Access to Earned Wage Helps Support New Jersey’s Middle Class
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Just the FAQ, USA TODAY
As an entrepreneur and hardworking Middlesex County resident, I know people all too well who unfortunately assume that if I don’t make six figures, I don’t have to figure out how to manage my money or take control of my finances.
This misunderstanding has prompted some people to denigrate a new financial tool that helps workers like me called Earned Wage Access (EWA). These people are basically arguing that working New Jersey residents like me lack the financial knowledge to use this service, and they are arguing for the state to restrict it, even though it helps people avoid payday lenders. predators and bank charges.
As a person living paycheck to paycheck, I see this problem differently. I use EWA to solve a simple financial problem: My billing cycle doesn’t match my employer’s pay cycle. Our family’s utility bill is due on Monday, but my paycheck doesn’t arrive for two Fridays. Before EWA, my only options were to wait a few days to pay a bill – forcing me to rack up late fees with the utility company – or turn to predatory payday lenders who charge outrageous fees. It was a choice between two paths to debt.
But, thanks to President Obama’s Consumer Financial Protection Bureau, a new third avenue emerged in 2017: access to earned wages. EWA is a financial tool that allows workers like me to get my money back soon after earning it, without waiting weeks for my paycheck. Unlike predatory payday loans, EWA is not a loan – there is no interest and no one can send bill collectors or harm my credit.
For anyone who uses EWA or understands how it works, this offers clear benefits to workers and helps us avoid a cycle of debt. Who would pay a late bill and incur fees when you could pay it on time without borrowing a dime?
As someone who uses EWA, I can tell you firsthand how it actually works: I use an app to access wages for a job I have already done and the money is sent to my bank account. This service does not cost anything to use. I can pay $ 0 or I can leave a voluntary tip.
I choose to tip even though I don’t have to, because EWA has helped me take control of my finances and avoid fees – it’s a financial lifeline that helps me follow my budget and avoid debt. And while some large employers offer EWA services as a perk, my employer does not, so I’m grateful that I can always access EWA services with a provider who works directly with me. Our elected officials in Trenton should work to put regulations in place to ensure that EWA is accessible to more workers, not fewer.
I hope our elected officials recognize that EWA is a real alternative for workers who otherwise have to turn to predatory payday lenders and bank overdrafts. Let’s prioritize the voices of people who actually use these products and want to support other workers. Hear from people like me who have used EWA to meet their financial obligations and save money.
I understand that a lot of people are outraged that we live in a country with so much inequality, forcing working class people to get extra support to make ends meet. I agree: we need to tackle income inequality. We can do this by increasing all workers, from raising the minimum wage to $ 15 an hour, to imposing stricter regulations to protect essential workers in factories and restaurants.
And in the meantime, we cannot remove a financial lifeline that helps tens of thousands of working New Jersey residents like me. Instead of trying to eliminate access to services that help people living paycheck to paycheck, I hope New Jersey can come together to uplift workers. That way, we won’t have to live from paycheck to paycheck in the first place.
Jennifer Kirchberger lives in Iselin.