For roughly 60 million workers in the United States, getting sick is not only a health event. It can be an income event, and, soon afterward, a spending event.
PYMNTS Intelligence’s Wage to Wallet Index, a collaboration with WorkWhile, found in August that 26.6% of Labor Economy workers lost employment income because of their own illness or injury during the previous 12 months. Among non-Labor Economy workers, the figure was 15.9%. Most losses were below $1,000, but the same dollar loss can consume more of a low-income household’s available budget.
Among respondents who worked sick, 30.3% of Labor Economy workers said avoiding lost pay was the biggest reason, nearly twice the 16.5% rate among non-Labor Economy workers. For the Labor Economy group, lost pay ranked above every other explanation.
Presenteeism, as a result, is becoming a financial calculation. Two employees may make the same decision to work through an illness while operating with different economic margins for error.
Payroll Shock Feeds Directly Into Consumer Demand
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The study suggested that Labor Economy households have fewer backup resources once income falls. Just 37.2% reported owning something they could sell or borrow against to cover an unexpected $1,200 expense, compared with 56.9% of non-Labor Economy workers. Meanwhile, 24.6% had no retirement account, versus 11.1% of the comparison group.
That creates a shorter transmission mechanism between an unexpected event and household behavior. For businesses serving these consumers, this means relatively modest interruptions in earnings can affect demand faster than aggregate employment or wage statistics might suggest.
It also points toward a different definition of financial resilience. The opportunity is not necessarily to eliminate income volatility, which is intrinsic to many hourly and shift-based jobs, but to reduce how rapidly volatility reaches the wallet. The report identified emergency savings tools, cash flow alerts, flexible repayment schedules, faster access to sick pay or employer assistance, split deposits and flexible billing dates as potential mechanisms for absorbing short disruptions.
Read the report: The Wage to Wallet™ Index: Paid Time, Unpaid Risk
When job or income concerns rose, 43% of Labor Economy households cut nonessential spending, compared with 35.5% of non-Labor Economy households. They were also more likely to look for additional work or take on side and gig jobs, while being less likely to add money to savings.
Paid sick leave is only one layer. Labor Economy employees also trailed their counterparts in employer-provided health insurance, 73.9% to 86.6%; paid time off, 67.4% to 81.1%; and retirement plans, 60.3% to 74.9%.
The cumulative effect is important. Benefits function as financial shock absorbers. They do not prevent a disruption, but they can prevent that disruption from immediately becoming a cash flow problem. The economic value of a benefit or financial product may be measured by the distance it creates between a missed shift and a missed purchase. For millions of workers, that distance remains short.
At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.