It used to be that having a job was a ticket out of poverty. But with the increase in the population of America’s ‘working poor,’ this statement seems to have lost its relevance. A look at the average American’s finances tells of a constant struggle just to make ends meet.
Still the situation is not all bad. There are various options to augment one’s financial situation, with companies like Utah Money Center offering signature loan options for quick cash with little fuss. Wages are also rising after a long period of stagnation, and 2016’s job security rates are better than they were before. But it doesn’t disprove the fact that millions in America are a paycheck away from living on the streets.
How Things Are Going
According to the Federal Reserve Bank’s report released in 2016, an economic survey done in 2015 shows that 31% of American adults (76 million individuals) are either struggling to get by or are barely able to do so. This number, while smaller from the 38% recorded in the previous year (2014), is proof that the seven-year recession still has people reeling financially. What’s worth noting is that 46% of these adults say that they do not even have the savings to cover a sudden $400 expense if it pops up.
Online personal finance watchdog Bankrate.com reveals largely the same results in their own survey. About 63% of 1,000 individuals they asked don’t have emergency savings to cover unexpected expenses. When asked how they will raise money for said instances, 23% said they’ll cut back on spending elsewhere, 15% said they’ll borrow from loved ones, and another 15% said they’ll use credit cards.
Why Is This Happening?
Wage stagnation might not be a problem now (relative to the past), but it’s been a problem for so long that recovery will take a long time. Hourly wages have largely fallen behind economic productivity in the last 35 years.
According to the Economic Policy Institute (EPI), dismal wage growth is due to intentional policy decisions – and not a result of economic forces – made in favor of the ruling class, or those who have the most wealth and political power. The EPI further states that these policy decisions are classified into areas such as the abandonment of full employment as an economic policy-making objective, the diminished strength of union solidarity, and globalization policies. But until the new administration focuses on changing this, there is little chance of substantial growth occurring in the next few years.