money Pandemic hurt frontline workers' finances more than others'
Not only did frontline workers expose their health during the pandemic, many of them also risked their financial security, according to a new study.
“Low- and moderate-income frontline workers were constrained on the income side and also pushed on the spending side across the pandemic,” said Helen Robb, senior manager at Financial Health Network, which conducted the study in conjunction with the BlackRock’s Emergency Savings Initiative. “They managed to make it through for the most part by drawing down on savings much more heavily than other workers.”
In the last year, only 42% of frontline workers making $60,000 or less were able to spend less than their income, compared with 52% of non-frontline workers who earn a similar amount. Nearly half of frontline workers (47%) could not pay all their bills on time last year, versus 38% of non-frontline workers.
The survey had 1,751 participants, all of whom were low- or moderate-income workers. Frontline worker was defined as anyone who came within 6 feet of other people at their jobs regularly, such as health care workers, food manufacturer workers, and grocery store workers.
Read more: Ask the expert: How to build an emergency fund after the pandemic
Several factors contributed to the disparity between frontline and non-frontline workers, according to the study.
Frontline workers were more likely to experience a decline in income versus their non-frontline counterparts (29% to 21%). At the same time, a larger share of frontline workers (90%) reported an increase in expenses than non-frontline workers (85%), the study found.
“When we dove into what might be driving that, we saw that 6% of [frontline] workers actually had to miss work because of needing to arrange for childcare,” Robb said.
To cover increased costs such as childcare and transportation, frontline workers drew down on their savings accounts. Despite continued employment during the pandemic, 43% of frontline workers were worried about exhausting their savings, compared with 34% of non-frontline workers.
The Financial Health Network is pushing for solutions and ways to bolster the savings of low- and moderate-income workers, especially those who served on the pandemic's front lines.
Read more: Here are the financial considerations of becoming a stay-at-home parent
“Offering an emergency savings balance as part of a worker’s total compensation effectively and directly supports workers in building emergency savings,” the report noted. “Other solutions include savings matching or offering prizes for savings deposits.”
Companies like Best Buy and UPS have already joined the BlackRock Emergency Savings Initiative to help their employees by offering easy ways to set aside liquid savings accounts automatically as part of their 401(k) plans.
“I think there's a role for all of us in helping these [frontline] workers who have really got us through the pandemic,” Robb said.
Marissa is a reporter for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @MarissaLGamache.
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