Close to Half of Americans Earning Six Figures are Living Paycheck to Paycheck
About 60% of Americans indicated that they’re living paycheck to paycheck, per a LendingClub report.
Moreover, people making six figures are feeling the economic pinch, as 45% revealed that they’re living paycheck to paycheck, according to a CNBC report. This is a notable increase from 2021, when 38% said that they lived paycheck to paycheck.
“More consumers living paycheck to paycheck indicates that many are continuing to lose their financial stability,” declared Anuj Nayar, a LendingClub financial health officer.
The consumer price index (CPI), which records the average change in consumer goods and services prices, increased by 8.3% in August, which was higher than initially projected. This increase was largely driven by increases in food, medical care costs, and shelter.
CNBC reported the following about real wage growth:
Although real average hourly earnings also rose a seasonally adjusted 0.2% for the month, they remained down 2.8% from a year ago, which means those paychecks don’t stretch as far as they used to.
Similarly, Bank of America discovered that 71% of workers indicated that their income isn’t keeping up with inflation.
“It is no secret that prices have been increasing for everyday Americans — not only in the goods and services they purchase but also in the interest rates they’re paying to fund their lives,” stated Nayar. He added that people are becoming more reliant on credit cards and are carrying a higher monthly balance, which makes them susceptible to economic shocks.
“This can have detrimental consequences for someone who pays the minimum amount on their credit cards every month.”
Per a Federal Reserve Bank of New York report released on August 30, 2022, credit card balances grew by $46 billion from 2021.
Overall the US is a nation of debt. From the public sector to the private sector, there’s just simply too much consumption and very little production in the American economy. A combination of a fiat-based monetary system and declining financial education has resulted in the creation of a society that simply engages in reckless spending and does very little in terms of actual production.
Such an economic environment is destined for an inevitable collapse. There needs to be a drastic overhaul of the central banking and regulatory systems coupled with a change in the financial culture if the US wants to remain a highly functioning economy.