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Majority of middle-class Americans say they struggle financially

Alex Tanzi, Bloomberg News on

Published in Home and Consumer News

Almost two-thirds of Americans considered middle class said they are facing economic hardship and don’t anticipate a change for the rest of their lives, according to a poll commissioned by the National True Cost of Living Coalition.

By many traditional measures, the U.S. economy is strong, with robust labor, housing and stock markets, as well as solid gross domestic product growth. But the data don’t capture the financial insecurity of millions of households who worry about their future and are unable to save, according to the group, created this year to come up with cost-of-living tools that help gauge economic well-being.

In the large poll of 2,500 adults, 65% of people who earn more than 200% of the federal poverty level — that’s at least $60,000 for a family of four, often considered middle class — said they are struggling financially.

A sizable share of higher-income Americans also feel financially insecure. The survey shows that a quarter of people making over five times the federal poverty level — an annual income of more than $150,000 for a family of four — worry about paying their bills.

Overall, regardless of the income level, almost 6 in 10 respondents feel that they are currently financially struggling.

“The economy is booming, and yet many Americans are still gasping for air financially,” said Jennifer Jones Austin, chief executive officer of the Federation of Protestant Welfare Agencies, an anti-poverty advocacy organization that is part of the team that commissioned the poll, and co-chair of the National True Cost of Living Coalition. “They simply don’t have the breathing room to plan beyond their present needs.”

About 40% of respondents were unable to plan beyond their next paycheck, and 46% didn’t have $500 saved. The February poll found that more than half said it’s at least somewhat difficult to manage current levels of debt.

 

The quick rise in interest rates, coupled with high levels of outstanding debt, helps explain the disconnect between economic indicators and how many Americans feel financially.

The poll, conducted by Seven Letter Insight, also highlights the divide between debt-free households who are sheltered from the impact of rising rates and families who are overwhelmed with ballooning loan and credit-card payments. One third of the respondents said they have no debt at all.

The responses on savings also show wide disparities. About one in five respondents have at least $10,000 saved, but 28% have no savings at all. Overall, one in six said they have to make tough decisions on which bill to pay first on a regular basis.

David Jones, co-chair of the National True Cost of Living Coalition, said the polling results crossed party lines.

“It was Republicans, Independents, Democrats expressing the same kinds of issues,” he said. “It’s not going away no matter who becomes president.”

Some of the findings tracked with the Federal Reserve’s annual survey of household economics and decisionmaking, published last month. In that poll, close to half of respondents could cover a $2,000 expense, but 18% of adults said the largest emergency cost they could handle right now using only savings was under $100, and 14% said they could afford an expense of $100 to $499.


©2024 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

 

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