Sunday, July 31, 2022

150 MILLION IN POVERTY











Over half of Americans are living ‘paycheck-to-paycheck’



ByKaren Graham
Published July 31, 2022


New York City: — Photo: © Digital Journal

With inflation still near 40-year highs, more than half of all Americans are living paycheck to paycheck. And this issue covers workers across all income levels.

According to an opinion piece by Peter Coy in the New York Times, we don’t have a good agreed-upon definition for what living paycheck to paycheck really means.

Mr. Coy says the definition of living paycheck to paycheck is much too broad. He writes, “It seems to me that “paycheck to paycheck” should be reserved for people whose monthly nut — unavoidable expenses like rent or mortgage, utilities, gasoline, and food — consumes everything they bring home. One significant emergency expense such as a transmission repair or hospital bill can break them.”

However, we can’t refer to people living paycheck to paycheck as the working poor any longer. The working poor are often low-wage earners with limited skills but can include those with advanced degrees and skills.

Highly skilled people can be hit with things like an industry downturn, and limited success in securing regular employment commensurate with their skills. All this contributes to living paycheck to paycheck.

According to a new LendingClub report, 58 percent of American adults, or nearly 150,000 million people live paycheck to paycheck. Believe it or not, but this is down from 61 percent in April of 2022.

And yes, this includes top earners. Of those earning $250,000 or more, 30 percent are living paycheck to paycheck.

The largest banks operating in the US market have sufficient resources to withstand a severe economic downturn, the Federal Reserve says –


“Consumers have experienced a tough last couple of years as different factors have affected their financial lifestyle, and there seems to be little relief in sight,” said Anuj Nayar, LendingClub’s financial health officer, according to CNBC News.

Paychecks don’t stretch as far with inflation

In our post-COVID pandemic world, the consumer price index, a key inflation gauge, rose to 8.6 percent in May. This was the highest increase since December 1981. And consumers are feeling it when they fill the car up, or just buy groceries.

These rising prices also mean that workers have taken another pay cut. Think about this – when wages do not rise as fast as inflation, paychecks don’t stretch as far – making it more difficult to cover monthly expenses and set money aside.

We haven’t addressed credit card debt, which, by the way, has risen year over year, reaching $841 billion in the first three months of 2022, according to a separate report from the Federal Reserve Bank of New York.

At this rate, balances could soon reach record levels amid higher prices for gas, groceries, and housing, among other necessities, according to Ted Rossman, a senior industry analyst at CreditCards.com.



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