Public Vs Private: Do Strategies to Make Ends Meet Moderate the Relationship between Financial Insecurity and Stress?

Background/Purpose: Low-wage workers are at increased risk of experiencing material hardships because their low earnings may be insufficient to make ends meet. To negotiate these hardships, workers employ various strategies, which include private strategies like working more and seeking financial support from family, and public strategies such as using public benefits programs. However, using particular types of strategies may produce even more stress than the hardships alone. Despite the crucial role of these strategies in negotiating hardships among low-wage workers, there is a dearth of research examining how the interaction between hardships and strategies moderates the relationship between hardships and stress. This study aims to understand how financial insecurity among low-wage workers is related to perceived stress, including potential interaction effects by type of strategies.

Methods: Cross-sectional data were collected from security guards in Western Pennsylvania through an online survey from July 2018 to January 2019 (N=166). The survey included questions about financial insecurity, perceived stress, strategies to manage hardships, and sociodemographic variables. Higher scores indicate higher levels of financial insecurity and perceived stress. Strategy use was categorized as follows: 1) none; 2) public strategies only (i.e., benefits programs such as Medicaid, EITC, and SNAP); 3) private strategies only (i.e., relying on family/friends for financial help, using payday loans or pawnshops, or working overtime); 4) both public and private strategies. ANOVA was used to assess differences in perceived stress among workers relying on different types of strategies. Multivariate regression modeling was used to model associations between perceived stress and financial insecurity, including interaction effects by the type of strategy. Control variables included race/ethnicity, gender, wage, education, and number of children.

Results: Results revealed that levels of perceived stress significantly differed based on the type of strategy (F_{[3, 162]}=6.61, p<.001). Specifically, workers using no strategies reported significantly lower levels of perceived stress than did the other groups using private strategies alone (p=.001) and using both private and public strategies (p<.001). Multivariate results showed that financial insecurity and some strategy types (i.e., private only and both public and private) were significantly associated with perceived stress (F_{[10, 155]}=8.27, p<.001, r²=.348, adj. r²=.306), controlling for sociodemographic variables. The final model, including the financial insecurity by strategy interaction term, explained 37.6% of variance in perceived stress (F _{[13, 152]}=7.06, p<.001, r²=.376, adj. r²=.323). The interaction term indicated that the relationship between financial insecurity and perceived stress was significantly stronger for those relying on private strategies alone (β=.809, t=2.62, p=.01) compared to those not using private strategies.

Conclusions/Implications: Findings suggest that being financially insecure and having to use strategies to make ends meet are significant predictors of stress among low-wage workers. Most notably, employing private strategies alone to address financial insecurity takes a heavy toll on these workers by elevating their stress levels. These findings highlight the need for social work advocacy to expand access to public benefits and local services. These results suggest that such work will relieve not only hardships but also stress, which has implications for individual, family, and community well-being.