Living paycheck to paycheck is a phrase that describes people who have no cushion in their resources, who simply would be unable to meet their financial obligations if they would be unemployed.
What comes in this week in the paycheck goes out this week to pay bills.
Online resources explain those individuals used to be called the “working poor,” however, the phenomenon actually now cuts across many income levels and even affects those earning six digits.
The pandemic aggravated the situation, as Americans who had savings and such sometimes had to use them to pay living expenses at the time.
Now CNBC reports that nearly two-thirds of Americans now are in that boat.
“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,” the report said.
Bankrate.com senior economic analyst Mark Hamrick said in the report that while wages are up 5.1% over the past year, that’s not as much as inflation – which has been measured at 7.5%.
“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,” the report said.
At 2022 started, 64% of the U.S. population was living “paycheck to paycheck,” up three points from just the month before.
“We are all seeing the cost of everything shooting up,” Anuj Nayar, LendingClub’s financial health officer said in the report.
But gas, now well into the $4 per gallon plus range under Joe Biden’s economy, and household items are especially problematic, he said.
Eating, for instance, is not optional. Nor is commuting, he pointed out.
Among those earning $100,000 or more, nearly half, 48%, said they are living paycheck to paycheck.
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