• 21 hours Corn Industry Reeling After Shocking Ethanol Decision
  • 2 days Gold Miners Eye Further Upside
  • 2 days Alibaba Exec Sets Record With $3.5 Billion Brooklyn Nets Purchase
  • 3 days Smart Contracts: The Tech Reshaping Entire Industries
  • 3 days Protests Threaten $5 Billion Peruvian Copper Mine
  • 4 days Why Wealthy Kids Are Getting Into College For Free
  • 4 days Is Is Too Late To Get Into The New Gold Boom?
  • 4 days Solar Tech Breakthroughs Spark Surge In Adoption
  • 5 days These Rare Stones Are About To Become Priceless
  • 5 days Why Silver Miners Aren’t Living Up To Expectations
  • 5 days WeWork Reveals Huge Losses Ahead Of IPO
  • 6 days American Education Continues To Fall Behind China
  • 6 days EV Sector Needs 250% More Of This Metal By 2030 Just For Charging Stations
  • 6 days Why Gold Prices Are About To Skyrocket Even Higher
  • 7 days Scientists Create The World’s First 2D Gold
  • 7 days The Key To Commercial Fusion
  • 7 days Inflation Is Creeping Up In Consumer Goods
  • 8 days U.S. Healthcare Industry Could Be Decimated By The Trade War
  • 8 days Washington's $400 Billion Emissions Plan
  • 9 days The Trade War Shows No Sign Of Easing
Why Wealthy Kids Are Getting Into College For Free

Why Wealthy Kids Are Getting Into College For Free

Investigative journalism outlet ProPublica recently…

Inflation Is Creeping Up In Consumer Goods

Inflation Is Creeping Up In Consumer Goods

Companies like Coca-Cola, Pepsi and…

Scientists Create The World’s First 2D Gold

Scientists Create The World’s First 2D Gold

Researchers have discovered a new…

Charles Benavidez

Charles Benavidez

Staff Writer, Safehaven.com

Charles Benavidez is a writer and editor for Safehaven.com. Charles is located in New York City and has over 5 years of experiencing covering financial…

Contact Author

  1. Home
  2. News
  3. Breaking News

40% Of Americans Are One Missed Paycheck Away From Poverty

Broke

As was witnessed during the recent partial government shutdown, missing a single paycheck can put a household into financial uncertainty. But it’s not just furloughed government employees who are in trouble …

Despite the lowest unemployment rate in decades and a stable economy, new data shows that 4 of 10 Americans are one missed paycheck away from poverty.

The report by think-tank Prosperity Now found that 40 percent of American households are “liquid asset poor”—in other words, that they don’t have enough money saved away to make ends meet at the poverty level should their income be suddenly interrupted. That figure jumps to 57 percent for non-white households.

Kasey Dietrich, director of applied research at Prosperity Now told press that we’re not just talking about low-income people here. “This is a problem of middle-class people and even people with higher income without enough savings. If they hit a shock, they are in the same boat,” Dietrich said.

“Income poverty rates haven’t fallen below where they were in 2008 and 2007. The cost of living is greatly outpacing growth in wages, and the numbers show that too many of the jobs people do have are not setting them up to afford their healthcare, put money away, or securely meet their housing costs.”

The new findings represent an increase from last year when researchers noted that 36.8 percent of Americans were ‘liquid asset poor’.

This time around, 13 percent of U.S. households have fallen behind on bills, nearly one-third don’t have a savings account, and close to 40 percent have no money put aside for an emergency.

Of the Americans who have savings accounts, the median savings account balance is $4,830. 

Related: Hackers Tap Into The U.S. Electric Grid

Then again, the prices have risen significantly in the past year, especially for gas and rent. Adjusted for inflation, workers’ wages grew 0.6 percent over the year. Annual inflation was 2.3 percent in September, according to the Labor Department.

At the same time, wage growth was mostly characterized by economists as moderate. With unemployment near historic lows, wage growth is pretty much the only missing piece of this puzzle. According to the Bureau of Labor Statistics, hourly wages increase by only 0.2 percent to 2.7 percent.

Lower unemployment generally leads to higher wages, but the effect has been slower in manifesting. But again, one of the reasons for that is that working-class is not keen on asking for wages increase, something branded by millennials.

Recent research shows that US workers are willing to give up substantial earnings in exchange for non-wage perks and benefits. Apparently, self-scheduling, paid vacation and moderate physical activity is the most wanted non-wage job characteristics.

“40 percent of respondents preferred a lower-wage job with a flexible work schedule and telecommuting over a higher-wage job without those attributes," the report from the RAND Corporation's “American Working Conditions Survey” shows.

The Prosperity Now report was produced ahead of a report on U.S. fourth-quarter gross domestic product (GDP), which has now been delayed due to the government shutdown.

However, The Congressional Budget Office estimates the 35-day shutdown subtracted about $11 billion in growth from the economy. That downgrade that could potentially keep the U.S. from achieving 3 percent GDP for 2018 for the first time in 13 years.

By Charles Benavidez for Safehaven.com 

More Top Reads From Safehaven.com

Back to homepage

Leave a comment

Leave a comment