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As Inflation Heats Up, 64% of Americans Are Now Living Paycheck To Paycheck (cnbc.com) 247

Posted by msmash from the closer-look dept.
As daily life gets more expensive, workers are having a harder time making ends meet. From a report: While wage growth is high by historical standards, it isn't keeping up with the increased cost of living, which is growing at the fastest annual pace in about four decades. "Wages are up 5.1% over the past year, which is trailing the pace of inflation," said Bankrate.com senior economic analyst Mark Hamrick. "Indeed, surging prices are stealing the show on the minds of consumers." When wages rise at a slower pace than inflation, those paychecks won't go as far at the grocery store and at the gas pump -- two areas of the budget that are getting particularly squeezed. At the start of 2022, 64% of the U.S. population was living paycheck to paycheck, up from 61% in December and just shy of the high of 65% in 2020, according to a LendingClub report.
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As Inflation Heats Up, 64% of Americans Are Now Living Paycheck To Paycheck More

As Inflation Heats Up, 64% of Americans Are Now Living Paycheck To Paycheck

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  • to see that everything costs more than it did even a few months ago. For example, I got an APC UPS for my office, it was $140 7 months ago, now it's $180 - but, some things are less, like a $500 emergency-purchased AP is now $400.

    Some of this is parts shortages maybe, but a lot of it is opportunism (say, Netflix raising the base rate to $15.50 where I am just because). Groceries have, in general, come down a little bit from pandemic highs but not far enough. I'm not sure who is getting 5% raises either,

    • Re: (Score:2)

      by laffer1 ( 701823 )

      Netflix price hikes are getting out of hand. I'm seriously considering cancelling at this point. It's the cost of TWO streaming services now for me.

      • That's how it should work. It's not "opportunism", at least in any pejorative sense, or "gouging". You charge people what they will pay - that's how you sell shit. Pretty simple concept. If people stop being willing to pay, prices go down.

        I may join you, now that you mention it, and shut down a few of my more expensive streaming platforms. There's such a glut of content it's not like I'll be staring at a blank screen if I cancel Netflix.

    • You may think you don't need fertiliser, but you probably do if you eat grains-based foods. Check out the graph:

      https://www.dtnpf.com/agricult... [dtnpf.com]

    • Netflix. I'm going to switch to every-other month for Netflix. It's the one service we have kept all the time (that and Prime), getting others for a month or two (Paramount for example), swapping them in and out.

      My Netflix went up to $20 just last Friday. Cancelling for next billing cycle. Then back in a month or whenever a show we want to watch is released.

      So I'll end up paying Netflix less over the course of the year, for 6-8 months rather than the full year. And it will seem fresher as well.

  • Mega corporations are buying up all the apartments, trailer parks and single-family houses. Little or no new supply is being built because it turns out affordable housing was mostly being built by the government. They didn't do it directly instead what the government did was they did all the expensive infrastructure spending to get the land ready so the builders could come in and throw up a cheap frame and some drywall on the wiring. The government also created loan programs that were specifically structure

    • Re: (Score:2)

      by waspleg ( 316038 )

      The problem is the people who enjoyed all those subsidies now want to make sure nobody else gets them

      That sums up a hell of a lot of problems in America - "I got mines", pull that ladder the fuck up.

      • it's people who couldn't even see the ladder they were climbing was given to them. That's a huge problem.

        The subsidies they enjoyed weren't direct payments. Nobody gave the a house or paid half their mortgage. Instead the money was dolled out by a complex series of government programs, so it became easy for them to say "I did all this by myself". And it becomes really, really hard for them to understand why everybody else doesn't just do the same.

        As you age it becomes really hard to understand that

        • Re: (Score:2)

          by waspleg ( 316038 )

          I'm in my early 40s, I don't even know which Gen I belong to because it changes depending on who is picking the dates.

    • Little or no new supply is being built

      Very expensive houses are extremely profitable right now and are being built all over. No moderately priced or inexpensive houses are being built. The wealthy move into bigger houses, their old house gets sold off to someone a little less wealthy. Until you get to the bottom and the house is condemned, gets demolished and the land sold to a developer for apartment buildings.

      • moderate houses will never be built. It's incredibly expensive to prep land. You've got to build roads, lay out gas and water, grade the land and get it ready for a foundation, etc, etc. The Gov't had been doing all of this for free from the 1940s - 1980s and then just stopped. There were also a ton of gov't loan programs that could only be used to buy affordable houses, forcing builders who wanted to sell to those consumers to make affordable homes.

        Without those gov't programs we can kiss affordable ho
    • There isn't a housing problem. There is a bad government and over regulation problem where housing crisis exists.

    • I thought the current inflation was mostly from supply chain interruptions due to the pandemic. Lower production means less stuff to go around, but demand remains the same (or rises), so naturally prices rise.
      We also spent a good amount of time paying people to sit around and do nothing, which of course made the supply chain problems worse.

