The study says that women bear the brunt of financial pressures in the American economy

The study says that women bear the brunt of financial pressures in the American economy


(The Hill) – The economy looks much better than it did last year, but persistent inflation, ballooning debt and dwindling savings have particularly affected women.

Nearly 6 in 10 women live paycheck to paycheck, compared with 41 percent of men, according to a recent study by Faro Bank, Morning Consult and Thrive Financial Empowerment Services of 1,004 Americans who regularly spend most or all of their income.


These economic pressures are being felt across the political spectrum, and Americans living paycheck to paycheck — regardless of party — cited the cost of living as their top financial concern.

The study found that eroding savings and increasing debt are the top three concerns for people living paycheck to paycheck.

“It affects everyone,” Colin Walsh, founder and CEO of Faro Bank, told The Hill. “Sometimes you see political headlines and other things that might lead you to think there are concentrations, but (financial pressures) have been widespread.”

Making less money than men affects the entire budget

Women represent two-thirds of those considered financially fragile, a subset of Americans who live paycheck to paycheck and who lack any financial slack or support.

“Women continue to face the brunt of not being as economically advantaged as men today for a variety of reasons that go back generations,” said Aisha White, founder of Ellevator, an online platform that provides career development resources for women of color.

White noted that women have historically been paid less than men for the same jobs, leaving them with less spare money to invest in the stock market or build savings to weather an economic downturn.

“If you want to look at something more contemporary and modern, just look at the pandemic,” she added. “We are still recovering from that era. At that time, a number of women left their jobs due to childcare duties at home.

The Census Bureau’s Household Pulse Survey was launched during the pandemic to measure its impact on people’s lives. As of mid-October, the survey found that 39% of women had difficulty paying household expenses versus 35% of men, Marissa DiNatale, chief labor economist at Moody’s Analytics, told The Hill.

“Women, in general, earn less than men (on average) because they tend to work in lower-paying occupations than men, and they still bear the bulk of family and childcare responsibilities, making them more likely to work part-time or,” DiNatale said. “They have gaps in their work experience which also affects pay.”

Missy Norman, center, serves guests at Puckett’s Grocery and Restaurant in Nashville, Tennessee in 2021. The net worth of the typical American household grew at the fastest pace in more than three decades from 2019 through 2022, when stimulus money was allocated to address… The pandemic and low interest rates. Make it easier for families to pay off their debts. Mark Humphrey/AP

High prices are forcing some Americans to give up their basic needs

Economic hardship took center stage in last week’s Republican primary debate, as candidates criticized the “gig economy” but offered few solutions to improve the lives of Americans.

Consumers’ expectations about the economy have also deteriorated, as their savings, which were supported by pandemic-era stimulus payments, are eroded by rising prices.

The Biden administration faces a persistent rise in inflation, which has fallen sharply from its peak of 9 percent year-on-year last June. New CPI data released Tuesday showed prices were still 3.2 percent higher in October than a year ago, above the Fed’s 2 percent target for annual inflation.

The Federal Reserve raised interest rates to a range of 5.25 percent to 5.5 percent as part of its campaign to cool the economy and reduce inflation.

While the Faro Bank study points to financial institutions and the media being “overly focused” on interest rates, interest rates are higher than they have been in two decades and make borrowing money much more expensive, holding back Americans looking to buy a home. Get a car loan or carry a credit card balance.

Nearly half of respondents — 48.2% — said they had sacrificed at least one basic need in the past six months due to cost. Basic needs include doctor visits, medications, healthy food, and safe housing. Twenty-eight percent went without at least two basic needs.

Young people reported more difficulty asking for financial help, with 38% of Gen Z respondents saying they felt embarrassed or ashamed to ask for support.

A doctor uses a Doppler probe on a pregnant woman to measure the fetus’s heartbeat in 2021 in Jackson, Missouri. Births in the United States were flat in 2022 as the country continued to see fewer babies born than before the pandemic. (AP Photo/Rogelio V. Solis, File)

Trust in financial institutions declines

Increased financial fragility has eroded trust in financial institutions, with nearly three-quarters of survey respondents saying they believe US financial institutions are “rigged against the poor.”

It turns out that women, who are more likely to be classified as financially fragile, are less trusting of financial institutions than men.

Ethnicity was not associated with a significant difference in trust, which surprised Walsh, who noted that overall trust in financial institutions was declining.

“The only thing that’s really surprising about the financial pressure we’re putting on young people, women and communities of color is how resilient they are and how entrepreneurial they remain,” said Natalie Molina Nino, co-founder and chief strategy officer at the well-known financial services platform. said the hill.

Despite continued division, women’s economic situations have steadily improved from where they were at the beginning of the pandemic.

“Since the pandemic ended, women’s employment has increased rapidly (especially since children returned to in-person learning) and they have regained all the jobs they lost,” DiNatale said.

She added: “Furthermore, there is some evidence that flexible working arrangements (including remote working) have improved job matching, and now prime-age women (aged 25-54) are participating in the workforce at higher rates than “at any time historically.” .

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