The growing financial insecurities of families around the globe have been fast becoming a chronic issue for many communities. As the cost of living continues to surpass minimum wage, tuition fees steadily rising and contract employment is becoming the norm, many families have little to no savings in case of an emergency.
According to the Federal Reserve Board, 47 per cent of Americans wouldn’t be able to come up with $400 in the event of a financial emergency.
Canadians aren’t fairing any better either. A 2015 survey by the Canadian Payroll Association found that almost half of Canadians polled admitted living paycheque to paycheque and would find it very difficult to make ends meet in the event of any income disruption.
The Urban Institute weighs in on the debate, urging cities to care more about the financial securities of the families that live within their communities, since loss of income could mean reduced revenue for the city and higher numbers of families seeking aid.
The solution? According to the Urban Institute, cities need to encourage families of all income levels to save more. Research found that savings play a larger role than income. A lower-income family with modest savings will fair better during a financial disruption than a middle-class family living paycheque to paycheque.
The Urban Institute’s research found that cities could protect their own financial health by encouraging families to save more through workforce development programs, affordable housing developments and by offering one-on-one financial coaching. Businesses can also help employees by offering automatic retirement deductions from paychecks.
When families are given the opportunity to pay themselves more, communities can only benefit.