4 in 10 Americans live paycheck to paycheck

[RAE]

Sometimes I wonder how our US economy can be declared to be "healthy" by so many economists, and even "firing on all cylinders" when I read articles like this.

"4 in 10 adults say they couldn't produce $400 in an emergency without sliding into debt"

‘I see no way out’: Living paycheck to paycheck is disturbingly common
_______________________________________________________________

It's disturbing to me that so many people live like this. I know that some (maybe most?) have made poor choices that have contributed to their situation, but it seems that there are many others who work hard but barely earn enough $$ to survive, much less save anything. I think the high cost of rent in many locations across the country is killing a lot of people........they pay such a high % of their income in rent that there is not a whole lot left over for anything else. I don't see how an economy like this is sustainable over the long-term.

 

[Elbata]

Things could get rough then with a long govt shutdown

 

[steelyman]

Things could get rough then with a long govt shutdown

Yes they could. I recall being furloughed during the ‘08-9 crisis. It felt like an unpaid vacation to me but wasn’t so easy for a lot of people.

 

[Walt34]

I saw that article earlier. Nothing new there, almost everyone knows someone living check-to-check. At my last job there was a payroll glitch once and instead of the normal Friday direct deposit, and it wouldn't happen until the following Monday. For most here that's a "meh". I was amazed at the whining, crying the blues and gnashing of teeth over having to go a WHOLE WEEKEND without a paycheck. At least two people admitted to taking out payday loans!

Are these people nuts? Are they not aware that things do not always go as planned or expected? Apparently not judging by their numbers. And income doesn't mean much - I can understand someone trying to make it on a minimum wage job having problems, but people making six figures and more still do that? Apparently so, my older sister worked with some of them 20+ years ago.

 

[MarieIG]

I saw that article earlier. Nothing new there, almost everyone knows someone living check-to-check. At my last job there was a payroll glitch once and instead of the normal Friday direct deposit, and it wouldn't happen until the following Monday. For most here that's a "meh". I was amazed at the whining, crying the blues and gnashing of teeth over having to go a WHOLE WEEKEND without a paycheck. At least two people admitted to taking out payday loans!

Are theses people nuts? Are they not aware that things do not always go as planned or expected? Apparently not judging by their numbers. And income doesn't mean much - I can understand someone trying to make it on a minimum wage job having problems, but people making six figures and more still do that? Apparently so, my older sister worked with some of them 20+ years ago.

Yep, had that happen at my last job too and WOW the bosses had to give some of the employees cash(who said they didn't have money to buy food) to tide them over the weekend. It was NOT pretty.

 

[Red Badger]

Many years ago, my mega-c*rp moved all salaried people from 2X to 1X per month pay schedule. The wailing and gnashing of teeth was omnipresent. One guy I knew scraped by that first two week gap only because he had some travel reimbursement due.

Others? Several had to resort to pawn shops, payday loans, title pawn, etc. It was pathetic.

 

[MRG]

It's truly sad. When I was in my 20s I worked at a sawmill in KC. The owner was a good guy, who understood many things. He paid a 5% bonus for every 40 week you worked during the year, paid right before Christmas. It was Christmas $$ for these guys. They could get a extra 2 weeks of pay for the year!

Well eventually he sold the mill to another guy, who wasn't the same kind of person.

I watched every year when the paychecks were handed out, but that year(1982) the new owner made an announcement. "The 5% isn't in the union contract and the economy is bad, not going to pay your bonuses. Next year I promise we will pay".

I watched grown men break down crying. The bonus was the family's Christmas money. There were no presents for kids that year. The next year he came out and did pay the 5% bonus, and shut the mill down for the next two weeks to pay for it. There was a 2 week wait for unemployment, so again no Christmas for these same guys. I got out very soon after that and within a couple years he had bankrupted the place.

It's not pretty to live that way but many people don't realize they might have options.

I spent a year going full time to night school and working full time there to get out and into a better career. The new owner's actions were my motivation when I was tired and didn't think I could push myself further.

 

[street]

I can see how many couldn't come up with 400 bucks. I know some young couples that got married and have good jobs but pay isn't very good. Some don't get a pension and it is easy to spend that money that should be saved. Rent is high, vehicles are expensive plus upkeep etc.. I can see that could be the case in many starting out.

 

[scrabbler1]

I remember back in 2001 when I first switched from working straight-salaried full-time to hourly part-time that August. I didn't get a paycheck that first pay period because the hourly workers get paid on a lag basis. I remember my boss, after breaking the news to me, was very apologetic for not warning me beforehand. I was like, "no big deal," and I knew they would make it up to me when I left the company someday, receiving an extra paycheck after my last day. She seemed somewhat surprised at my "meh" reaction.

