Discover more from Understandably by Bill Murphy Jr.
Pay by the day
A simple idea. Also, 7 other things worth your time.
The Department of Labor said Friday that a record 4.4 million people walked away from their jobs in September.
That was up from 4.3 million in August. And that was up from about 4 million in July.
This is what we call a trend.
Most of the reactions that I see to these numbers are either of the “nobody wants to work” variety, or else the “macroeconomic hiccup; don’t worry, things will return to normal” variety.
But as I wrote for Inc.com over the weekend, I don’t really like either explanation.
The first puts a misplaced moral assessment on the whole thing (ignoring the free market), and the second strips people of agency; suggesting they’re just flotsam and jetsam on a sea of financial forces, as opposed to people making their own choices.
We can do better.
Tangential but related: Let me tell you about a formative experience of mine, when I violated an important rule: DROOM, which stands for, “don’t run out of money.”
I was a third year law student with just a few months until graduation. But, I’d burned through my savings, spent the whole $8,500 a year I had to live on (thanks to federal Stafford loans), and maxed out my credit cards—just shy of the proverbial finish line.
I still had three months of rent until graduation, plus cheap food to pay for (thank you, Subway $1.99 round sandwiches of the late 1990s), and the occasional 99-cent draft beer at the bar just off campus.
(A young man has to have a social life.)
This ate me up emotionally, as I tried to figure out how to land the then-monumental figure of maybe $500 to see me through. I assumed I’d be working again in a few months, but in the short term, I just didn’t have the cash.
Eventually, I swallowed my pride and asked my dad for a loan. I will never forget how it felt to see him take out his checkbook and give me $1,000 (he wrote a check! I’m dating myself!), which was intentionally twice what I had asked for, and which gave me enough to get through the rest of the semester.
It was a powerful moment. It wasn’t the biggest thing he ever did for me, not by a long shot. But, I’ve held on the way it felt, and I’m grateful for the experience—humbling as it was at the time—because it helped me develop empathy.
And, it made me appreciate personal cash flow.
OK, back to the Department of Labor and all of that. Because I think there’s a simple change that some businesses could make that would enable some them to skate free of the Great Resignation.
A recent survey from PwC suggests that 42 percent of American workers live paycheck to paycheck. Some of them run into cash flow issues.
Our current “walk away” has primarily taken place among lower-wage workers—especially those working in customer-facing jobs like retail, travel, and restaurants—the kind of people for whom a relatively small amount of money can have a relatively large impact.
They work the hours, they’re owed the money, but their employer holds onto it for 10 or 14 days. In the meantime, they have bills to pay. So, hear me out here: It’s 2021; why not just pay employees every day, instead of making them wait?
"Everybody typically thinks it's just for people making $8 an hour," Jeanniey Walden, chief marketing officer at DailyPay, told me, after I came up this this idea and started exploring it only to realize that there’s a whole industry associated with it.
DailyPay, one of a few financial technology companies that enables employees to control when they get paid, says its data shows that 15 percent of salaried workers whose employers sign up for their platform wind up using it.
I don’t mean to make this sound like an advertisement for DailyPay or its competitors, but I really don’t see any downside. The cost is negligible; a few dollars per pay advance, and I really do think it could be life-changing for some workers.
A lot of us are living a lot closer to the edge than some people think. Maybe this absurdly simple adjustment could help.
7 other things worth your time
Republican congressional candidates currently hold their largest lead in midterm election vote preferences in ABC News/Washington Post polls dating back 40 years, underscoring profound challenges for Democrats hoping to retain their slim majorities in Congress next year. (ABC News)
A federal appeals court in New Orleans has halted the Biden administration’s vaccine or testing requirement for private businesses, delivering another political setback to one of the White House’s signature public health policies. (WashPost)
Republican Jack Ciattarelli finally conceded his narrow loss to Democratic New Jersey Gov. Phil Murphy on Friday, 10 days after the polls closed. (NY Post)
'Stretched too thin': With staff 'exhausted,' schools cancel class or return to remote learning.
Despite setting a world record, runner Julia “Hurricane” Hawkins was unhappy that she didn't run the 100m dash in less than a minute (at age 105). (The Guardian)