Economic Impact of the Payday Lending Industry

IHS Global Insight conducted a comprehensive study analyzing the economic impact of the payday loan industry nationally and in states with storefront locations. Findings illustrate "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.

Full results of the study (PDF)
Review study highlights on a national level (PDF)
State-level economic impact data

Key Findings:

• In addition to being a valuable source of credit for many consumers, the payday loan industry makes 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 lending industry supports more than 155,000 jobs nationally¹, including 77,088 people directly employed in 23,586 jobs in storefront locations.²

• The industry indirectly created another 28,453 jobs in supplier industries.

• Payday loan store and supplier industry employees induced the creation of 50,039 jobs through the purchase of goods and services using earned wages.

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.³

• Suppliers to the payday lending 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 lending industry helped to generate more than $2.6 billion in federal, state, and local taxes in 2007.
  
  

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1. Includes jobs in industries supplying input goods to the payday lending industry as well as jobs sustained due to the spending of wages in local economies by payday lending employees.
2. Direct employment includes only store employees and not those employed in corporate headquarters or parent organizations.
3. Labor income includes other benefits besides wages, such as employer paid health insurance benefits, and employer contributions to Social Security, Medicare, and 401K plans.