Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

cnbc.com

Post reply on HN
Print view View original

141–150 of 155 posts

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

#141

Post by chadash »

ska wrote: post #135
chadash wrote: post #79

Earlier quoted context omitted.

A lot of people on HN don't have families, so let me illustrate some costs. Let's say you are a married couple with 2 young kids and you make a combined $150,000k and you live in Boston. Federal tax: ~26k State tax: ~7.5k Work covers 20% of health insurance premium, leaving you with 20%: ~4k OK, now we are at $112,500 take home pay. 2 BR apartment accessible to public transit in Boston and in a safe neighborhood, let…

The hand waving of 43.5 to 30k is probably being unrealistically conservative. Probably closer to 20 than 30.

Oh, absolutely. All these numbers are pretty conservative. Real life is full of situations like cars breaking, HVAC systems getting too old to repair and daycare closing down for a week and now I need to fly grandpa in with a day's notice to cover for me so that I can go to work.

My point is that HN is full of young people without families who can't imagine how other people aren't saving money. Meanwhile, the cost of raising two or three kids in a high cost of living area would buy a single person a lifestyle that most people would agree is pretty lavish.

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

#142

Post by anm89 »

marcusverus wrote: post #134
yladiz wrote: post #52

Earlier quoted context omitted.

Paycheck to paycheck generally means that there is little money left for “discretionary” spending, and even assuming there is a large percentage of people who spend when they shouldn’t, 61% is staggering and can’t be explained by that reductive argument alone. Assuming it is correct, to be that high indicates more systemic issues in the system.

The idea that most American households are perched precariously on the edge of financial ruin is a favorite trope of politicians, but it is pure fiction. Just look at consumer household data since the COVID crash in Q2 2021. If folks were on the edge of bankruptcy, the 2020 crash (which sent unemployment through the roof--briefly into the teens! ) should have wreaked havoc, right? What should have happened to credit…

from the perspective of many in the middle class it wasn't the worst economic crisis in a decade, it was the biggest windfall of a life time. which exactly aligns with the fact that people were reducing debt.

Who exactly was this period such a crisis for? The crisis is coming now for the people who need to buy inflated goods as the stimulus is wearing off.

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

#143

Post by anm89 »

dragonwriter wrote: post #46
legitster wrote: post #41

We make 6 figures and live paycheck to paycheck... but only because I am socking away so much money into stock purchases, 401k, HSA, etc. This isn't a very good metric for determining financial health.

If you have a significant rate of positive saving/investment from income surplus to current consumption, you are not living “paycheck to paycheck”.

If it's going into restricted accounts like 401ks and HSAs you could be putting away a lot and still very literally be pay check to paycheck for your monthly expenses.

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

#144

Post by zamfi »

yladiz wrote: post #99
zamfi wrote: post #87

Earlier quoted context omitted.

My point is that people's non-discretionary spending can grow to meet income, rendering "paycheck to paycheck" kind of meaningless. The family of 4 making $150k and spending not-cheapest-option $40k on childcare and not-cheapest-option $40k on groceries from Whole Foods (or wherever), while paying $30k annually in not-cheapest-option rent, may also believe they have no discretionary income. But that doesn't mean the…

Sure, but most families don’t make that much money so it’s kind of a false dilemma and so I disagree that “paycheck to paycheck” is rendered meaningless because in many cases discretionary spending simply can’t just increase because there is little left after the nondiscretionary money is spent.

I think you missed my point, as it’s not about the amount of money. Unless your claim is that 61% of Americans simply cannot move to a location with cheaper rent, or eat less expensive food, my point is that nondiscretionary spending also captures fluctuates with discretion, and that’s not captured here.

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

#145

Post by amrocha »

s1artibartfast wrote: post #138
amrocha wrote: post #128

Earlier quoted context omitted.

Nowhere in the US has a marginal tax rate of 40% let alone actual rate at 100K. I'm also very suspicious that it would cost 40K per year to rent a reasonable place for 1 or 2 people anywhere in the US except maybe SF

>Nowhere in the US has a marginal tax rate of 40% let alone actual rate at 100K. PS the highest marginal tax rate in the US is 50.3%. Federal rate of 37% and California rate of 13.3%.

Ah my bad, looks like I had the wrong numbers

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

#146

Post by amrocha »

s1artibartfast wrote: post #133
amrocha wrote: post #128

Earlier quoted context omitted.

