09/17/09 Baltimore, Maryland
Here’s another trend of the “new normal”: the working poor.
30% of Americans making $100,000 or more each year are living paycheck to paycheck, reports a CareerBuilder study this week. That’s up from 21% last year — a number that still seems awfully high.
61% of all Americans say they are in a similar bind… making just enough to finance their lifestyle every month. Just a year ago, 49% were living paycheck to paycheck.
The No. 1 way to make ends meet on a tough month? Cut savings. Check out these quick stats:
- 21% of correspondents have reduced or eliminated 401(k) contributions in the last six months
- 36% don’t put any money toward retirement
- 33% don’t save at all
- 30% that do put some away save less than $100 a month.
Puts an interesting twist on the much belabored rising savings rate, doesn’t it? The personal savings rate as reported by the government has nearly doubled from this time last year — from roughly 2.5% to 5%. But to what end?
Ian Mathias
Ian Mathias is the managing editor of Agora Financial’s Income Franchise, where he writes and researches about retirement, dividend and fixed income investing. Much of his work is featured in The Daily Reckoning and Lifetime Income Report – Agora Financial’s flagship income investing advisory.
Previously, Ian managed The 5 Min. Forecast, a fun, fast-paced daily look into the future of global markets and macroeconomics. He’s also worked in public relations, where media outlets like Forbes, AP, Yahoo! and MSN Money have syndicated his writing. If he’s not at work, you’ll probably find Ian on a bicycle, racing up and down the “mountains” of Baltimore County. Ian has a BA from Loyola University in Maryland.
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It would be interesting to know how the savings rate is calculated. It almost appears that the number is derived from reduced consumer spending. If the consumer is spending less, they MUST be saving more.
I think I read somewhere that payments towards debt & loans were counted as savings.
Another silly government stat that can be twisted and manipulatd. Folks are cutting back from NEGATIVE income situations and finally TRYING to live within their means.
This makes me sad. How is it though that people making $100,000 a year are having to live paycheck to paycheck? Perhaps we are all a little too greedy and should stop living beyond our means.
The return of the working poor? I didn’t know we went anywhere. How is someone making $100,000 a year working poor? Most Americans have to live on less than half of that. Many live on less than a quarter of that. You want working poor? You want pay check to pay check? Try living on $250 a week.