63% of Americans are living paycheck to paycheck — including nearly half of six-figure earners

[beijingwalker]

63% of Americans are living paycheck to paycheck — including nearly half of six-figure earners​

PUBLISHED MON, OCT 24 202210:29 AM EDT
Jessica Dickler@JDICKLER

KEY POINTS

• With persistent inflation eroding wage gains, the number of Americans living paycheck to paycheck is near a historic high, according to a recent report.
• Almost half of those earning more than $100,000 say they are just getting by.

As rising prices continue to outpace wage gains, families are finding less cushion in their monthly budget.

As of September, 63% of Americans were living paycheck to paycheck, according to a recent LendingClub report — near the 64% historic high hit in March. A year ago, the number of adults who felt strained was closer to 57%.

“Consumers are not able to keep up with the pace that inflation is increasing,” said Anuj Nayar, LendingClub’s financial health officer.

“Being employed is no longer enough for the everyday American,” Nayar said. “Wage growth has been inadequate, leaving more consumers than ever with little to nothing left over after managing monthly expenses.”

Inflation has steadily caused real wages to decline.

The consumer price index, which measures the average change in prices for consumer goods and services, was up 8.2% year over year in the latest reading, still hovering near the highest levels since the early 1980s.

Real average hourly earnings fell 0.1% for the month and are down 3% from a year ago, according to the Bureau of Labor Statistics.

A separate report by Salary Finance found that two-thirds of working adults said they are worse off financially than they were a year ago.

Even high-income earners are stretched too thin, LendingClub said. Of those earning more than six figures, 49% reported living paycheck to paycheck, a jump from the previous year’s 38%.

As a result, many Americans have dipped into their cash reserves or gone into debt.

At this rate, financial distress could reach an all-time high by the end of 2022, according to Nayar.

“With inflationary pressures not expected to subside anytime soon, living paycheck to paycheck has become the norm,” he said.

For its part, the Federal Reserve hiked its target federal funds rate by 0.75 percentage points for the third time in a row to calm runaway inflation.

The central bank has indicated even more increases are coming until inflation shows clear signs of a pullback.

63% of Americans are living paycheck to paycheck — including nearly half of six-figure earners

With persistent inflation eating away at wage gains, more Americans are struggling financially. The share living paycheck to paycheck is near a historic high.

www.cnbc.com

 

[Riea]

I worked for this furniture store for couple of months in 2014 and one time we get this doctor who couldn't even afford and 4k Sofa. I found that unbelievable a doctor living check to check.

 

[beijingwalker]

Dollar based GDP is increasingly becoming meaningless, US massively boosts its GDP by this super high inflation, but American people have to suffer, the real income is decreasing fast, previously middle class population now is being pushed towards poverty.

 

[beijingwalker]

I worked for this furniture store for couple of months in 2014 and one time we get this doctor who couldn't even afford and 4k Sofa. I found that unbelievable a doctor living check to check.

Same goes to defence budget numbers, a big part of US massive defence budget money goes to wages, China's real defence budget could be actually bigger than US, this is why China is able to commission new weapons and modernize much faster than US with a smaller budget.

 

[Menthol]

USA, no needs to worry my friend.

We are going to pay for you, all of it.

Now, it's time for us to eat dirt.

C'mon everybody, show your solidarity, like it or not.

 

[lastofthepatriots]

I worked for this furniture store for couple of months in 2014 and one time we get this doctor who couldn't even afford and 4k Sofa. I found that unbelievable a doctor living check to check.

I would never in my life spend 4K on a sofa.

 

[Riea]

I would never in my life spend 4K on a sofa.

You really missing out that smooth relaxing leather Couch.

 

[KAL-EL]

I would never in my life spend 4K on a sofa.

Normally wouldn't feed into the OP's usual spamming narrative

But speaking of 4K, I know someone who spent nearly 4k on a turntable.

Now I consider myself to be an audiophile, but no way in hell would I spend that much on a turntable.

 

[lastofthepatriots]

You really missing out that smooth relaxing leather Couch.

I got a charpai at home.

 

[MH.Yang]

You really missing out that smooth relaxing leather Couch.

The Chinese people are willing to pay high prices for furniture. But they prefer wooden furniture to leather.

My tea table, it is my favorite furniture. I spent a lot of time and money to get it.

 

[Wergeland]

Keeping up with the jones effect

 

[beijingwalker]

Over Two Thirds Of U.S. States Do Not Have Enough Cash To Pay Their Obligations​

Mayra Rodriguez Valladares
Senior Contributor
Oct 25, 2022,12:00am EDT

Thirty-one states, or over two-thirds of U.S. states, do not have enough cash to pay their bills. For the thirteenth year in a row, nonpartisan accounting watchdog Truth in Accounting (TIA) released its ‘Financial State of the States’ report today describing the weak financial condition of numerous individual states.

