Fact Check: Is there a consensus that a majority of Americans are living paycheck to paycheck?
No
While one survey by LendingClub found that more than 60% of Americans reported living paycheck to paycheck, others recorded lower numbers. LendingClub asked 3,252 U.S. consumers if they needed their next paycheck to cover their monthly spending; 62% answered yes.
In contrast, the Federal Reserve found that 54% of Americans have emergency savings to cover three months of expenses. Bankrate found that while 59% of Americans are uncomfortable with their level of emergency savings, 34% are living paycheck to paycheck.
The lack of consensus may be explained by the ambiguity of the term “paycheck to paycheck.” For example, almost half of Americans surveyed by Bank of America said they were living paycheck to paycheck but only a quarter spent 95% of their income on necessities.
Nevertheless, financial hardship remains a widespread issue in America. Jeffrey Fuhrer estimates 43% of all U.S. families fall short of meeting basic needs.
This fact brief is responsive to conversations such as this one.
Sources:
LendingClub | Nearly 60% of Credit Cardholders in the U.S. Live Paycheck to Paycheck
Federal Reserve | Survey of Household Economics and Decisionmaking
Bankrate | Living paycheck to paycheck statistics
Bank of America | Paycheck to paycheck: what, who, where, why?
Brookings | How many are in need in the US? The poverty rate is the tip of the iceberg.
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