 

[VanWinkle]

Yep, had that happen at my last job too and WOW the bosses had to give some of the employees cash(who said they didn't have money to buy food) to tide them over the weekend. It was NOT pretty.

Beer money

 

[OnIslandTime]

I've seen some of both, circumstances and choices...
A young relative once borrowed money from me, promising to pay it back quickly. I went by the adage that says never loan a friend or relative so much money that it would make you upset if you never got it back. I sent the money along with a tutorial about managing money. I wasn't paid back (still haven't been paid back and it has been over 10 years). The very next time I saw the young relative, a group (6 or 8) of us went to dinner at Applebee's and he attempted to pay for all of us. It was payday and he was flush with cash. Without embarrassing him in front of others, I managed to not let him pay and gently let him know that while it seemed like a good idea on Friday, it wouldn't look like such a good idea on Monday when the rent was due. Choices. He had a decent job, but had never had any money before and really had no idea how to deal with it.



I also worked with a woman (again, she had a decent job and seemed to be a stable person) who was absolutely shocked every 6 months when her car insurance came due. She frequently drove without insurance until she could get enough to pay it. She always had a new pair of shoes or a new coat or a new purse to show off every Monday, but couldn't pay her car insurance. Choices.


On the other hand, another person about my age, has not had the best circumstances, didn't finish high school due to an diagnosed learning issue, domestic violence issues forced a fast move to a different town, fatal illness of a child, chronic illness as a result of toxic (pollution) location, etc. This person works hard, makes the best choices within the parameters of the dealt hand, but still lives paycheck to paycheck. Circumstances.

 

[RAE]

Things could get rough then with a long govt shutdown

Yes, and I know the article focused somewhat on the shutdown and its effect on govt. employees, since that is in the news right now. But the paycheck-to-paycheck syndrome applies to people working for almost anyone, anywhere in America. I do agree that it's hard to believe someone can't go a week or even a few days without getting that paycheck, without having some kind of financial disaster. And there may not be anything new in the article, but I don't think ignoring the situation is going to make it go away, either. When 4 out of 10 adults in the country live like this, and presumably will have to work until they either get sick or drop dead (because they can't afford to retire), something is clearly not working with our economy.

 

[Red Badger]

Yes, and I know the article focused somewhat on the shutdown and its effect on govt. employees, since that is in the news right now. But the paycheck-to-paycheck syndrome applies to people working for almost anyone, anywhere in America. I do agree that it's hard to believe someone can't go a week or even a few days without getting that paycheck, without having some kind of financial disaster. And there may not be anything new in the article, but I don't think ignoring the situation is going to make it go away, either. When 4 out of 10 adults in the country live like this, and presumably will have to work until they either get sick or drop dead (because they can't afford to retire), something is clearly not working with our economy.

OTOH, our nation is saturated with advertising and marketing (that begins when still in diapers) that you need THIS to be cool, and THAT to show how you've made it, etc. The obsession with phones is emblematic of this. Even for some pretty smart people, keeping up with the Jones seems to be very natural. Lifestyle inflation is a huge risk. We succumbed to it for a brief period. I quickly learned that a modest middle class lifestyle was no place for a mortgage, two car payments, and some CC debt.

Junior Achievement has added financial acumen to their courses. I'll be contacting them in early 2019 (last vol session was 15 years back).

 

[splitwdw]

But hasn't it always been this way, the savers vs non-savers?
Is this the article where the one woman is an art administrator and has a part time job plus can't pay her student loan? She's got a Master degree, loves her job and can't pay her bills. I have a hard time making sense out of this.
Yes, I know that some people have lower paying jobs, medical issues, that prevent them from saving but most of the people don't spend their money wisely.

 

[travelover]

Another great opportunity to pat myself on the back for being so smart and frugal. If only they were as smart and frugal as me.

 

[Lewis Clark]

... At my last job there was a payroll glitch once and instead of the normal Friday direct deposit, and it wouldn't happen until the following Monday. For most here that's a "meh". I was amazed at the whining, crying the blues and gnashing of teeth over having to go a WHOLE WEEKEND without a paycheck. At least two people admitted to taking out payday loans! ...

I used to know of a bank that gave payday loans to any customer that had their paychecks directly deposited at this bank. For a fee, people could get their pay 3 days before payday, on every payday.

None of these folks were clever enough to realize that if they could make it from 3 days before payday to the next 3 days before payday, then they could also make it from payday to the next payday and avoid paying the loan fee.

These folks are not nuts. They are just clueless about money.

