Here's How Many Americans Are Living Paycheck To Paycheck (Hint: It's A Lot)

Is your family forced to count down the days each month until the next paycheck arrives?  If so, you"re part of a staggering, and growing, majority of households in America, the richest country on the planet, that is forced to do the same.  

According to a new poll conducted by Harris Poll on behalf of CareerBuilder, over three-quarters of American households are forced to live paycheck to paycheck to make ends meet. 

More than three-quarters of workers (78 percent) are living paycheck-to-paycheck to make ends meet — up from 75 percent last year and a trait more common in women than men — 81 vs. 75 percent, according to new CareerBuilder research. Thirty-eight percent of employees said they sometimes live paycheck-to-paycheck, 17 percent said they usually do and 23 percent said they always do.

Having a higher salary doesn"t necessarily mean money woes are behind you, with nearly one in 10 workers making $100,000 or more (9 percent) saying they usually or always live paycheck-to-paycheck and 59 percent in that income bracket in debt. Twenty-eight percent of workers making $50,000-$99,999 usually or always live paycheck to paycheck, 70 percent are in debt; and 51 percent of those making less than $50,000 usually or always live paycheck to paycheck to make ends meet, 73 percent are in debt.

Not surprisingly, the problem is even worse for minimum wage workers, 54% of whom say they have to work more than 1 job to cover their monthly expenditures. 

The majority of workers (81 percent) have worked a minimum wage job, and 71 percent of them were not able to make ends meet financially during that time — more than half (54 percent) had to work more than one job.

To alleviate some financial burden, 83 percent of employers that are hiring minimum wage workers this year (45 percent) will be raising the minimum wage at their organization.

Meanwhile, 57% of households say they can"t afford to save even $100 a month.

Less than a third of workers (32 percent) stick to a clearly defined budget and a slight majority (56 percent) save $100 or less a month:

• None: 26 percent


• Less than $50: 15 percent


• $51 to $100: 16 percent


• $101 to $250: 14 percent


• $251 to $500: 11 percent


• $501 to $750: 5 percent


• $751 to $1,000: 4 percent


• More than $1,000: 10 percent

The scariest part of the poll, as CBS points out, is that the number of people living paycheck to paycheck is actually growing despite the fact that the Fed and our politicians continue to brag about near "full employment."

The survey highlights a troubling trend in household finances: More than eight years since the end of the recession, the share of Americans who are living on the financial edge is growing, said Mike Erwin, a spokesman for CareerBuilder. While some may want to blame Americans" spendthrift ways, Erwin pointed to two trends that continue to put financial stress on households: stagnant wages and the rising cost of everything from education to many consumer goods.

"Living paycheck to paycheck is the new way of life for U.S. workers," he said. "It"s not just one salary range. It"s pretty much across the board, and it"s trending in the wrong direction."

A year ago, about 75 percent of U.S. workers said they were living from payday to payday, a number that has grown to 78 percent this year. The study, conducted by Harris Poll, surveyed nearly 2,400 hiring and human resource managers and 3,500 adult employees who worked full-time in May and June.

Meanwhile, employers seems to see straight through the "full employment" charade because wage growth continues to be completely nonexistent...an outcome that would seem inconceivable in an under-supplied market.

Weak wage growth is partly to blame for the financial stress felt by many Americans. Median household income is still stuck in low gear, with the U.S. Census reporting only one year of income gains since 2007, the year the recession officially started.

The end result: American households are still earning 2.4 percent below what they brought home at their income peaks in 1999. At the same time, expenses for food, fuel, education, housing and other costs have risen.

"Jobs have come back, but we haven"t seen salaries rebound," Erwin said. "Right now we are in a time when the cost of living is way outpacing the amount of money that people are getting through raises."

Of course, the real question is precisely how many of these households live in a McMansion that"s 2x larger than what they need for their family and drive around in brand new BMWs that get replaced with new leases every 3 years?

"It's Not Just Wages" - Workers Without College Degrees Face "More Instability"

If you believe San Francisco Fed President John Williams, the US labor market has almost never been ore robust than it is today. Of course, middle- and working-class Americans who are struggling with levels of financial uncertainty that would be unfamiliar to their parents’ generation don’t necessarily care that the official unemployment rate is 4.4%. They’re too busy struggling to make ends meet when real wages have been stagnant for decades and economic growth is expected to slouch along at 2% for the foreseeable future.

While researching their new book “The Financial Diaries,” Jonathan Morduch and Rachel Schneider followed more than 200 working and middle-class families around for a year and tracked “every dollar of their financial lives." They found that millions of workers without college degrees, especially those who are paid hourly, or who are paid by commission, experience what they call call income variability - when their pay fluctuates by 25% above or below their average. One of Murdoch and Schneider"s subjects, a truck mechanic named Jeremy, even quit his job to take a lower paying job with a steady salary.

They discussed their findings during an episode of Bloomberg"s "Benchmark" podcast.

“When we first met him, his weekly paychecks were very variable. And he was bearing all that risk. At the end of the year, he quit his job for another job with lower pay that was more steady. ”

“On average, we’re seeing households spend about five months of the year where their income was 25% above their average or 25% below their average. So income insecurity wasn’t about ‘am I going to lose my job,’ it’s about ‘how am I going to navigate the ups and downs in my given job.’”

The pair also found that existing financial services don"t adequately serve the needs of workers struggling with income variability. Schneider discussed how one subject whom she called Jane intentionally placed obstacles to withdrawing money from her savings account.

“Often the strategies they were using to make that money stretch show gaps in how financial services are or are not serving them. For example, we tell the story in the book of a woman called Janice who has a savings account and a checking account but she cut up her checkbook for her checking account and she cut up her ATM card. She has those accounts in different institutions and the savings account is an hour’s drive from her home.”

“A bank might say she’s not using those products right, she’s paying check cashers and fees on money orders to pay her bills she’s using it wrong. But I look at it the other way she actually wants some wall between herself and her spending or savings. She cut up the check book because she doesn’t want temptation to take out payday loans which she’s had trouble with in the past.”

Regardless of race, workers without degrees are stuggling "in a lot of ways."

“One of the things that we see is that today workers without college degrees are struggling in a lot of ways. We see that in the labor market in terms of wages and what our data and related data are showing is it’s not just average wages they also are facing much more instability than other workers."

"The economic backlash is being felt by lower class workers, regardless of race, because the system isn’t working for the poor.Black workers have a hard time and white worker as well are living very precarious lives. Even though they have jobs there’s economic anxiety in America even for people with jobs. And that’s the big puzzle in America. That people are trying to sort out what the big answer is but you spend time and follow people month to month you see exactly why there’s so much anxiety in a sense because the system really isn’t working for them.”