Millennials have copped their fair share of criticism for their spending habits and workplace expectations. However, there is more to this story. Millennials have genuinely felt the brunt of a slowing global economy throughout their working lives, relative to centuries of modern history. The ABC identifies a ‘real generational gap’ forming as the gap between older generations and millennials continues to rise. Largely this is due to an ongoing aging population, slow economic growth and the threat of climate change, as well as the policies we have implemented, or avoided, as a nation.
There is no magic solution to this problem, however we can all play a role in levelling the playing field. For example, Paytime is a leading provider of earned wage access access solutions. Earned Wage Access allows millennial workers (among others) to access their earned wages before their next payday, providing cash flow flexibility and a means to cover any emergencies that may come their way.
What Makes Earned Wage Access So Important?
Australia is currently experiencing our first recession in twenty-nine years, primarily driven by the impacts of COVID-19. Long-term youth unemployment in Australia has been on the rise since the depths of the Global Financial Crisis (GFC) in 2009. Since the start of COVID-19, millennials around the world have been displaced from their jobs more than any other generation. For many, the results from studying and the hard work they’ve contributed for sometimes over a decade, have seemingly disappeared!
COVID-19 isn’t the only reason for this unfortunate phenomenon. The economy has changed since the GFC. Millennials entering the workforce in the middle of a recession tend to work lower-paying jobs which impacts them throughout their ensuing careers. Compared to someone who started their career during an economic boom, their income, ability to save, and therefore, their wealth will be notably impacted over time.
Furthermore, despite Australia’s overall gross savings rate rebounding strongly over the last decade, estimates from ME Bank show that over 40% of Australian workers are living paycheck to paycheck. This means that almost six million Australian workers do not have access to sufficient savings to cover unexpected emergencies or other expenses that they haven’t budgeted for. When unable to meet expenses, workers turn to other sources of finance, such as credit cards, personal overdrafts and potentially dangerous payday loans.
Australian households pay an average of $468 in bank fees every year. Much of this is due to the resulting credit card charges, overdraft fees and late payment penalties from those living paycheck to paycheck. Banks and other financial institutions make a whole lot of money out of people who already struggle with personal cash flow. Earned Wage Access providers like Paytime are committed to stopping this from happening!
Millennials Might be Unlucky, But They’re Driving Change
Millennials have proven themselves to be resilient and adaptable. Millennials and their younger component, Generation Z are increasingly driven towards roles and organisations that embody meaning and purpose towards making the world a better place. They’re also more and more attracted to non-traditional employee benefits, such as flexible working arrangements, unlimited leave and wellness programs. An increasingly valued employee benefit theme is ‘financial wellbeing,’ where employers offer financial guidance and tools to their employees to help them minimise financial stress. A 2015 study from the University of Warwick found that “happiness made people around 12% more productive,” highlighting the practical importance of positive mental wellbeing, in which minimising financial stress plays a pivotal role.
Paytime aims to play a significant role in improving the financial wellbeing of Australia’s employees. Earned Wage Access allows employees to access their earned pay through a mobile app at any point of the pay cycle, without having to wait until their next payday. When an unexpected bill or expense arrives, instead of turning to credit or a payday loan, employees can alternatively access a portion of their earned wages to cover any shortfall. It’s easily worked into your existing payroll system, avoiding any disruption to your usual processes. When an employee wants to access some of their earned income, they will be charged a small, fixed fee (less than the cost of a cup of coffee) and Paytime will deduct the amount from their next paycheck. It’s not a loan, there’s no interest to be paid, and it doesn’t cost your business any additional money!*
Workers who have already earned their wages should be able to access them on their terms. If your business wants to give millennial employees a fair go by helping improve their financial wellbeing, contact Paytime today!
*Note: Unless you decide to subsidise the service for your employees
