In January, HR administrations all over the country reminded employees to be aware about the two percent decline in paychecks due to the expiration of the payroll tax cut. Economists expected the workforce to save more and spend less, with payroll management having to educate workers on the increase. However, analysts found that many workers did not notice the decrease in payroll and that the projected lapse in the economy did not happen.
According to a new perception survey by Bankrate.com, around 52 percent of workers in the South and West and 41 percent in the Northeast and Midwest did not notice the payroll tax change. In addition, 34 percent with some college education and 23 percent with less education said they cut back on spending due to the tax increase. The report also found that seven percent of workers reported that it has not affected their finances.
Despite the belief among economic experts that the two percent decline in paychecks would force a decrease in economic recovery, Bankrate.com's survey reveals that workers were prepared. However, some economic professionals suggest that the results of the tax hike might take longer than two months to come to light.
