We' written a fair amount about economic uncertainty and the impact it's having on everything from marriage and birth rates to the rise of the on-demand economy and the rapidly growing number of people with side gigs.
One of the main drivers of economic uncertainty is living paycheck to paycheck. This, obviously, means an unexpected bill or job loss can quickly result in substantial financial damage.
Most think it's only those with low incomes who live paycheck to paycheck. But a recent survey by Sun Trust Bank shows that a sizable number of people earning more than $75,000 per year live paycheck to paycheck.
Their survey found:
- nearly one third of households earning $75,000 or more live paycheck to paycheck at least some of the time.
- nearly one quarter of household earning $100,000 or more live paycheck to paycheck at least some of the time.
This data is somewhat confirmed by a report from Deutsche Bank showing that almost half of all Americans don't save anything from their current income.
The chart below, from a Business Insider story on the study, nicely illustrates this. It also shows that this is not a new phenomenon. Even back in 1992 43% of Americans weren't saving anything.
But back in 1992 jobs were much more stable and easier to find if unemployed. Medical, education and housing costs were also much lower. This means living paycheck to paycheck is much riskier today than back then.
We think economic uncertainty is one of the key economic issues of our time - which is why we are spending so much time trying to understand its impacts.