"The essence of poverty is that it annihilates the future."

- George Orwell

Timing of pay matters

Have you ever asked yourself where do 30 - day pay cycles come from? Prior to 1760 getting paid weekly was the norm. In fact, the earliest recordings of weekly pay is found in Deuteronomy 24:15.  

"Pay him his wages each day before sunset, because he is poor and is counting on it."

When the Industrial Age started in 1760 many of these manufacturing corporations hired thousands of people. Due to the administrative and time burden, weekly wages were replaced with monthly salaries, which was beneficial for companies but not so for employees.

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Cognition changes with changing financial conditions

In 2013 Princeton researchers were able to prove that a financially stressed person’s cognitive function is diminished by the constant and all-consuming effort of coping with the immediate effects of having little money. On average, a person preoccupied with money problems exhibited a drop in cognitive function similar to a 13-point dip in IQ.

Payday Millionaire Effect

We’ve seen this phenomenon play out in monthly pay cycles. Studies show that the monthly pay cycle drives irregular spending, or the ‘payday millionaire’ effect, where employees splurge on wages they previously didn’t have access to. This indulging in the earlier part of the month exposes them to cash flow issues, that gets worse as they get to the last week of the month. 

With little or nothing left over to carry them through the month, employees are prone to dipping into savings or accessing credit to cover any unexpected expense that arises.

Increased likelihood of accessing savings and expensive credit

Without Level employee is most likely to dip into savings or access expensive credit

The socio - economic challenge

From 2009 to 2019 unsecured lending has quadrupled to R225 Billion

(Source: Differential Capital)

The unrestricted power of unsecured lenders is burying low income earners into the same inescapable poverty they’ve been fighting for generations.

Monthly pay cycles drive irregular spending which leaves employees prone to cash flow shortages, and increases the likelihood of them dipping into their savings or accessing credit

Our daily money management platform allows employees to manage their shortfall, by allowing them to build up a savings buffer against future unexpected costs and access their salary when they need it.

Avoiding one penalty at a time

Reducing one debt at a time

Realising one dream at a time

What we have discovered is that we are not alone in our mission. Every business that offers Level to their staff, goes a long way in addressing the social and economic injustices in our society. If you’re interested in knowing more, please do get in touch.

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