Although unemployment is low, jobs are plentiful, and by most accounts the US economy is in good health, CareerBuilder’s latest survey of the financial state of the US workforce paints a more troubling picture, finding that 78 percent of Americans are living paycheck-to-paycheck at least some of the time—that’s up from 75 percent in last year’s survey. Some of the more detailed findings include:
Thirty-eight percent of respondents said they live paycheck-to-paycheck sometimes, but 17 percent said they usually do and 23 percent said they always do.
- Women are more likely to live paycheck-to-paycheck (81 percent) than men (75 percent).
- One quarter of workers have been unable to make ends meet every month in the last year, and 20 percent said they had missed payment on some of their bills.
- Seventy-one percent said they were in debt, up from 68 percent last year, and more than half of those in debt believe they will never get out of it.
- Thirty-eight percent do not participate in a 401(k) plan, IRA, or other retirement plan, and 26 percent said they had not set aside any savings each month in the last year.
- Most workers (81 percent) had worked a minimum-wage job at some point, and 71 percent of them said they had not been able to make ends meet during that time.
And while low-income workers are relatively more likely to live paycheck-to-paycheck, they are by no means the only ones doing so, CareerBuilder notes—meaning even employers of well-compensated professionals should not ignore the financial wellness concerns of their employees:
Shahien Nasiripour at Bloomberg passes along a new survey from T. Rowe Price which finds that most American parents “expect paying for college to upend their own retirement plans”:
Three-quarters of parents of children aged 8 to 14 were willing to postpone retirement to pay for their children’s college costs, the survey of 1,086 households found. About 68 percent of parents said they’d be willing to get a second job to foot the bill, while 69 percent said they favor putting aside money for their kids’ college before their own retirement—a definite no-no, financial advisers said, warning that such a move could wreak havoc on family finances. Some 42 percent of parents said they’re losing sleep worrying about future college costs, and 63 percent feel guilty that they won’t be able to pay more.
This raises an interesting question for employers. If companies were to shift 401(k) match dollars to 529 college savings plan match dollars, or give employees a choice between the two, I wonder if that would be a more attractive value proposition for employees facing this dilemma.
Meanwhile, Nasiripour notes, this finding comes as older Americans are already increasingly likely to work past the traditional retirement age—in many cases, because they have to for the sake of their financial security. Also, many Americans of retirement age have outstanding student debt of their own:
From 2003 to 2015, the average 65-year-old’s student debt rose more than five times as much as the average 30-year-old’s, after adjusting for inflation, according to the New York Fed. And in 2013, at least 105,000 Americans in default on federal student loans saw so much of their benefits garnished that their take-home pay was below federal poverty thresholds, according to the Government Accountability Office. More than half of federal student loans held by borrowers 75 or older were in default.