Nowhere in the US has a marginal tax rate of 40% let alone actual rate at 100K. I'm also very suspicious that it would cost 40K per year to rent a reasonable place for 1 or 2 people anywhere in the US except maybe SF

I pay 35% actual rate between California and Federal taxes. IF I were self employed OSADI tax would add another 6.2%. ...... EXAMPLE: 120k income breakdown: Federal actual rate 16.5% (24% marginal) CA State actual rate 6.4% (9.3% marginal) Medicare rate 2.9% OSDI rate 12.4 % CA SDI rate 1.0% = 39% right there

Oh wow, I didn't know freelancers have a higher tax burden, thanks for the heads up!

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

#147

Post by marcusverus »

bradlys wrote: post #137
marcusverus wrote: post #134

Earlier quoted context omitted.

The idea that most American households are perched precariously on the edge of financial ruin is a favorite trope of politicians, but it is pure fiction. Just look at consumer household data since the COVID crash in Q2 2021. If folks were on the edge of bankruptcy, the 2020 crash (which sent unemployment through the roof--briefly into the teens! ) should have wreaked havoc, right? What should have happened to credit…

Wouldn’t debt going down generally mean people were unable to leverage more debt? In that instance of home equity debt going down - wouldn’t it mean that the mortgages were being paid off faster than they were being made? (In absolute dollar sense) To me - that sounds like people stopped getting mortgages… Which is an affordability crisis. Same with credit card debt.

> Wouldn’t debt going down generally mean people were unable to leverage more debt?

People were clearly able to leverage more debt based on the auto- and mortgage debt figures. Credit Card debt would not go down if people were strapped for cash. If you're worried about making rent next month, why would you be paying more than the minimum on your credit card? You wouldn't. Hence, if credit card debt is going down, it's because people had cash on hand and weren't immediately concerned about their ability to pay the bills--hence my point; falling cc debt indicates that people were not in a precarious position.

> In that instance of home equity debt going down - wouldn’t it mean that the mortgages were being paid off faster than they were being made? (In absolute dollar sense) To me - that sounds like people stopped getting mortgages… Which is an affordability crisis.

You're confusing Home Equity debt with Mortgage debt. HE debt is when someone borrows against their home equity so that they can 'spend' the equity they have in their home. It's low-interest, collateral-backed consumer debt. This type of debt went DOWN, indicating (again) that people had cash on hand and didn't have an immediate need for it.

Auto- and Mortgage debt went UP, indicating that people were buying cars and houses.

This is evidence of something, but it's not evidence that the American people were struggling to make ends meet during the crash. The fact that Americans were paying down debt and buying cars and houses during an economic crisis clearly belies the idea that most American households are on the verge of financial ruin. They said the same thing before the crisis, and folks clearly did just fine.

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

#148

Post by dogman144 »

Hermitian909 wrote: post #132
dogman144 wrote: post #45

Earlier quoted context omitted.

Have you lived in NYC or SF? Yes, it's doable for nearly everyone to stash some amount of money away, sub-$1k or whatever. However, if you're in the zone b/t $100k/yr and say $250k/yr, it's entirely possible to have your act together financially, and not be able to save a relevant amount due to the cost of basically existing, responsible student loans and a simple social life. The amount of money you're able to save…

This doesn't quite jive with my experience living in SF. I have an older but comfortable apartment close to BART and an active social life (had lol). Pre-pandemic my CoL was ~40k. I'm fortunate to be on the higher end of dev salaries so I don't need to spend this little but living a life I enjoy this is just how much I end up spending. I have friends and colleagues whose experience matches yours, some have come to me…

Do you have kids, do you have a dual income couple, and so on.

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

#149

Post by s1artibartfast »

amrocha wrote: post #145
s1artibartfast wrote: post #138

Earlier quoted context omitted.

>Nowhere in the US has a marginal tax rate of 40% let alone actual rate at 100K. PS the highest marginal tax rate in the US is 50.3%. Federal rate of 37% and California rate of 13.3%.

Ah my bad, looks like I had the wrong numbers

Thanks for the acknowledgement. I think tax burden is a valid part of the discussion when we are talking about the affordability crisis. I take it kinda personally because I'm already at 35% and looking at another 10% of my pretax income going to property taxes if I want to buy a home for my family.

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

#150

Post by [deleted] »

chadash wrote: post #141
ska wrote: post #135

Earlier quoted context omitted.

The hand waving of 43.5 to 30k is probably being unrealistically conservative. Probably closer to 20 than 30.

Oh, absolutely. All these numbers are pretty conservative. Real life is full of situations like cars breaking, HVAC systems getting too old to repair and daycare closing down for a week and now I need to fly grandpa in with a day's notice to cover for me so that I can go to work. My point is that HN is full of young people without families who can't imagine how other people aren't saving money. Meanwhile, the cost of…

[deleted]
Post reply on HN