You feel its effects every day but simply consider it a part of doing business. Referred to as the “silent epidemic,” Financial Stress affects 30 million American workers (25% of the workforce), and unless your employees are requesting loans against their 401(k)s or you’re receiving garnishment or bankruptcy notices, it goes largely unnoticed.
Consider the 2011 Brookings Institution study on Financially Fragile Households. When asked if they could come up with $2,000 in 30 days, only 24.9% of all households said they certainly could, including only 58.1% of households earning more than $150,000 per year. People cited working extra hours, borrowing from family, pawn shops, and payday loans as options for obtaining the cash. Unfortunately, those payday loans are having long-term, detrimental effects on the increasing numbers of employees using them.
How are payday loans harmful to my employees?
Regard some statistics and studies conducted over the past several years. Payday loan borrowers are...
- More likely to delay medical, dental, and prescription drug needs.
- 2 times more likely to become delinquent on their credit cards, be evicted, and have their phones shut off.
- 3 times more likely to have their utilities shut off and declare bankruptcy.
How does my employees’ Financial Stress hurt me?
Comprehensive studies over the past 30 years help quantify and monetize the bottom-line costs to employers.
- 19% of absenteeism is due to stress.
- 40% of turnover is due to stress.
- 60% of workplace accidents are due to inattentiveness and distractions caused by stress.
And consider just a few societal implications of Financial Stress:
- The number one cause of divorce is financial stress: 2,380 couples divorce each day in the U.S.
- 75% of all doctor’s visits are due to stress. 10% of Americans are prescribed medication for anxiety or depression.
More than 12 million Americans (more than 10% of the adult workforce) turn to payday loans each year to solve an immediate financial need, and they pay more than $7.3 billion in fees for the privilege.
Considering the costs to you, your employees and society, is it time to change our approach to the problem?
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