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Despite rising wages, 61% of Americans are still living paycheck to paycheck

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Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck

#31

Post by adriand »

barbazoo wrote: post #5

> Even among those earning six figures, 42% said they were living paycheck to paycheck, the survey of more than 3,000 adults found. I know there are areas with extremely HCOL, inflation, housing crisis... However, sometimes I do wonder though what some people's budgets are like that they are literally unable to save any money (paycheck to paycheck) making >$100k. Do we know what part lack of financial literacy or sim…

I totally agree with others that costs for childcare and healthcare can easily eat into even large incomes. And for anyone who is making less than six figures and has a family, yes, you have to manage your finances pretty carefully.

However, for many other people, I think a huge part of the problem is consumerism coupled with borrowing. If you are able to be content with what you have or even to downsize, it is much easier to get ahead. And if you avoid all debt except a mortgage, your income will go a lot farther.

People often think about debt as though it is only the interest that matters. But you still need to pay off the principal, if you ever want to be free of it. A $10k credit card debt that you can only apply $500 to per month lingers for a long time.

Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck

#32

Post by sparksparkapach »

ozzythecat wrote: post #9

These kinds of articles tell maybe half the story. In my early 20s, I was earning $120K a year while living in rural Texas. I had an expensive apartment (3 bedroom), a leased Lexus IS, and spent lavishly. I also got a second car (a Honda Fit) for grocery store runs. If this sounds absurd, yeah I know. 2 years of this and I had some 401K savings but no after tax investments. I wasn’t even maxing out the company match.…

Yes, definitely an extreme. 120k in rural texas and you can live quite lavishly. That's 4x the median income in texas, probably even more that that for the area you are in if you described it as rural. You'd have to spend quite a bit on stuff to be living paycheck to paycheck on that salary in texas. the median income in texas was 30k in 2019, probably even lower during the time you are talking about. The people making 100k and living paycheck to paycheck are in high cost of living areas, and can probably only get that salary because they are in that area

Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck

#33

Post by e4e78a06 »

mogadsheu wrote: post #2

The cost of housing combined with manufacturing outsourcing has basically crippled the American working/middle class since the early 2000s. Then add inflation. When Ivy League business school grads are having to save until their 40s to buy homes, what does that imply for the rest of the country?

People feel like they _have_ to live in NYC/SF/LA when they make peanuts. If those people moved to the Midwest they'd have much lower CoL and probably still around the same pay. Amazon pays $15/h wherever you are.

Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck

#34

Post by JoeAltmaier »

JaimeThompson wrote: post #27
fartcannon wrote: post #18

Earlier quoted context omitted.

It's an easy fix. The poor and the middle class need a bailout. They're too big to fail.

The problem for a lot of the poor and middle class is their elected officials will not talk to them since they don't donate to them. Take Texas for example it is rare for the Texas Senators to actually talk to normal people anymore.

It's a hard problem. Texas has 27 million residents. And 2 Senators. If they spent an hour a day talking to constituents and spent 15 minutes with each one, it would take 16,875 years to talk to each one, once.

Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck

#35

Post by time_to_smile »

barbazoo wrote: post #5

> Even among those earning six figures, 42% said they were living paycheck to paycheck, the survey of more than 3,000 adults found. I know there are areas with extremely HCOL, inflation, housing crisis... However, sometimes I do wonder though what some people's budgets are like that they are literally unable to save any money (paycheck to paycheck) making >$100k. Do we know what part lack of financial literacy or sim…

What I find funny about comments like these is that there is clearly a subtle criticism of the very behavior that ultimately pays many of our salaries.

People are encouraged to over spend at ever instance of their life. You go to buy a house, the mortgage company will try to get you spend to the limit of your ability. Every service out there today offers 0% loans to encourage consumer spending so that you can live outside of our means. People are blasted with ads each day encouraging them buy more and more.

It's easy to criticize and make some moral argument about spending, but most of us spend a huge amount of our brain power trying to get people to do more of these things and are paid well for it.

Nearly my whole career I've worked in some part of the marketing world, and when I haven't I worked in e-commerce. Every penny I've made has been trying to get people to spend more and buy more. I worked for a startup that ran ads encouraging people to buy our product rather than have any saving at all. In all my career the concept of "hey what if this leads consumers to an unhealthy spending habits" would be laughed out of the room if brought up.

Now maybe you are one of the few that work in tech and don't either directly attempt to suck money from consumers or spend your day helping other companies doing that, but for the bulk of us it's ridiculous to wave your finger at the spending habits that we, directly or indirectly, work hard every day to encourage.

Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck

#36

Post by harpersealtako »

barbazoo wrote: post #5

> Even among those earning six figures, 42% said they were living paycheck to paycheck, the survey of more than 3,000 adults found. I know there are areas with extremely HCOL, inflation, housing crisis... However, sometimes I do wonder though what some people's budgets are like that they are literally unable to save any money (paycheck to paycheck) making >$100k. Do we know what part lack of financial literacy or sim…

A charitable way of framing it would be "Up to 42% of Americans making 6 figures are so confident in the job market, the economy, etc. that they don't even bother saving money at all because they're confident they can handle an unexpected expense through other means than paying for it with cash savings." I think the 61% stat is kind of so broad as to be useless. A better way of understanding the issue is by breaking down how Americans claim to be able to deal with an unexpected expense [0].

[0]: https://www.federalreserve.gov/publications/2021-economic-we...

Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck

#37

Post by mrguyorama »

JaimeThompson wrote: post #27
fartcannon wrote: post #18

Earlier quoted context omitted.

It's an easy fix. The poor and the middle class need a bailout. They're too big to fail.

The problem for a lot of the poor and middle class is their elected officials will not talk to them since they don't donate to them. Take Texas for example it is rare for the Texas Senators to actually talk to normal people anymore.

Also half of those people think that a bailout of the middle class would be communism

Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck

#38

Post by ChuckNorris89 »

giantg2 wrote: post #25
ChuckNorris89 wrote: post #20

Earlier quoted context omitted.

>But shouldn't a job paying 6 figures have decent insurance? Parent said he/she isn't from the US where this would be the norm. Here in the EU (Austria), in most cases you get no extra private insurance even with a high salary, just your public one, which in some cases may not be enough, especially if you optimize for quality doctors/therapists with short waiting times, which are all private, so you end up having to…

That's fair. I guess the interesting part is that many of the people in the US want public healthcare and generally think that the international examples cover everything.

Like someone else here said it, universal healthcare isn't some magical talisman that makes all your health issues go away as long as you pay your taxes.

Sure, if you have life threatening condition that needs to be addressed ASAP or else you'll die, you usually get taken care of without it ruining you financially like in the US would, but since the public system is massively understaffed and underfunded, then many health issues which are not life threatening but still impact your quality of life, can end up being out of packet, which sucks, as most Europeans aren't exactly rolling in disposable income (but at least they're not heavily in debt either).

For example, in Austria, the amount of free care you get in case of an accident depend on where it happened. If it's at work, or on your way to/from work, then everything is fully covered, but if you get injured in your spare time, then only life threatening stuff is covered, for the rest, quality of life issues, you have to pay out of packet to have them fixed or have private accident insurance. Basically the public healthcare covers as little as to get you able-bodied to get back to work again, that's it. If you also want to feel 100% again, then you gotta pay up out of pocket.

Since medical school is basically free, Austria has 3x the doctors per capita than the US, yet waiting times for specialists or some procedures are far longer. Why is that, you ask? Because most doctors here don't like being burned out in the understaffed public system, so once they served their "minimum sentence" in the public system to cover their "debt" for their public education, they go into private practice, which means that despite having 3x the doctors than the US, the public system is in a perpetual shortage of personnel.

The state just doesn't have enough money to pay for every heath issue for everyone, but only the gravest of heath issues, and with our ageing population and stagnating economy, the situation is getting worse by the year. I heard Sweden, Finland and other rich EU countries have similar issues in their public system.

Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck

#40

Post by 01100011 »

ed25519FUUU wrote: post #15

The fed is in an impossible situation. Raise rates to fight inflation and the stock market tanks and we enter into a recession, unemployment. Or ignore inflation and the middle class is slowly boiled in raising gasoline, housing, and other prices. Either way the middle class and poor get screwed but the wealthy who took out ultra low interest fixed rate loans to buy up assets all over the country are going to do fine…

Goosing asset prices which are only owned by the richest 55% of Americans, and almost entirely by the top 1%, in order to benefit the lower and middle classes is the same old trickle down economics which had led us to the massive wealth gap we have today.

The solution is to let asset bubbles deflate and do more targeted fiscal stimulus, less monetary stimulus, and use tax policy, not artificially low rate government borrowing, to pay for it. Our government is increasingly ineffective due to political divisions and ideological puritanism so I understand why the fed feels it needs to act but I feel like monetary policy is too broad of a brush that generally only benefits the moneyed elites.

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