51% of Struggling Consumers Are Paid by the Hour

The paycheck-to-paycheck economy is becoming less about spending habits and more about the way Americans get paid.

The November PYMNTS Intelligence report “Income Instability Is Redefining the Paycheck-to-Paycheck Economy” found that 66% of U.S. consumers live paycheck to paycheck.

That share dipped slightly from September, but it remained above levels seen two years ago. The report, based on a survey of 2,117 U.S. consumers, found that more consumers are living this way because they have no other choice.

The findings pointed to a more structural challenge for households, banks, payments firms and employers. Many consumers are not only managing higher costs. They are managing income that arrives in less predictable ways. Hourly pay, contract work, gig platforms and commission-based earnings now shape the financial lives of a large share of households. That makes timing as important as income level.

Three data points showed how income instability is redrawing the paycheck-to-paycheck map:

The share of consumers who live paycheck to paycheck out of necessity is 42%. That share rose from 36% in August, an 18% jump. At the same time, the share of consumers living paycheck to paycheck by choice fell to 29%, down from 37% a year earlier.

Six in 10 consumers earn their primary income outside a fixed salary. Hourly wages are the most common non-salary income source, with 43% of consumers relying on hourly pay as their main source of take-home income. Smaller shares rely on contract work, gig platforms or commission-based pay.

Of consumers living paycheck to paycheck by necessity, 76% rely on non-salaried income. That compares with 57% of consumers who live paycheck to paycheck by choice. Among consumers struggling to pay monthly bills, 51% are paid by the hour.

The report also showed that fixed salaries remain a stabilizing force. Half of consumers who do not live paycheck to paycheck earn a fixed salary. By contrast, consumers who struggle with monthly bills are twice as likely to depend on non-salaried income as financially stable consumers. Gig workers stand out as especially vulnerable, with a much higher likelihood of living paycheck to paycheck and struggling to pay bills.

There are also clear demographic differences. Generation Z consumers are more likely than the general population to earn hourly wages, and hourly workers are more common in rural areas and among single parents. Those patterns suggest that income instability is not spread evenly across the economy.

The positive read is that the problem is becoming easier to define. For financial institutions, payroll providers and payments companies, the opportunity is to build around timing, not just balances.

Faster access to earned wages, smarter bill timing, better cash flow tools and products designed for variable income could help consumers turn irregular pay into more predictable financial control.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.