More People Are Living Paycheck to Paycheck
By JANE J. KIM / WSJ / Nov 17, 2003
Many workers are living paycheck to paycheck, hurt, in part, by a weak economy and rising health-care costs, according to a study.
Although younger workers are more likely than older workers to live paycheck to paycheck, slightly more than half of those nearing retirement age depend on each paycheck, according to MetLife's 2003 Employee Benefits Trend Study, scheduled to be released this week.
Individuals have been "challenged" by a weak economy and have seen the value of their own assets decline, said Craig Guiffre, vice president of national accounts at MetLife. And although overall inflation has been low, certain costs are rising, such as medical care and college tuition. Meanwhile, employers have been shifting more of costs of benefits to employees, he said.
"The percentage of people in the boat of people living paycheck to paycheck is going up," he said.
Among those with children under 18, 57% rely on their latest paycheck to manage finances. Even among employees earning $75,000 or more a year, more than 34% live are relying on their latest paychecks to get by.
The survey found there were few differences across age, gender or the respondents' ethnicities. "The interesting thing was there weren't huge differences between all the populations," Mr. Guiffre said.
Due in large part to a heavy reliance on work income, more than two-thirds of employees are extremely or very concerned about making ends meet. For example, a majority of respondents, or 71%, don't have or don't know if they have a financial plan.
"The good news is that even for folks who are living paycheck to paycheck, it doesn't have to be expensive" to put together a financial plan, Mr. Guiffre said. People can find free information and financial-planning tools online or can get information from their employers. And because many companies are in the midst of open enrollment for next year's benefits plans, now is a good time for workers to ask their employers for more information. Nearly two-thirds of employees surveyed said they spend less than an hour each year considering their household's financial needs during their company's open enrollment for employee benefits.
The study consisted of two separate surveys: One survey polled 728 full-time employees, ages 21 and older, at companies with at least two employees and had a margin of error of plus or minus 3.1%. The second survey polled 1,548 human-resources and benefits executives and had a margin of error of plus or minus 2.1%. Both surveys, which were conducted by NFO World Group, were conducted online in September. |
