer. In 2020, less than 50 percent of workers didn't have any emergency savings. This year that percentage skyrocketed to nearly 70 percent. Further accelerating the problem: the percentage of people who don't consistently save money doubled, from 14 percent in 2020 to 28 percent this year. Last year, when asked what areas of their financial wellbeing they'd like to improve, 40% said long-term financial planning. That answer saw the biggest jump in this year's survey, with 55% of employees saying that it has become a priority. The fallout from the pandemic has clearly left an impression on people, who now recognize the importance of having a longer-term financial plan in place. With that in mind, it should come as little surprise that getting better at savings was next among improvements employees are striving to make. Nearly 50 percent of respondents selected it. "Businesses have a tremendous opportunity in front of them to act in the best interest of their people and put the programs and benefits in place to help them with their financial plight," Macklin said. "Employees trust their companies to do right by them - even amongst financially stressed workers, seven out of 10 trust the companies they work for. With financial wellbeing being a priority now for so many, we found that close to 60 percent of employees are interested in a salary-linked savings benefit. Salary Finance remains committed to partnering with forward-thinking businesses to move millions of Americans out of debt and into savings." Download the free report here. About Salary Finance Founded in 2015, Salary Finance is an award-winning organization that partners with employers to offer financial wellness solutions that help employees be financially healthier and happier. A company underpinned by a social purpose, we're driven by an ambitious mission in the US: to help 10 million Americans out of debt and into savings. Salary Finance is a United Way Worldwide corporate partner and works with over 600 of the world's leading employers. Salary Finance is a Founding Member of Conscious Capitalism's Senior Leader Network, and a member of the American FinTech Council. To learn more, please visit www.salaryfinance.com/us.
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