High gas prices creating ‘real tradeoffs’ for hourly workers: Analyst

Bipartisan Policy Center Policy Analyst Emerson Sprick joins Yahoo Finance Live to assess the financial impact rising gas prices is having on hourly wage workers, the trade-offs workers are making, and labor market trends

Video transcript

RACHELLE AKUFFO: Well, those high gas prices are hitting hourly workers particularly hard. For most, 81% of those surveyed in a Harris Poll, it's negatively impacting their ability to cover other expenses. Now for more insight, let's bring in Emerson Sprick, policy analyst at the Bipartisan Center. So this is clearly a very tough time, especially for hourly workers. As we look at some of that data there, we look at things like it's groceries, it's rent, it's utilities that people are struggling to pay, your basic essentials. How should we be addressing this right now?

EMERSON SPRICK: Yeah, so thanks so much for having me on. This was a survey that the Bipartisan Policy Center, along with Funding Our Future and DailyPay, commissioned. And it showed some really stark results. There are-- I appreciated the last segment about really breaking down what a gas tax holiday would look like, because I think, generally, that's not a good policy solution. Not only does that not really take off much of the price of gas for the average consumer, but that money is really important.

And it's really important for ensuring that we avoid situations like this in the future by funding initiatives such as those that ease the transition to decarbonization, to provide incentives for consumers to switch to electric vehicles, to use public transportation where that's feasible, and to really fund an effort that can help consumers in this way.

I understand the political pressures that the Biden administration is facing right now. They feel like they have to do something, and lawmakers as well. One thing that our survey showed was that 81% of hourly workers found it more difficult to afford other expenses because of these increased gas prices. And so that's causing people to have to make real tradeoffs in what they spend money on, between gas and groceries, between a car repair and healthcare.

And so there are a few different ways that we can address this. The problem is none of those work immediately. There's nothing that works in the short-term. Right now, prices are just very high. Inflation is 8.6% over the past year. And wages haven't been keeping up.

SEANA SMITH: So Emerson, what should-- what can people be doing? You're saying the fact that there's not much that can be done in the short-term. Some people, though, don't have enough disposable income on necessities that they need for everyday life. So what are some things that could be done? I know you highlighted one thing here in this report that employers are doing to help some of their employees.

EMERSON SPRICK: Yeah, that's right. So something that employers benefit that employers have started to offer is on demand pay. This is a service administered by companies like DailyPay. And the justification behind it is very clear. As you make money, you should be able to access it. Right now, we see too many American workers having to rely on often predatory financial instruments like payday loans. And our survey actually found that 31% of young workers making an hourly wage have taken out a payday loan this year.

So, at the same time, 10% of hourly workers reported using an on-demand pay app to help cover the bills. And this can really help people not have to make these kinds of tradeoffs between paydays. A separate survey from about a year ago showed that 83% of workers want this, that they believe they should have access to their earned wages at the end of each workday or shift. You know, this-- to clear up a fairly common misperception, this isn't about paying people in advance. It's just about paying people in a timely manner, ensuring that people have access to their wages as they're making those wages.

DAVE BRIGGS: Interesting in your data to see that the cost of gas and all the inflation increases are impacting women's ability to save, more so than men. Any theories as to why?

EMERSON SPRICK: Sure, there have been a few different demographic groups that have been affected more strongly by a lot of these trends, by increased prices and by some tough labor market trends than others. Women, in a lot of instances, have felt this more strongly. The lowest income households, obviously, have felt these effects more strongly. People with the least amount of education have felt these effects. And people of color have felt them more strongly.

And specifically with regard to women, one thing that we've seen is labor force participation rate that hasn't recovered from kind of the initial fall at the beginning of the COVID-19 pandemic induced recession, nearly as much as the labor force participation rates of men. There are a whole bunch of different possible reasons for this.

One thing that we found recently, another survey implemented by the Bipartisan Policy Center, particularly our paid family leave team, showed that women are bearing the brunt of a lot of these labor market dynamics. But they're also just having a harder time. They're being forced to balance work and other duties in a way that, in the aggregate, men just aren't.

RACHELLE AKUFFO: Indeed, a lot of juggling for women throughout this pandemic and beyond. A big thank you there. Emerson Sprick of the Bipartisan Policy Center, thank you for joining us.