PALO ALTO, Calif.--(BUSINESS WIRE)--Earnin, an app that allows anyone with a job and a bank account to get paid the minute they leave work, today released a wage analysis that finds the two week gap between paychecks is too wide for most Americans, many of whom lack the savings to cover even a single month of expenses.
The analysis, Breaking the Cycle: Bridging the Biweekly Pay Gap, looks at the U.S. national average pay cycle distribution and compares it to Earnin users, many of which are living paycheck to paycheck. The report finds that:
- Two-thirds of Americans are paid biweekly (or every other week), yet these employees account for nearly three-quarters of Earnin users, which far exceeds the national average.
- Workers paid biweekly are 50 percent more likely to use Earnin than workers who are paid weekly. We’ve seen that shorter pay periods allow for more budgeting flexibility despite lower average pay.
“Workers that are paid weekly seem to be more resilient and more frequent pay can reduce reliance on high-interest, short-term loans to handle unexpected financial shocks,” said Earnin Economist Peter Griffin. “Despite a lower average hourly rate, faster pay can enable better budgeting flexibility and save families hundreds of dollars a year in unnecessary late fees.”
The longer pay cycle impacts higher paid workers as well, especially in high cost of housing cities. In San Francisco, Salt Lake City, San Jose, Portland, and Seattle, more than 20 percent of Earnin users are paid semimonthly (twice a month), compared to only 13 percent nationally.
“The economic conditions forcing many into difficult situations stretch far beyond pay frequency,” said Griffin. “However, Earnin is providing a solution that can be an important step forward in improving the lives of millions of American workers.”
For the full Earnin Breaking the Cycle: Bridging the Biweekly Pay Gap analysis, please visit the Earnin Blog.
To learn about Earnin and how we are building a financial system that works for people, please visit www.earnin.com.
Earnin is the new, faster way to get your paycheck. Unlike traditional, rigid paychecks that only show up every two weeks, Earnin gives you access to your pay as you earn it -- any time, any day, right from your smartphone. Earnin charges no fee or interest for using the service: instead, with each transaction users are given the opportunity to pay what they believe is fair. Launched in 2014, Earnin is driving consumer-empowered finance through mobile technology by breaking open more than $1 trillion held up in America's pay cycle. Current funding partners include Andreessen Horowitz, Matrix Partners, Ribbit Capital, Felicis Ventures, March Capital Partners, Trinity Ventures, Thrive Capital, and Camp One Ventures. For more information please visit www.Earnin.com.