Chronic financial stress can manifest in physical as well as severe mental issues. Employers are in a position to help their employees overcome financial stress and improve their overall well-being.
Unfortunately, lower-income workers and those who live below the poverty line have an increased vulnerability to mental illness. In fact, of the 9.8 million mentally ill people in America, 2.5 million (or over 25 percent) live below the federal poverty line.
Yale Department of Psychiatry research scientists believe that, to address the health of people and communities, you must first address poverty and reduce financial stress.
“Some of the things we think of as ‘mental health problems’ are actually poverty problems,” Annie Harper, PhD, Associate Research Scientist at the Yale Program for Recovery & Community Health in the Yale Department of Psychiatry explains. “If we solved people’s financial problems, I think many of their other problems would go away.”
Harper states one driving factor of heightened mental health issues of those in poverty is that these individuals are more likely to be “financially excluded”, meaning they lack access to formal financial services. They use alternative financial services including check cashing and pawn places that charge high fees and those who do have bank accounts have to pay minimum balance fees and overdrafts due to lack of funds. Other services include payday and title loans.
In effect, people have to pay to be in poverty due to this financial exclusion in what the Yale School of Medicine article calls “the hidden costs of poverty”, costs that most lower-income employees are also subjected to—costs that are likely detrimental to a person’s mental health.
And when it comes to the workplace, employees who struggle with mental health and financial stress bring about high expenses from increased turnover, absenteeism, disengagement, and more. For example, 71% of employees say they suffer from financial stress and of that group, 53% report that it interferes with their ability to focus and be productive in the workplace.
The solution? To reduce employee financial stress and the business costs that come with it by mitigating the financial exclusion lower-income employees experience. How can you? Offer employees a Holistic Financial Wellness Program with earned wage access so they can avoid predatory financial services, a salvation for employees with unmet between-paycheck needs.
In addition to earned wage access, the right program should offer many financial solutions like bill payments, a savings and budgeting tool, and more. With this, employees can count on a well-rounded platform to offer financial inclusion and help unload some of their mental burdens.
PayActiv, an award-winning Holistic Financial Wellness Program in the FinTech and HR industries, provides timely earned wage access along with an entire array of actionable tools and services proven to help employees save, feel less financial stress, and thrive, including:
PayActiv puts the control back in the hands of employees. Through a platform of socially-responsible financial tools and services, employees can avoid fees from overdue bills and high interest rates and fees from predatory loans. We offer the ability for employees to better manage their monthly expenses, save more, worry less. PayActiv empowers every employee with financial security, dignity, and savings, and most important of all, peace of mind.
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