1 shrimptillion percent of people work paycheck to paycheck

• Nope, these are based mostly on surveys by private companies used for marketing purposes, typically credit cards

• “Paycheck to paycheck” is not a well defined term, and most rely simply on the participants’ interpreted meaning.

  • This is why you often see a large percentage of those living “paycheck to paycheck” are making a middle-class income

  • For instance, the commonly cited Lending Club surveys usually find over 30% of those making over 200k a year are living paycheck to paycheck

    

  • The Bank of America has lower but similar numbers for households with over $150k in income

    

• Federal Reserve data provides a better view of Americans’ finances

  • 55% of adults have 3 months of savings
  • Median American has 8k in transaction accounts (table 3, page 21)
  • Median net worth $192k (table 2, page 18)
    • Medians are not distorted by billionaires like averages would be

https://thedispatch.com/article/affordability-crisis-healthcare-housing-childcare/

50% of Americans can’t afford a $400 expense

• Not really, 63% would cover a $400 emergency expense completely using cash or its equivalent (Figure 21, page 36)

  • This number has been trending upwards, although it has not recovered since covid

• Of the 37% who wouldn’t cover it with cash, a plurality (16%) would put it on a credit card, which is not that bad imo (table 16, page 37)

  

  • Only 13% would not be able to pay for it, but taking a payday loan or selling something is obviously not preferable either

• 48% of Americans could cover a $2,000 or more emergency expense with only savings (table 17, page 37)

Half of near-retirees have no retirement savings

• Nope, this figure is about “retirement accounts”. It doesn’t include pensions and savings outside non-tax advantaged accounts.

• Federal Reserve data reports 86% of Americans aged 55-64+ had retirement savings.

• Many of those with no savings earn below $25k a year. This is self reported pre-tax and transfer income, so many of those with no personal savings receive government transfers to partially fill the gap

  

• Basically, everyone gets Social Security!

• The old days of employer-provided pensions weren’t exactly great either. According to the 1971 the Senate Labor Committee:

  When the median for normal retirement of $99 a month [$832 in $2025] is added to the median Social Security retirement benefit of $129 a month, the total, $228 a month, is less than the $241 minimum monthly income required to sustain a retired urban couple, as reported by the Bureau of Labor Statistics in January, 1970.

Wages haven’t kept up with productivity

• No, no, no, no, no, no, no, and no
• The original version of the graph from EPI used 2 different deflators; EPI has since corrected this
• The original version also looked only at wages and didn’t include non-wage benefits like healthcare and retirement contributions. EPI has since corrected this
• The EPI chart uses CPI, which is typically the highest measure of inflation, has undergone numerous changes during this period because it was overestimating inflation, and still overestimates shelter prices and auto insurance prices
  • CPI measures a basket of consumer goods (that’s its job!), but productivity includes all production. There are many goods and services workers produce but don’t consume, like investment goods. GDP deflator accounts for this better
  • Productivity is based on gross output, which doesn’t account for depreciation of machines used for production
  • CPI also only assumes substitution within categories
  • However, inflation may be heterogenous across income groups