      I agree there is also a housing problem. I just don't think that it is THE cause of the current inflation spike. I also agree that there is a cartel problem with too f

  • No problem for the government bureaucrats, politicians and the rich elites that own them.
    • most make pretty low wages in exchange for stable work and a decent pension (which their governors are trying to gut).

      You do have a point about the rich, who are sometimes politicians and sometimes not. It's pretty clear most of this inflation is just them taking advantage of the situation. We didn't enforce anti-trust law for the last 30 or 40 years, and they finally feel like they can tighten the screws.

      There is a little bit of hope. The reason this is happening is that the only requirement for a
      • Used to be the way for most in government. For the elites running things now it is lavish salaries, pensions and benefits. Adding in the graft, no show jobs and goodies for their families, extended families and their friend/donor networks. Not sure how much longer we will be able to afford our "public cough, cough self servants".

  • Wealthy people also live "paycheck to paycheck." Heck even Elon Musk likely lives "paycheck to paycheck." It is OK to keep your monthly "income" at the just-what-is-required level and build net worth via investment growth instead.

    • Heck even Elon Musk likely lives "paycheck to paycheck."

      I doubt that very much. He may be budgeting really well, but he has billions of dollars from selling his stock.

    • If all you cared about is building net worth, sure. But the wealthier you are, the more money you can keep liquid without ever thinking twice about it. In fact, it simplifies quite a few things. By percentage, it's much higher than the average person, but you would keep more than a "paycheck" allowance on hand.

    • Re: (Score:2)

      by jvkjvk ( 102057 )

      >Wealthy people also live "paycheck to paycheck." Heck even Elon Musk likely lives "paycheck to paycheck." It is OK to keep your monthly "income" at the just-what-is-required level and build net worth via investment growth instead.

      Nope. At least a couple to 12 months of expenses in cash is more like it. I have about 6 and I'm not wealthy. In billionaire's cases I doubt expenses come anywhere near the total cash they must have lying around.

      I found this: "The average billionaire only holds 1% of their n

    • Wealthy people also live "paycheck to paycheck." Heck even Elon Musk likely lives "paycheck to paycheck."

      That is totally bonkers reasoning. The definition of being wealthy is having more money than you need for physical survival. Elon Musk has enough money that he can buy pretty much anything he likes. His paycheck is what he says it is, which must be a nice position to be in.

    • Re: (Score:2)

      by gweihir ( 88907 )

      Wealthy people also live "paycheck to paycheck." Heck even Elon Musk likely lives "paycheck to paycheck." It is OK to keep your monthly "income" at the just-what-is-required level and build net worth via investment growth instead.

      You seem to have trouble understanding written English. "Living paycheck to paycheck" means you have no reserves. The very definition of being wealthy is that you have ample reserves.

  • “Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” --Milton Friedman

    • I appreciate that quote from a notable economist, but I think what we are talking about is that for some years, people have not been able to be as productive as normal. If the people are being paid their wages, but not producing stuff, then that puts up prices. I think we have to face the fact that dealing with a global shutdown of economic activity, due to precautions related to a pandemic, will have financial consequences, and that the ordinary folks around the world will pay for that. I don't actually th

  • I usually believe there are many types of nerds, and just because an article isn't about computers doesn't mean it isn't "news for nerds". However, I do consider myself an economics nerd, and this is low quality stuff. This is just the editors fanning the flames of discord.

    TFA is flame bait.

    • I don't agree. I think inflation is the natural consequence of reduced productivity. I am in the happy position of being productive while working from home. However, quite a lot of productive occupations can't operate on that basis. What that means is that wages are being paid, but the work is not getting done. This implies that the price of goods goes up, or the wages go down. Inflation.

      It is possible that quite a lot of work does not require the old commute to the office routine. This might have economic

  • Americans are not alone in this... (Score:5, Informative)

    by MindPrison ( 864299 ) on Thursday March 10, 2022 @05:08PM (#62345089) Journal

    ... I live in Sweden and I have a decent job as an IT-Support Analyst (basically a call center service for our own company to support our own co-workers).

    But we're all noticing it, it's so bad that we're talking a double-up for just about everything.

    1) about 2 years ago, It would cost me HALF as much to purchase my regular groceries as it did today. Our stores are blaming gas prices and one store owner said that he was horrified to find that transportation of his groceries has increased between 500-600%.

    2) Electricity prices have SOARED, quite literally. A tomato farmer here in Sweden said that his electricity bill this year was trippled, at 3x the cost of electricity I can't continue my farm he said. Some person also noted in a prominent country wide newspaper that he paid 50K SEK (roughly 5128 USD) just for December alone, and that was his family home.

    3) Gas prices have sky rocketed here too, we now pay around 23 SEK for Regular and 27 SEK for Diesel per liter, for you Americans that'd be roughly 9 USD for regular per gallon, and 10,5 USD per gallon).

    And our salaries are regulated by unions, usually -2 to +2% depending on individual negotiation per year, and doesn't come nowhere NEAR our current salaries. Housing prices have gone to the moon as well, a starter home for a young budding family is kind of a pipe dream now.

