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Tilly on Apps That Disrupt the Payday Cycle

Urban Planning Professor Chris Tilly spoke to Bloomberg Law about new apps that allow workers to tap into their paychecks ahead of the traditional two-week cycle. At least five tech startups have entered the market, which is primarily aimed at workers who live paycheck to paycheck. By accessing their earnings earlier, people will gain more flexibility in paying bills and avoiding high-interest credit card charges, the services say. However, some observers say that speeding up pay cycles could mask a larger problem: stagnant wages. “The smoothing of pay availability over a pay period is advantageous to people who have very little savings,” said Tilly, a labor economist. “What it doesn’t address is why those people have very little savings in the first place. Low pay is low pay, and this is being intensified by increasing housing, health care and other costs in many places.”