Next News Network

As economic indicators paint an increasingly stark picture of the financial health of American citizens across political lines, the manifestations of persistent inflation, rising debt, and dwindling savings may be most poignant among women. According to the latest joint study by Varo Bank, Morning Consult and THRIVE Financial Empowerment Services, a troubling 60% of women in America are now living paycheck to paycheck – a significantly larger ratio compared to the 41% of men facing the same precarity.

The Varo Bank study was conducted among 1,004 Americans who regularly spend most or all of their income. It revealed that the cost of living is the most significant financial concern for those struggling to make ends meet, followed by eroding savings and mounting debt. Interestingly, these concerns remain unchanged regardless of political affiliation, hinting at the ubiquity and indiscriminate impact of the current economic crisis – a fact underscored by Colin Walsh, founder and CEO of Varo Bank.

In this unfolding financial landscape, women represent two-thirds of the demographic labeled as “financially fragile”. The term refers to individuals who lack financial slack or support while living paycheck to paycheck. Insight from Ayesha Whyte, founder of Ellevator, a platform providing career development resources for women of color, suggests that this reality is the culmination of generational inequity. Women’s historical underpayment for the same roles compared to men, coupled with the intermittent and part-time nature of work common for women due to familial responsibilities, has left them drastically under-resourced to cope with economic downturns.

The economic panorama for women has been further compromised by the global pandemic. A study by the Census Bureau’s Household Pulse Survey demonstrated that 39% of women faced difficulties paying for household expenses by mid-October, compared to 35% of men. Marisa DiNatale, head labor economist at Moody’s Analytics, attributed this discrepancy to women’s prevalent engagement in lower-paying occupations and their primary roles in household and childcare duties.

While economic hardship has become a major talking point in political debates, there is less consensus on the way forward. The Biden administration currently battles stubbornly high inflation, which has hit 9% year-over-year last June, far above the Federal Reserve’s target for annual inflation of 2%. Measures have been implemented to curtail inflation, such as hiking interest rates, placing increased pressure on those seeking loans for necessities like housing or cars.

The economic strain resulting from high cost of living, eroding savings, and increasing debt has triggered significant sacrifices, with 48.2% of respondents having forgone at least one basic need such as doctor’s visits or safe housing in the past six months. Worryingly, over a quarter of respondents reported sacrificing at least two basic needs. This situation is particularly challenging for younger generations, with 38% of Generation Z respondents expressing embarrassment or shame in seeking financial support.

The financial strain on women, communities of color, and youths has eroded trust in financial institutions, with 75% of respondents believing these institutions are rigged against the poor. Women, who are more likely to be financially fragile, express less trust in these institutions than men. Trust levels do not significantly vary among ethnicities, a fact that surprised Walsh. Nathalie Molina Niño, co-founder and chief strategy officer at financial services platform Known, applauded the resilience and entrepreneurial spirit that these demographics have exhibited despite the mounting economic pressure.

On a hopeful note, the economic situation for women in the U.S. is not entirely stagnated. Their employment has rebounded since the end of the pandemic, and all jobs that were lost have been ostensibly recouped thus far. The rise in flexible work arrangements, such as remote work, has also created the opportunity for more efficient job matching. This has culminated in the highest instance of active participation in the labor force by women between the ages of 25 and 54 – perhaps a silver lining in an otherwise challenging climate.

As the winds of economic instability buffet the nation, the impact is visibly skewed against women. Yet, their resilience, adaptability, and undaunting spirit have presented a beacon of hope in an otherwise bleak scenario. The next chapter in this saga hinges on appropriately acknowledging and addressing these systemic biases, not merely as political rhetoric, but with effective strategies that demonstrate an inclusive, equitable recovery is indeed possible.