More than one-third of working consumers believe they have better opportunities for career advancement now than in recent years. Although high-skilled technology or technical workers are most likely to feel bullish, data reveals that various workers feel more optimistic than average. These include physically demanding occupations and trained education workers.
Paycheck-to-paycheck workers are less likely to share that optimism. More U.S. consumers now fit under this umbrella — 67%, including a 24% share of consumers with this lifestyle who struggle to pay bills. They actively seek better-paying jobs to build financial stability, and an improved market for promotions in the field could help.
Paycheck-to-paycheck workers’ sentiment on job prospects skews more pessimistic. They are more likely to report facing job market obstacles than their financially secure counterparts. They also report more rejected applications, unsuccessful interviews and stronger layoff fears.
It’s important to note that these figures still represent more optimism than pessimism. Nearly one-third of consumers living paycheck to paycheck with issues paying bills still believe career advancement opportunities have improved.
However, data ultimately reveals disparities in job market experiences between paycheck-to-paycheck workers and those who are more financially secure.
These are just some of the findings in “New Reality Check: The Paycheck-to-Paycheck Report,” a PYMNTS Intelligence exclusive report. This edition examines paycheck-to-paycheck consumers’ outlooks on career advancement and draws on insights from a survey of 2,959 consumers conducted from Nov. 8 to Nov. 22. The report reveals consumers’ nuanced sentiments towards the job market and their perceived ability to advance in their fields and gain the financial stability they crave.
Stronger Job Market Marked By Cross-Field Optimism
Many workers across career types say that advancement prospects are better than three years ago, although office workers are less optimistic than average.
Individuals across several career paths report career advancement prospects have improved compared to three years ago. Approximately 58% of high-skill tech workers shared this sentiment, along with 45% of workers in physically demanding roles and qualified education workers. These are diverse groups of workers who are bullish about career prospects, highlighting widespread optimism.
For all career types surveyed, more workers reported improved career prospects than worse ones.
AI may be a key factor differentiating worker types who are more optimistic versus those who lean the other way. Office workers were least likely to report opportunities for advancement had improved (31%) and essentially tied for most likely to report worse opportunities (23%). Back-end and customer-facing retail and service workers also exhibited relatively muted optimism. Common GenAI uses include automated office functions, and AI can also disrupt customer service and retail inventory roles.
High-skilled tech workers and qualified education workers are not immune to AI’s progress, of course. However, each role could be more likely to deploy AI strategically than to be replaced by AI — time will tell.
Paycheck-To-Paycheck Workers Perceive Shaky Career Prospects
Workers living paycheck to paycheck and struggling to pay bills are twice as likely as financially stable workers to believe career prospects are worsening.
A way for paycheck-to-paycheck individuals to build financial stability is to get and hold a higher-paying job. The latest data confirms that they feel this is much easier said than done. Despite general widespread bullishness, PYMNTS Intelligence’s research finds that financially strained consumers are 34% likelier than the sample average to think career advancement has grown more difficult over the past three years.
Similarly, 37% of surveyed workers believe career opportunities are better than they were three years ago, but that share drops to 32% among workers living paycheck-to-paycheck with issues paying bills. That 12% drop is notable, but should not be overstated. After all, nearly one in three financially struggling workers believe they have better paths to advancement than they used to.
Job Insecurity Worries Paycheck-to-Paycheck Workers
Workers living paycheck to paycheck are much more worried about losing their jobs than their more financially secure peers.
Losing one’s job is a common fear, with PYMNTS Intelligence research finding that 31% of employed individuals are concerned about being laid off in the next 12 months. Fears worsen for workers without financial stability: 43% of those living paycheck to paycheck with trouble paying bills fear layoffs.
One possible explanation for this heightened fear is that those living paycheck to paycheck are closer to losing what they have than more financially secure consumers. By definition, consumers not living paycheck to paycheck have the capacity to save, and PYMNTS Intelligence data confirms that this link exists. That also means these consumers may have backup plans their paycheck-to-paycheck peers lack should they need to ride out a period of unemployment. Paycheck-to-paycheck households, as the label implies, could face severe financial troubles with just one missed paycheck.
Another explanation backed up by PYMNTS Intelligence research is that paycheck-to-paycheck workers have, on average, been employees for a shorter period of time. Last-in, first-out conventions mean these workers could be more likely to be on the chopping block if layoffs come around. PYMNTS Intelligence found that 18% of consumers who struggle to pay bills have been employed at their current job for less than one year. Only 10% of paycheck-to-paycheck workers not struggling to cover bills and 9.2% of workers not living paycheck-to-paycheck have been at their jobs for that short a time period.
Financially secure workers are also much more likely to be at their jobs for longer than five years. Per the same conventions, they could be more protected from layoffs.
Paycheck-to-Paycheck Workers Say It Is Harder To Find Work
Paycheck-to-paycheck individuals submit more job applications and report having trouble standing out to potential employers.
Further hindering paycheck-to-paycheck workers’ abilities to improve their own financial situation is their perceived difficulty in finding new work. PYMNTS Intelligence research finds that 23% of paycheck-to-paycheck workers worry about their ability to pass interviews or assessments. Among their peers who do not live paycheck to paycheck, only 16% share that worry. Another 26% of paycheck-to-paycheck workers with trouble paying bills say they have difficulty standing out and getting noticed by employers. Just 17% of financially secure workers said the same.
One way to measure this struggle for new employment is job application volume. Struggling paycheck-to-paycheck workers are almost 120% more likely to have applied for more than 20 jobs before landing their current position than those not living paycheck to paycheck. They are also 38% less likely to be recruited or referred for a job. Several explanations include a higher likelihood of working in retail or customer service positions — which may lack desired experience for other positions — and having smaller social networks, perhaps due to working lower-wage jobs with higher turnover.
These problems with job seeking could also stem from a relative lack of education compared to financially secure peers. Less than one-third of struggling and non-struggling paycheck-to-paycheck consumers have a college or postgraduate degree (22% and 31%, respectively). Data reveals that 43% of consumers not living paycheck to paycheck have that education. If this proves to be a major factor, it is not an easily solved problem considering college degrees’ sheer cost — as well as the opportunity cost of attending classes instead of working more hours for pay.
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Methodology
“Despite Strong Job Market, Paycheck-to-Paycheck Workers Worry More About Job Prospects,” is based on 2,959 responses gathered from Nov. 8 to Nov. 22. The report details paycheck-to-paycheck workers’ career outlooks. Our sample was balanced to match the U.S. adult population in a set of key demographic variables: 51% of respondents identified as female, 33% were college-educated and 30% declared incomes of between $50,000 and $100,000 per year.
