Let's be honest, no matter how the experts label the nation's current economic volatility, U.S. employees are still feeling the painful pinch of rising costs in key day-to-day living expenses like food, gas and housing. And for some of them trying to make ends meet, financial insecurity has become a reality.
As those financial concerns grow, they can significantly impact employees' work performance, personal lives and future plans. And nearly all employees (93%) are looking to their employers for financial wellness support. The question becomes: What inventive benefit packages — from financial education and resources, to loan repayment support and financial counsel — can you offer clients to help employees address these challenges and, more importantly, regain their financial footing?
By the numbers: Inflation's impact on employees
Let's start by taking a closer look at some of what's causing these money woes — and the effect it's having on employees. Not surprisingly, Americans say their top concern is paying for housing and everyday expenses:
- Home prices are still up nearly 11% from last year, and higher interest rates are having a brutal effect on the housing market. This is driving up the cost of home-buying by hundreds of dollars each month and pummeling demand.
- Additionally, rent prices for single family homes swelled during the first half of 2022, hitting a national average of $2,495 a month — a 13.4% increase compared to the same period in 2021.
- While fuel prices have recently dropped nearly 20% from a US national average high of $5.08 per gallon in June, the current average ($4.08/gal) is nearly double what it was in 2020.
- Food prices jumped 13.1% in July, the biggest one-year increase since March of 1979.
As debt continues to rise, so do financial shocks, which Pew defines as a significant loss of income or a major unexpected expense, such as a trip to the hospital or a significant auto repair. In fact, 60% of Americans experience financial shocks and one-third experience two or more per year. This puts more financial pressure on American families, nearly 70% of whom don't have emergency savings. These costs are typically around $2,000, representing half a month of income for the median household.
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