According to TIA’s methodology, to balance the budget as required by law in forty-nine states, “elected officials have not included the true costs of the government in their budget calculations and have pushed costs onto future taxpayers.”

TIA divides the amount of funds needed to pay bills by the number of state taxpayers to produce what it calls the Taxpayer Burden™. TIA’s analysis is based on the most recent available data from state financials; for most states, fiscal year (FY) 2021 ran from June 1, 2020, to June 30, 2021.

At the end of fiscal year 2021, all states had a total debt level of $1.2 trillion, a 26% increase from FY 2020.

This news is worrisome, especially in a rising inflationary environment and one in which some economic indicators show us close to, or even in, a recession.

The most indebted states’ cost of borrowing will rise making it even harder to resolve their fiscal challenges. When unemployment starts to rise, this will compound states’ fiscal challenges.

The fact that thirty-one states cannot pay their bills now is an improvement from 2018 when forty states could not pay their bills; in 2021, the number had improved to thirty-nine states.

When I asked TIA CEO Sheila Weinberg, what accounted for what looks like an improvement in state finances, she stated that “temporary record gains in the stock market during that time and the Covid-relief money.

Governors are claiming surpluses, while their financial reports and retirement plan numbers e indicate their state is deep in debt. The governors are only looking at the short term while taxpayers need to be concerned about the future.”

As in previous years, unfunded retirement liabilities were the largest contributing factor to states’ indebtedness.

Weinberg explained that “one of the ways states make their budgets look balanced, when they are not, is by shortchanging public pension and OPEB funds.

This practice has resulted in a $699 billion shortfall in pension funds and a $665 billion shortfall in OPEB [other post-employment benefits] funds.”

Elected officials have promised these retirement benefits to employees, including teachers, firefighters, and police, but unfortunately most state governments have not allocated enough funds to pay these benefits.

Total unfunded pension liabilities among the fifty states of $699 billion means that for every $1 of promised pension benefits, states have only set aside seventy-two cents.

The states that are in the best shape are the same as in 2021, with Alaska in the best shape. TIA calls a state that is in good shape a ‘Sunshine State.” Alaska had $41.5 billion available to pay $15.4 billion worth of obligations. Alaska’s long-term debt declined primarily due to a decrease in unearned revenue and recognizing the Coronavirus Relief Funds.

Unfortunately, New Jersey’s fiscal situation is in the worst condition of all fifty states and worsened from last year when it was ranked 29th.

This is the thirteenth year in a row that New Jersey is in the Bottom 5 Sinkhole States category; it was the only state to experience a decrease in its financial condition.

According to the TIA report, “the money needed to pay bills increased by more than $12.5 billion. Like all states, New Jersey’s pension plan assets experienced significant, short-term increases in values, yet the state’s portion of their Net Pension Liability increased because they assumed new pension responsibility from their local governments.”

More Than 30 U.S. States Don't Have Enough Cash To Pay Their Bills

Thirty-one states do not have enough cash to pay their bills. To balance the budget as required by law in forty-nine states, elected officials have not included the true costs of the government in their budget calculations and have pushed costs onto future taxpayers.

www.forbes.com

 

[StraightEdge]

Over Two Thirds Of U.S. States Do Not Have Enough Cash To Pay Their Obligations​

Mayra Rodriguez Valladares
Senior Contributor
Oct 25, 2022,12:00am EDT

Thirty-one states, or over two-thirds of U.S. states, do not have enough cash to pay their bills. For the thirteenth year in a row, nonpartisan accounting watchdog Truth in Accounting (TIA) released its ‘Financial State of the States’ report today describing the weak financial condition of numerous individual states.

According to TIA’s methodology, to balance the budget as required by law in forty-nine states, “elected officials have not included the true costs of the government in their budget calculations and have pushed costs onto future taxpayers.”

TIA divides the amount of funds needed to pay bills by the number of state taxpayers to produce what it calls the Taxpayer Burden™. TIA’s analysis is based on the most recent available data from state financials; for most states, fiscal year (FY) 2021 ran from June 1, 2020, to June 30, 2021.

At the end of fiscal year 2021, all states had a total debt level of $1.2 trillion, a 26% increase from FY 2020.

This news is worrisome, especially in a rising inflationary environment and one in which some economic indicators show us close to, or even in, a recession.

The most indebted states’ cost of borrowing will rise making it even harder to resolve their fiscal challenges. When unemployment starts to rise, this will compound states’ fiscal challenges.

