American Workers Clock Fewer Hours with Same Pay as Paid Leave Benefits Increase

American Workers Clock Fewer Hours with Same Pay as Paid Leave Benefits Increase

The American workforce is experiencing a shift, as workers find themselves clocking fewer hours for the same pay, thanks to increased offerings of vacation, sick, and family leave. 

A Growing Gap

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A noticeable gap has emerged between the hours American workers are paid for and the hours they actually work, showing an improvement in work/life balance. 

Increased Paid Leave

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Over the last decade, there has been a rise in the proportion of workers offered sick leave, growing from 67% to nearly 80%.

Family Leave Offerings Double

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The offering of family leave has significantly increased, jumping from 12% a decade ago to 27% this year.

The Atlanta Fed’s Analysis

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Economists from the Federal Reserve of Atlanta analyzed data revealing a widening gap between paid and worked hours over the past 15 years.

Stable Paid Hours, Decreasing Work Hours

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While the average hours paid has remained around 34.5, the average weekly hours worked has gradually decreased from 33.7 in 2006 to 32.8 in 2023.

An Hour’s Difference

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The gap between average hours paid and worked has expanded by almost an hour a week since 2006.

Role of Paid Leave

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The increase in paid leave offered by companies is identified as a driving factor behind this trend.

Pandemic Impact on Work Hours

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The COVID-19 pandemic led to a significant reduction in hours worked, while hours paid saw a slight uptick.

Temporary Rise in Work Hours

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Between 2020 and 2021, weekly work hours saw a brief increase of about half an hour, compensating for labor shortages during the pandemic.

Vacation Days on the Rise

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The proportion of workers offered vacation days has risen from 74% in 2013 to 77% a decade later.

National Compensation Survey Insights

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Data from the Bureau of Labor Statistics indicates an upward trend in the percentage of workers with access to paid leave benefits over the last decade.

Pandemic-Driven Work Absences

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During the pandemic, work absences due to illness, childcare, family responsibilities, and other reasons surged, diverging from the usual vacation or holiday leaves.

Returning to Pre-pandemic Levels

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As the labor shortage eased, the hours workers were paid for began returning to levels seen before the pandemic.

A Significant Shift in Work Culture

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The Atlanta Fed report highlighted a significant shift in work culture, with more emphasis on paid leave, especially during the pandemic.

Impact on American Workers

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The increased availability of paid leave and a reduction in actual hours worked signifies a potential improvement in work-life balance for American workers.

Looking Ahead

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As the landscape of the American workweek evolves, the focus on paid leave and its impact on work hours offers a glimpse into the shifting priorities of both employers and employees.

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Surge in Retiree Spending Predicted to Fall as Social Security COLA Decreases

Surge in Retiree Spending Predicted to Fall as Social Security COLA Decreases

Retirees have been significant contributors to consumer spending in 2023, buoyed by a substantial increase in Social Security. However, this trend might see a slowdown as the cost of living adjustment (COLA) is set to decrease next year.

Record Hike in COLA

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In 2023, Social Security beneficiaries saw an 8.7% increase in COLA, the highest in four decades. This adjustment significantly boosted spending among older adults.

A Diminishing Impact

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Despite this increase, the COLA for 2024 is projected to be just 3.2%. Experts anticipate that the impact on retirees’ spending power will lessen as a result.

Comparison With Inflation

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The 2023 COLA surpassed the inflation rate, providing retirees with extra spending power. However, the 2024 adjustment aligns closely with expected inflation rates.

Diverse Income Sources

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Retirees often have multiple sources of income, including pensions, allowing their spending to remain relatively strong despite COLA reductions.

Generational Spending Patterns

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Data indicates that older generations significantly outspent their younger counterparts in 2023, with baby boomers and the silent generation leading in credit- and debit-card spending.

Asset Distribution

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Baby boomers held around $80 trillion in assets in the second quarter of 2023, far surpassing the $14 trillion held by millennials.

Drawing Down Savings

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Baby boomers have been withdrawing from their savings and checking accounts more slowly than younger generations, potentially indicating more available funds for future spending.

Spending Out of Necessity

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Despite increased spending, analysts suggest that older adults may be spending more out of necessity due to rising prices rather than discretionary spending.

Healthcare and Home Repairs

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Some spending may be attributed to delayed medical treatments and home repairs that were postponed during staffing shortages in previous years.

Impact of COLA on Beneficiaries

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The 8.7% COLA resulted in an average increase of $146 per month for beneficiaries, while the 2024 adjustment is estimated to be around $50 a month.

Survey on Spending Habits

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A survey by the Senior Citizens League found that 45% of older respondents spent less than $2,000 a month, 37% spent between $2,000 and $3,999, and 15% reported spending $4,000 or more.

Reliance on Social Security

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Approximately 40% to 44% of seniors depend entirely on Social Security for their income, primarily spending on essentials such as housing, healthcare, and groceries.

Sustainability Concerns

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Analysts are concerned about how long retirees can maintain this level of spending without depleting their savings.

Future Financial Health

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Bank of America predicts a decline in older generations’ assessment of their financial health in six months, while younger generations have more positive expectations.

Spending to Narrow

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Despite the anticipated decrease in COLA, Bank of America suggests that retirees will continue to outperform other age groups in spending, albeit by a narrower margin.

The Road Ahead

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The decrease in COLA may lead to a reduction in retirees’ spending growth. The continued observation of these trends will be crucial to understanding the broader economic impacts.

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The post Surge in Retiree Spending Predicted to Fall as Social Security COLA Decreases first appeared on Thrifty Guardian.

Featured Image Credit: Shutterstock / fizkes. The people shown in the images are for illustrative purposes only, not the actual people featured in the story.