According to a recent CreditKarma report, two out of three American workers are now living paycheck to paycheck. These workers said that their current pay isn’t enough to cover the rising cost of inflation.
2 out of 3 Americans Living Paycheck to Paycheck
In a separate survey from LendingClub, around 64% of the US population is living paycheck to paycheck as of March 2022.
The number is 3% higher compared to those surveyed back in December 2021. It's also one percent shy of the record 65% recorded during the pandemic in 2020.
Anuj Nayar, LendingClub’s financial health officer, confirms that many Americans are struggling to make ends meet.
“With inflation up 7.5 percent in the last 12 months, consumers of all income brackets are struggling to find a way to make ends meet.
Every day we see Americans relying on credit cards as a crutch,” he added. Nayar added that this is a horrible way to borrow money due to high-interest rates. That is unless you pay the entire amount at the end of the month.
Even Higher Wage Americans Are Living Paycheck To Paycheck
The survey on Americans’ financial status is part of LendingClub’s “Reality Check: Paycheck To Paycheck” research series. The company made the report in partnership with PYMNTS.com.
Surprisingly, the report said that even those with higher salaries find themselves running short. Last May 2021, only 53% of Americans earning between $50k to $100k reported living paycheck to paycheck. By December, that number swelled to 67%.
Even Americans earning six figures are feeling the crunch these days. Now, 48% of Americans earning over $100,000 a year say they’re also living paycheck to paycheck.
“With inflation hitting even the wealthiest Americans’ pocketbooks, the ranks of paycheck-to-paycheck Americans continues to swell,” Nayar noted.
Great Resignation Is Now The Great Reshuffle
As a result, many American workers have either jumped to new jobs or are considering a move at present. Increasingly, the need to switch careers becomes less voluntary as inflation continues to rise.
Historically, wage growth in the US is relatively high. However, recent wage raises can’t keep up with surging inflation. Right now, inflation is rising at the fastest annual pace in at least 40 years.
February inflation recorded a 7.9% pace. However, wage growth at the same time registered only a 5.8% increase.
Feeling the brunt of high prices is low- to moderate- income workers, according to report author Juliana Horowitz. This helps explain why many from their ranks kept looking for new jobs that offer higher pay.
As a result, those who found a new job are likely to say they earn better, have increased opportunities, and better work-life balance.
Watch the Ring of Fire video reporting that 64% Of Americans Living Paycheck To Paycheck As Inflation Squeezes the Country:
Do you consider yourself and your household living paycheck to paycheck right now? Also, do you think things will get better soon?
Tell us what you think about the current inflation plaguing our economy and paychecks. Share your thoughts in the comments section below.
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