Paycheck to Paycheck Levels Reach Post-Recession Low
CHICAGO -- Living from paycheck to paycheck isn’t new, but the number of American workers who say they rely on their next payday to make ends meet has dropped slightly from 2011.
Forty percent of workers surveyed this year by CareerBuilder are dependent on their next check, down from 42% in the 2011 survey.
This year’s figure marks a post-Great Recession low, continuing a downward trend from a peak of 46% in 2008.
The nationwide survey found that 53% of those living paycheck to paycheck were not doing so until 2008.In addition, 37% say they sometimes live paycheck to paycheck, while 23% say they never do. And 20% found themselves unable to make ends meet at least once in the last year, the surey found.
Workers making $100,000 and more feel more confident than they did last year: 12% of workers who earn $100,000 or more always or usually live paycheck to paycheck -- down from 14% in 2011 and 17% in 2010.
"Making ends meet remains a challenge for millions of households, but the situation has improved for workers who've grown more confident with their job security or who've taken steps to pay down debt and save more," said Rosemary Haefner, vice president of human resources at CareerBuilder. “Seventy-two percent report they are more financially responsible since the end of the recession, and as the labor market continues to improve, we expect more workers will again be able to spend in ways that will drive the economy forward."
A majority, 59%, said they spent less on leisure activities since the start of the recession, but for many, they deemed the following expenses too important to give up, regardless of their financial circumstances:
- Internet connection, 57%.
- Driving, 44%.
- Pet, 39%.
- Cable TV, 29%.
- Mobile phone, 24%.
Some 27% of workers save nothing each month -- the same as last year -- and 30% save more than $250 and 10% save more than $1,000. Fully 67% contribute to a 401(k), IRA or comparable retirement plan, similar to 2011 (66%).
In addition, 20% said they reduced their contribution to these plans in the last year, which is also relatively unchanged from last year’s 21%.
Consistent with earlier studies, women (44%) are more likely than men (36%) to live paycheck to paycheck. A full quarter of female workers missed a monthly payment at least once in the past year, compared to 17% of men.
Compared to other age groups, workers near retirement (defined as those 55 and older) are least likely to report living paycheck to paycheck (34%). This compares with 40% of those 18 to 34, 42% of those 35 to 44 and 43% of those 45 to 54.
Workers 55 and older are more likely than those workers 25 to 54 to report saving more than $1,000 a month (13%) and most likely to participate in a 401(k), IRA or comparable plan (73%).
Published by The Business Journal, Youngstown, Ohio.