Majority of American Households Living Paycheck to Paycheck

President Obama and everyone in the White House has a big smile on their face. They say the economy is improving. Unfortunately, reality has a way of pouring cold water on such enthusiasm.

Deutche Bank released a graphic that says the economy is not improving at all.

One business insider declares that it “could be the scariest chart in the world.” He’s speaking about a graphic showing that nearly half of American households don’t save any of their money. They have nothing to fall back on if they miss a paycheck.

Some of the data for that scary chart came from the Federal Reserve System’s Survey of Consumer Finance. It shows 47 percent of U.S. households were living paycheck to paycheck when the data was compiled. Thankfully, that 47 percent is actually down slightly from 2010, but it is significantly higher than in 2001, when it was below 41 percent. So it wasn’t a great result back then either. According to the statistics, during the past six years, while Barack Obama has been in the White House, wages have been stagnant or dropping.

Many Democrats will place the blame for that squarely on Republicans, giving Obama and the Democrats a free pass.

Not saving money is a very bad thing, in the short, madium or long term. One business observer said, “People who don’t save won’t have any buffer should the economy turn and they lose their jobs. Longer term, people who don’t save won’t have the capacity to retire. It’s not good.”

Actually, it is worse than “not good.”

That graph isn’t the only bad news. Last year, the Brookings Institute produced a report that showed two-thirds of those households living paycheck to paycheck are actually middle class.

You can guarantee there will be no mention of this information at the presidential press conferences.

CNN checked out the Brookings Institution’s findings. Those middle class households have a median income of $41,000 a year, according to the report. They have no liquid assets and are living from day to day, dependent solely on the paycheck from their jobs. They have no savings, no retirement accounts and they are close to disaster if something goes wrong.

And those people are middle class! Imagine what it is like for the lower income families living hand-to-mouth with a typical annual income of $21,000.

To avoid being in that terrible position, a family needs $10,000 more salary, i.e. making at least $51,000, plus, they need average assets of $116,000.

If you speak to a financial advisor, and ask them what you need to do to to withstand an emergency, they will suggest you need three to six months of expenses. CNN reported that “few actually do.”

That so many people are living hand-to-mouth, paycheck-to-paycheck in this country is a very sad story.

President Obama, the Democrats and the Republicans have let this country down. President Bush may have helped start it, but if the only response to everything is “It’s Bush’s fault,” then those that followed have had nothing to offer, other than improving their golf game.

Dwight L. Schwab Jr.
Dwight L. Schwab Jr. is a moderate conservative who looks at all sides of a story, then speaks his mind. He has written more than 3500 national political and foreign affairs columns. His BS in journalism from the University of Oregon, with minors in political science and American history stands him in good stead for his writing.


Dwight has 30-years in the publishing industry, including ABC/Cap Cities and International Thomson. His first book, "Redistribution of Common Sense - Selective Commentaries on the Obama Administration 2009-2014," was published in July, 2014. "The Game Changer - America's Most Stunning Presidential Election in History," was published in April 2017.


Dwight is a native of Portland, Oregon, and now a resident of the San Francisco Bay Area.