The fact that thirty-one states cannot pay their bills now is an improvement from 2018 when forty states could not pay their bills; in 2021, the number had improved to thirty-nine states.

When I asked TIA CEO Sheila Weinberg, what accounted for what looks like an improvement in state finances, she stated that “temporary record gains in the stock market during that time and the Covid-relief money.

Governors are claiming surpluses, while their financial reports and retirement plan numbers e indicate their state is deep in debt. The governors are only looking at the short term while taxpayers need to be concerned about the future.”

As in previous years, unfunded retirement liabilities were the largest contributing factor to states’ indebtedness.

Weinberg explained that “one of the ways states make their budgets look balanced, when they are not, is by shortchanging public pension and OPEB funds.

This practice has resulted in a $699 billion shortfall in pension funds and a $665 billion shortfall in OPEB [other post-employment benefits] funds.”

Elected officials have promised these retirement benefits to employees, including teachers, firefighters, and police, but unfortunately most state governments have not allocated enough funds to pay these benefits.

Total unfunded pension liabilities among the fifty states of $699 billion means that for every $1 of promised pension benefits, states have only set aside seventy-two cents.

The states that are in the best shape are the same as in 2021, with Alaska in the best shape. TIA calls a state that is in good shape a ‘Sunshine State.” Alaska had $41.5 billion available to pay $15.4 billion worth of obligations. Alaska’s long-term debt declined primarily due to a decrease in unearned revenue and recognizing the Coronavirus Relief Funds.

Unfortunately, New Jersey’s fiscal situation is in the worst condition of all fifty states and worsened from last year when it was ranked 29th.

This is the thirteenth year in a row that New Jersey is in the Bottom 5 Sinkhole States category; it was the only state to experience a decrease in its financial condition.

According to the TIA report, “the money needed to pay bills increased by more than $12.5 billion. Like all states, New Jersey’s pension plan assets experienced significant, short-term increases in values, yet the state’s portion of their Net Pension Liability increased because they assumed new pension responsibility from their local governments.”

More Than 30 U.S. States Don't Have Enough Cash To Pay Their Bills

Thirty-one states do not have enough cash to pay their bills. To balance the budget as required by law in forty-nine states, elected officials have not included the true costs of the government in their budget calculations and have pushed costs onto future taxpayers.

www.forbes.com

I believe the western mentality is different from Asian. I buy a house when I am in a position to (almost) pay off the entire cost. I don't use credit cards like there's no tomorrow. We buy iPhones when we know we have surplus to spend. I find it weird when I see many people in western society have cars and expensive gadgets but no bank balance. That's just so weird.

 

[jhungary]

I believe the western mentality is different from Asian. I buy a house when I am in a position to (almost) pay off the entire cost. I don't use credit cards like there's no tomorrow. We buy iPhones when we know we have surplus to spend. I find it weird when I see many people in western society have cars and expensive gadgets but no bank balance. That's just so weird.

I used to earn around 85,000 a year, I went paycheck to paycheck, my wife earns around 120,000 a year, she went paycheck to paycheck. That's just how people spend their earning.

If you ask most Western people, they will tell you they don't put money in bank, they will rather spend it on holiday and buying luxury item and so on, their concept of money is to enjoy life. It's rather pointless to put the money in a bank and store digitally and gain minimal interest. I would much rather it got turn into things I can enjoy.

On the other hand, I have a family trust oversee 5 factories in China, US and Vietnam. So money for me is not really an issue. That probably also contribute to the spending habit.

Normally wouldn't feed into the OP's usual spamming narrative

But speaking of 4K, I know someone who spent nearly 4k on a turntable.

Now I consider myself to be an audiophile, but no way in hell would I spend that much on a turntable.

4K is not really any money if you are talking about dumping it into your hobby. A friend of mine spend that much on a collectible toy locomotive. And I spend that much on my coin and uniform collection (I collect military uniform and once spend around 20k for an authentic Civil War confederate uniform.) I mean, if you like something, you don't see the money side of value, you see the "value" side of value...

You really missing out that smooth relaxing leather Couch.

My sister had a 2 seater leather sofa that set her back around 2000 USD. She has the option to go with the Lazyboy as well, but she didn't go for it, that lazyboy would have cost her another 800.

But man, I would have to say, that beat the crap out of my IKEA sofa.....lol I can sleep on that leather sofa all day...

 

[Beast]

USA, no needs to worry my friend.

We are going to pay for you, all of it.

Now, it's time for us to eat dirt.

C'mon everybody, show your solidarity, like it or not.

Throw the US dollar and replace with another one. Case closed.