A majority of Americans report feeling anxious about finances: Bipartisan Policy Center director
Rachel Snyderman, associate director of economic policy at Bipartisan Policy Center, joins Yahoo Finance Live to discuss Americans’ financial situation amid the coronavirus pandemic and how government programs have helped to alleviate some financial worries.
- And welcome back to Yahoo Finance. A new survey commissioned by the Harris Poll together with Funding Our Future in DailyPay finds a majority of Americans are anxious about their current financial situation. Here to help break us-- break that down and some other findings is Rachel Snyderman, associate director of Economic Policy from the Bipartisan Policy Center.
Rachel, thanks so much for being with us today. If you could just walk us through, what are some of the key findings in the survey? And what do Americans need to be mindful of coming out on this side of the pandemic?
RACHEL SNYDERMAN: Of course. Well, thank you for having me. It's important to note that the pandemic has truly exacerbated economic inequities in our country that span race, gender, income level, and age. And going into 2022, a majority of Americans report that they're anxious about their current financial situation.
And what we've also seen over the past 22 months is a potential extension of the gender wage gap at a time when many women feel increased pressure to balance and choose between work and child care as approximately half of men ages 35 to 44 either received a raise or a bonus in the past year versus only about a quarter of their female peers.
But what we have learned is that government assistance is helping parents during this financial hurt, this time of financial hardship as a large share who have been receiving monthly payments of the child tax credit since it was rolled out in July are actually spending those payments, that money on basic household necessities.
And what's interesting, though, is that workers are increasingly looking to their employers to help them ease some of these financial concerns, especially through the types of benefit programs that are being offered in the workplace. Now, of course, it's important to recognize that these trends come on the heels of a significant expansion of government resources to help households ease the financial stresses that have been brought about by the pandemic, the changing nature of our workforce, and, of course, the future of workplace benefits.
EMILY MCCORMICK: Rachel, this is Emily here. Your survey highlights another ongoing crisis in our country, which is the savings gap. But one thing I do want to highlight is that Moody's Analytics estimated that there was still $2 and 1/2 trillion left in overall excess savings for consumers as of October. So help us reconcile where this gap is really showing up and where some of the biggest discrepancies lie in terms of this gap.
RACHEL SNYDERMAN: Of course. So I think it's important too for viewers to understand that really the savings gap is the shortfall between the amount of money that people will need in the future and the reality of how much they actually have there that they have on track to save. And why we care so much about this is that research, you know, as demonstrated, consistently shows that a minority of savers are actually going to have enough funds for a comfortable retirement or really even enough to help offset an unexpected short-term expense.
And what COVID-19 has really demonstrated is that there's this differential impact in the savings gap in the United States, particularly between low and high income earners and men and women. So we found that those with lower incomes are truly hurting disproportionately. They're saving less now compared to prior to the pandemic versus higher income households, many of whom are reporting that they've actually increased their savings now prior to the pandemic. And really among this gender savings gap, we see that nearly half of men ages 35 to 44 actually have more savings now than compared to a women where we see about 20% of women reporting that same statistic.
- And then what does it tell us about how Americans are feeling about their financial security? And I know you mentioned men and women as being one demographic. But what about parents versus non-parents, homeowners versus renters, and things like that?
RACHEL SNYDERMAN: Of course. Well, it's-- Americans are certainly feeling anxious. And we see that really across all the data and different demographic groups that we looked at. But important that you know, particularly renters. We see this differentiation.
Renters are showing that they are facing financial anxiety are truly the highest rates and that and over the past two years, these individuals have faced, you know, fears of eviction. They've also faced oscillating rental prices. So obviously these types of trends that we've seen throughout the pandemic have only exacerbated that financial security.
But what's also really interesting is that we're seeing financial anxiety also greatly among millennials who really make up the majority of the workforce. And we're also seeing this trend continue among households who are making less than $50,000 a year.
But I think it's important to note that as we approach 2022, there is room for creative solutions from both employers and policymakers to help ease some of the financial stresses to help workers save for both the long term and also, of course, the short term.
EMILY MCCORMICK: And Rachel, I only have about 30 seconds with you now. But we've been talking about the great resignation for months. What kinds of benefits or employer-sponsored savings programs are you seeing employees really looking for in new jobs?
RACHEL SNYDERMAN: Yeah, of course, and it's an excellent point. We're seeing, for example, nearly 9 in 10 Americans are looking to their employers to help them build retirement savings. What we're also seeing, though, is that there is still such a tremendous gap for some workers in accessing these types of programs. And that's particularly among low wage and hourly workers.
But this is also where we've seen a welcome disruption in the market through innovative financial technology solutions that are helping Americans get back on track and save. So, for example, our survey found that 60% of workers say they could actually benefit from being paid more frequently than they currently are.
And this type of technology is being offered by companies like DailyPay, who we partnered with in this survey, which offers this type of technology to have employees be able to determine when they get paid as opposed to waiting for a preset scheduled pay day which then helps workers kind of alleviate some financial concerns so that they can make-- they can meet their financial needs immediately with the earned wages that they've already accrued as opposed to kind of waiting to pay bills or face different finances when payday arrives.
- OK, we will have to leave it there. Rachel Snyderman, associate director of Economic Policy from the Bipartisan Policy Center. Thank you so much for your time and a good weekend to you.