 

[Sanstar]

I think the problems are diverse and complex. In addition to the causes above, I’ve seen firsthand the results of raising kids to “follow your passion” when choosing a college degree. What a shock to learn there are very few high paying jobs for English and art majors and even law school grads. OTH, getting a degree and training in something you dislike and then grinding at it will not make for a satisfied employee who will be promotable. I think raising kids to have diverse interests and experiences and then choosing something marketable is a better way to go than the “follow your heart/passion” plan so many of my generation taught their kids, combined with the student debt crisis, high housing, etc make it tough for many.

 

[Gumby]

Another great opportunity to pat myself on the back for being so smart and frugal. If only they were as smart and frugal as me.

.

 

[rcpilot]

Some of these people are spending money they don't have, for things they don't need, to impress people they don't even like.

 

[Dtail]

Some of these people are spending money they don't have, for things they don't need, to impress people they don't even like.

Good first post.

 

[RAE]

But hasn't it always been this way, the savers vs non-savers?

Well, yes, there have always been savers and non-savers, but I don't think it's as cut and dried as that. Real average wages (inflation-adjusted) have barely budged over the last 40 years. To me, that is the crux of the problem. Sure, the hard-core non-savers will always probably live paycheck to paycheck, but there are also people who'd like to save, but simply can't because they're not earning enough to cover rent, food, transportation, etc., and also put any meaningful amount of savings aside. I look at some of the starting salaries around here, even for college grads in many fields, and I'm pretty sure I would not be able to live on that, and also save anywhere near what I was able to save, when I first entered the working world several decades ago. I think the country has a big problem with income inequality that is going to have to be addressed at some point, if we are going to have a sustainable and viable economy over the long-term.

 

[Philliefan33]

A couple of months ago the Treasurer of our HOA recommended that we change the payroll period of our hourly employees from every two weeks to twice per month, on the 15th and 30th. (The change would simplify the bookkeeping, avoiding an accrual for pay periods that spanned the end of the month.

He wasn’t asking to change anyone’s pay rate. Just go from getting a paycheck every other Friday to getting a paycheck on the 15th and the 30th. The uproar from other board members was remarkable. The man in charge of HR flat out said that his guys probably couldn’t make it with that change. One of the members said it wasn’t fair to go from 26 paychecks per year to 24. (Remember, no change in the hourly pay rate)

The motion was defeated. All I could think was “math is hard”[emoji849]

 

[Luck_Club]

Since about age 18 or so I've lived on straight commission. I've done in home, retail, telemarketing, to technical sales. The one consistent fact through all the jobs has been I earn my living when I sell something, and often have to wait some time period to get paid.

On one interview, it was my best gig financially, they asked me if I knew about the pay schedule. Some how it came out that they paid monthly, and they wanted to make sure I would be OK with that. I said no problem if it was quarterly it might take a bit of time to get used to but I could handle it. You should have seen the double take from the 30+ year older managers.

Pay check to pay check people in general have spending, drugs and work ethic problems. Being a landlord, I'm constantly hauling to the curb discarded items that were bought new on payment plans. The last one was a $1000 plus entertainment center that weighed a ton.

 

[Running_Man]

A couple of months ago the Treasurer of our HOA recommended that we change the payroll period of our hourly employees from every two weeks to twice per month, on the 15th and 30th. (The change would simplify the bookkeeping, avoiding an accrual for pay periods that spanned the end of the month.

He wasn’t asking to change anyone’s pay rate. Just go from getting a paycheck every other Friday to getting a paycheck on the 15th and the 30th. The uproar from other board members was remarkable. The man in charge of HR flat out said that his guys probably couldn’t make it with that change. One of the members said it wasn’t fair to go from 26 paychecks per year to 24. (Remember, no change in the hourly pay rate)

The motion was defeated. All I could think was “math is hard”[emoji849]

For who the people getting a paycheck or an accountant trying to figure out accrual accounting? You are talking about hourly employees, why in the world do you expect them to be able to handle something a paid professional apparently couldn’t handle?

 

[Sunset]

I saw that article earlier. Nothing new there, almost everyone knows someone living check-to-check. At my last job there was a payroll glitch once and instead of the normal Friday direct deposit, and it wouldn't happen until the following Monday. For most here that's a "meh". I was amazed at the whining, crying the blues and gnashing of teeth over having to go a WHOLE WEEKEND without a paycheck. At least two people admitted to taking out payday loans!

Are these people nuts? Are they not aware that things do not always go as planned or expected? Apparently not judging by their numbers. And income doesn't mean much - I can understand someone trying to make it on a minimum wage job having problems, but people making six figures and more still do that? Apparently so, my older sister worked with some of them 20+ years ago.

Same issue at one of my job sites.
In fact the boss (owner) called me into his office to apologize, and was amazed when I wasn't bothered at all. He then related how some folks were terribly upset as they had no money.