Despite recent good news in the American economy, more are living paycheck to paycheck.
Living paycheck to paycheck is often not treated as the dire threat it really is. Back in the 2000s, the declining savings rate was excused because, the “experts” said, the values of people’s homes were going up. We all know what happened to that “wealth” in 2008!
A healthy economy requires that people save money above what the need to live. That means Americans need both better savings habits and higher paying jobs.
According to CBS News, “Vast number of Americans live paycheck to paycheck.”
With unemployment in the U.S. at its lowest level in 16 years, experts are prone to talk about the economy as if it has fully recovered from the housing crash. But other measures of how Americans are doing reveal a darker picture.
Almost 8 out of 10 American workers say they live paycheck to paycheck to make ends meet, according to a new survey from CareerBuilder. That can force people to take on debt or otherwise struggle when an unexpected bill arises. It also raises questions about the stability of the broader economy given that consumer spending accounts for more than two-thirds of activity.
The survey highlights a troubling trend in household finances: More than eight years since the end of the recession, the share of Americans who are living on the financial edge is growing, said Mike Erwin, a spokesman for CareerBuilder. While some may want to blame Americans’ spendthrift ways, Erwin pointed to two trends that continue to put financial stress on households: stagnant wages and the rising cost of everything from education to many consumer goods.
“Living paycheck to paycheck is the new way of life for U.S. workers,” he said. “It’s not just one salary range. It’s pretty much across the board, and it’s trending in the wrong direction.”
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