Cashed Out: Nearly 8 In 10 Americans Live Paycheck-To-Paycheck, Most Think They’ll Always Be In Debt
CHICAGO — The vast majority of Americans live paycheck-to-paycheck, and more than half don’t believe they’ll ever escape the wrath of debt, a new study finds.
Researchers at CareerBuilder commissioned Harris Poll to conduct a survey with more than 2,300 private sector-based employers and nearly 3,500 of their employees in the U.S.
They found that 78% of American employees struggle to make ends meet, which represents a three percent increase from a similar poll conducted last year. Broken down by gender, women were more likely (81%) to live paycheck-to-paycheck than men (75%).
Nearly a quarter of employees (23%) said they always lived from paycheck-to-paycheck, while 38% expressed doing so sometimes. When it comes to workers who earned at least $100,000, surprisingly, about one in 10 (9%) were living paycheck-to-paycheck, often due to high levels of personal debt.
That number jumped to 28% for people earning between $50,000 and $99,000, and ballooned to 51% for workers with an income under $50,000.
Speaking of debt, 71% of all employees said they have some liabilities or IOUs, while 56% believe they will always be saddled by their obligations.
To try and keep debt down, the survey found that 18% of employees have lowered the amount of money they were taking from their paychecks to put towards a 401k plan or other retirement fund.
That said, more than a quarter of employees (26%) do not set aside any savings on a monthly basis at all, and most employees working minimum wage positions must work multiple jobs, CareerBuilder found.
Budgeting seemed to be difficult for most people, with just 32% following a strict limit on spending. If forced to give up spending in a specific category, a bit more than half of those surveyed indicated they were most hesitant to relinquish their internet and cell phone services. About 2 in 10 said there’s no way they’d give up cable, while 1 in 10 refused to sacrifice alcohol.
“As an employer, your employees’ financial problems become your financial problems,” warns Rosemary Haefner, CareerBuilder’s chief human resources officer, of the poll’s findings in a press release. “If workers are constantly thinking about their financial struggles, their quality of work can decrease, and it can take a hit on their morale and productivity.”
Haefner recommends that employers help their employees manage their finances through either direct (e.g., retirement plan contributions) or indirect (e.g., holding seminars) means.
The poll, which was conducted in late May and early June, is believed to have a sampling error of about two percentage points.
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