    • This chart [twitter.com] underscores your post. Americans have no idea how good they have it.
    • But isn't your economy booming? I could look up the statistics but it's different perspective from someone who lives there. Weapons sales are good these days, electronics are good these days, and the raw materials sectors seem at least stable, and those are all key exports for Sweden.

      Housing is definitely an issue there; too many interest only or low repayment loans propped up house prices and there's some bubble fears, although if I recall that was many years ago and I'm not sure how it is now.

    • I hadn't even thought of that, but yeah... all those indoor farming operations are screwed if the price of electricity doubles or triples. They're only marginally profitable growing vegetables indoors as it is, and the price of sunlight hasn't gone up. Even if transport goes up for traditional farming I imagine the constant electricity cost is a much higher percentage of expenses for something like a container farm using UV lights.

  • If single digit inflation drives you into living cheque-to-cheque, I think you were probably living that way before... you just got to participate in that shared illusion that a tiny buffer is vastly better than no buffer. It's only a tiny bit better.

    I think the story here isn't about the 3% being pushed into perceived fiscal peril... it's that 61% of folks live that way before the inflation really got moving.

    • Re: (Score:2)

      by jbengt ( 874751 )

      I think the story here isn't about the 3% being pushed into perceived fiscal peril... it's that 61% of folks live that way before the inflation really got moving.

      From TFA:

      Even among those earning six figures, 48% said they are now living paycheck to paycheck, up from 42% in December, the survey of more than 2,600 adults found.

      Yeah, looks like Petersko's right. If you're in financial distress while making six figures, it's probably your own fault.

      • I live in a household making six figures, and we've got 6 months of mortgage in a savings account just in case of emergency, and that much again in an emergency fund for other contingencies. If we both lose our jobs today we're good for 6 months without breaking a sweat, and might be able to squeeze out 9 months to a year.

        If only one person loses their job, we're good for a year at minimum.

        But unlike our coworkers, we don't go off on annual tropical vacations during the winter, we don't have multiple luxury

  • One Study, Not Particularly Robust (Score:3)

    by eepok ( 545733 ) on Thursday March 10, 2022 @05:18PM (#62345153) Homepage

    This is market research being thinly veiled as social justice.

    Here's the study summary: https://ir.lendingclub.com/new... [lendingclub.com]

    You can download the full report here: https://www.pymnts.com/wp-cont... [pymnts.com]

    Methodology: The Paycheck-To-Paycheck Report is based on a census-balanced survey of 2,633 complete responses from U.S. consumers conducted from Jan. 11 to Jan. 18, 2022, as well as an analysis of other economic data. So, 0.00075% of the national population was surveyed.

    Page 4/5 shows that they're basically covering the pandemic era (Mar 17, 2020 - Jan 11, 2022) and for the most part, "paycheck to paycheck status overtime" hasn't really changed. In fact, if I were to copy/paste the data, I'm almost certain a linear regression would show a slight downward trend (fewer living p-to-p).

    Page 7 shows that the less annual income you have, the more likely you are to live p-to-p. Literally zero surprise there.

    Page 10 is hilarious. It shows that in Jan 2022, only 36.5% of those making >$100k/year are able to pay their bills and (page 15) 14.4% of that same population would resort to a payday loan, deposit advance, or overdrafting their checking account if they were faced with an emergency expense.

    Page 15 shows what I think is the reason this particular organization (THE LENDING CLUB) did the study. It shows that those who DO NOT live paycheck to paycheck, in all income levels, would pay for an emergency expense using a credit card 34%-45% of the time with 7.3% - 8.5% paying it off over time (interest $$$).

    • Good to know there's someone else out there that clicks through to the study...though the pymnts.com one has fake email-subscribe-wall. The part I do not understand is this "... living paycheck to paycheck and able to pay their bills increased to 42% in January 2022, rising from 39% in December 2021, while 22% of paycheck-to-paycheck consumers still struggled to pay their monthly bills. I would have thought that struggling to pay your bills was living paycheck to paycheck so if you are not having prob

  • Living from paycheque to paycheque is the status quo, is it not?

    I mean, it's not ideal, obviously... but I was under the impression that was entirely normal since the mid 1970's or so.

    • I just INCREASED how many Americans live on the edge. It's even higher when you talk about a major medical emergency.

      • Correction: "IT just INCREASED how many Americans live on the edge. It's even higher when you talk about a major medical emergency."

  • This period of inflation has only just started - the US is fucked if people are struggling already. It's almost like a system where all the wealth trickles upwards is not fit for purpose...

  • You created your own country.

    Suck it up princesses.

  • There is no inflation, that's just misinformation from Fox News.
    And if there is inflation it's temporary.
    And if it's not temporary it's small and you can afford it, so quit your bitching, you fat 'murican climate terrorist.
    And if it's not small or temporary it's Trump/Putin/Capitalism/Republican's fault and the solution is more spending.

  • The first rule of Fiat Club: we do not talk about Fiat Club.
    https://sinfest.xyz/view.php?date=2022-03-10

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