Walmart hopes new paycheck app will help workers avoid payday loans

Inside Subprime: December 14, 2017

By Caroline Thompson

A new app used by retail giant Walmart will allow employees to access portions of their paycheck before their next payday, according to a New York Times report. Walmart has long been criticized by fair wage activists for their employees’ low pay and unpredictable schedules, and Even, the app seems to be a way for the big box empire to address these concerns.

“Living paycheck to paycheck is too common at Walmart and that is the problem that Walmart should be trying to solve,” the Organization United for Respect at Walmart told The Chicago Tribune in response to comments by Walmart’s COO Judith McKenna, who said the app should help employees feel “more confident and more settled at work,” and avoid taking out payday loans to cover financial bumps in the road.

While it’s nice that Walmart employees won’t have to wait two weeks to access money when they need it, experts aren’t sure that the new system will help employees who are struggling financially avoid predatory lenders. Walmart pays a starting wage of $9/hour, which in many parts of the country is difficult, if not impossible, to live on.

According to The New York Times, “Walmart executives say that raising wages alone will not solve the problems many Americans have managing their cash flow. Rather, the company says, the new service is meant to help workers with the broader issues of financial management.”

The Even app allows employees to obtain a part of their biweekly paycheck early for free, so long as it’s done less than eight times per year. Employees who need to use this service more than eight times will have to pay a fee for the service. In addition to allowing these limited paycheck deductions, the app also helps users budget, connecting directly to their checking accounts and tracking how much they pay for housing, groceries, bills and other expenses, and even calculating how much they can safely spend until their next paycheck.

While some Walmart employees have been enjoying using the app, others aren’t so sure it’s going to change much for them.

“That app sounds helpful,’’ said Matt Fixel, a 29-year-old Walmart employee, who makes $10.20/hour stocking shelves in Arizona. “I would prefer it if they gave me more hours.”

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