American Workers Feel Financial Strain Despite Easing Inflation


Despite a gradual decline in inflation rates from recent historic highs, American workers continue to grapple with the growing strain of the cost of living, a Bank of America survey has revealed. The survey, exclusively shared with CNN, discloses that 67% of employees feel that their salaries and wages are not keeping pace with the rising cost of living, up from 58% in February 2022.

Lorna Sabbia, Head of Retirement and Personal Wealth Solutions at Bank of America, remarked, "Yes, the headline numbers on inflation are supposedly going in the right direction. But it doesn’t feel that way."

The impact of high inflation is striking, with only 42% of employees reporting feeling financially secure – the lowest percentage in the 13-year history of the survey. Additionally, 64% express significant financial stress, and this figure surges to 80% among older Millennials (aged 35 to 44).

Gender disparities are evident, with women expressing greater concerns than men. Only 38% of women feel financially secure, a five-year low and a drop from last year's 55%.

While there has been a decrease in inflation rates since June 2022, prices are still on the rise. Basic goods and services, from eggs to car rentals, have become notably more expensive compared to pre-Covid-19 levels. The average family now spends about $700 more each month on these necessities than they did two years ago, according to Moody’s Analytics.

This financial strain, exacerbated by inflation, has left many Americans dissatisfied with the current state of the economy and critical of President Joe Biden's economic policies. A recent ABC News/Washington Post poll indicated that 44% of Americans feel worse off financially under Biden than they did previously.

Beyond political sentiment, practical indicators of financial stress are emerging, with credit card debt surpassing $1 trillion for the first time, and more Americans falling behind on credit card and auto debt.

The survey also highlights disparities across ethnic groups, with Asian employees expressing a greater sense of financial security compared to their White, Hispanic, and Black counterparts.

Sabbia emphasizes the importance for employers to support their workers by providing financial resources, including budgeting tools and advice from professionals. She notes, "Companies now realize it has a direct impact on productivity, absenteeism, engagement and loyalty," emphasizing that a financially secure workforce is crucial for business success.