When I asked Palaniappan if he thinks these problems could be solved by paying workers more, he agreed that it’s “always better for people to have larger paychecks,” but stressed that there’s a “timing issue” with when they get paid as well. “Bills don’t show up on payday,” he said; they’re often due before the direct deposit hits. Palaniappan said Earnin is addressing this problem with a financial calendar that helps people keep track of when their paychecks are coming in and when their bills are due, which he said can help users with budgeting. Another feature, Balance Shield, helps prevent overdraft fees by alerting users when their checking account balance falls below a certain threshold and, if they want, automatically transferring money to them via Earnin.
But is a lack of immediate access to their paychecks really the reason so many Americans are struggling to get by? If a minimum wage worker got their pay at the end of the day instead of two weeks later, would they still live paycheck to paycheck?
It’s no surprise that millennials, the demographic Earnin markets itself to, are in dire financial straits – but the reasons for the generation’s economic precarity are more complex than payday not always aligning with when the bills are due
And according to a 2018 report on how millennials compare to previous generations, the average millennial household had a net worth of $92,000 in 2016, which is nearly less than 40 percent of the average net worth Gen X households had in 2001.