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Majority in B.C. still living pay cheque to pay cheque
Many working Canadians are barely making ends meet. About half (48% nationally and 53% in B.C.) report it would be difficult to meet their financial obligations if their pay cheque was delayed by even a single week. About one-quarter (24% nationally and27% in B.C.) say they probably could not come up with $2,000 if an emergency arose within the next month, making B.C. employees among the most cash-strapped in the nation.
“A significant percentage of working Canadians carry debt, have a gloomy view of their local economy and are fearful of rising interest rates, inflation, and costs of living,” says Patrick Culhane, the Canadian Payroll Association’s President and CEO. “In this time of uncertainty, people need to take control of their finances by saving more. ‘Paying Yourself First’ (by automatically directing at least 10% of net pay into a separate savings account or retirement plan) enables employees to exercise some control over their financial future.”
Incomes flat, saving capacity drained by spending and debt
“Survey data suggests that household income growth has stalled, as respondents reporting household income above $100K has hardly increased in five years,” says Alec Milne, Principal at research-provider Framework Partners. “In fact, real incomes have actually declined when inflation is taken into account.”
While pay has remained largely unchanged, employees’ spending and debt levels have affected their ability to save. According to the survey, 40% of employees nationally, and 49% of B.C. employees say they spend all or more than their net pay. Nearly half nationally (47%) and more than half in B.C. (52%) save just 5% or less of their earnings.
Despite employees’ challenging financial situations, only 28% of respondents nationally cite higher wages as a top priority. This is down from the average of 34% over the past three years. Instead, an overwhelming 48% are most interested in better work-life balance and a healthy work environment. In B.C., 31% of employees want a higher wage, and nearly half (46%) want a better work-life balance and a healthy work environment.
“Clearly, many Canadians are concerned about their financial situation,” says Lucy Zambon, the Canadian Payroll Association’s Board Chair. “But better work-life balance does not have to mean reduced financial security if you spend within your means and ‘Pay Yourself First’ as a step towards financial well-being.”