IHS Global Insight conducted a comprehensive study analyzing the economic impact of the payday loans industry nationally and in states with storefront locations. Findings illustrate that payday loans have "measurable and significant" economic benefits to local economies directly through employment, compensation and taxes, as well as through indirect and induced relationships with suppliers and other industries.
Key findings of payday loans industrial study
In addition to being a valuable source of credit for many consumers, the payday loans make significant contributions to U.S. and state economies. The industry contributed over $10 billion to the U.S. gross domestic product (GDP) in 2007.
The payday loans industry supports over 155,000 jobs nationally, including 77,088 people directly employed in 23,586 jobs in storefront locations. Overall, the total labor income impact from the payday loan industry is $6.4 billion:
- Through direct employment, payday loan stores contributed $2.9 billion in labor income, which translated to approximately $37,689 per store employee.
- Suppliers to the payday loans industry contributed $1.4 billion in labor income as an indirect result of the revenues generated by the payday loan industry.
- $2.1 billion was generated from the wages of payday loan store employees and supplier industries employees as they were spent in local economies.
The payday loans industry helped to generate over $2.6 billion in federal, state and local taxes in 2007.
By Community Financial Services Association
