The lead message in the “Report on the Economic Well-Being of U.S. Households in 2018” conducted by the Federal Reserve Board is upbeat. It says: “Many families have experienced substantial gains since the survey began in 2013, in line with the nation’s ongoing economic expansion during that period.”
However, it quickly qualifies that by reporting, “Even so, another year of economic expansion and the low national unemployment rates did little to narrow the persistent economic disparities by race, education, and geography.”
The report surveys 11,000 households and compiles info on such things as current financial situation, income, employment, unexpected expenses, debt and several other indicators to draw a nationwide picture of who’s doing well and who’s left behind.
When asked to characterize their overall financial situation, 18 percent of those surveyed said they were “just getting by” while another seven percent reported they were “finding it difficult to get by.” That’s a full one-quarter of the US households that are living on the edge.
Two-thirds of blacks and Hispanics report that they are doing at least okay financially, but there’s a wide gap between that and the nearly eighty percent whites who give the same answer.
Fifty-six percent of adults with family income less than $40,000 say they are doing okay financially (versus 94 percent of adults with income greater than $100,000). These households must not be in Connecticut, where the United Way estimates that a household survival budget for a family of four is nearly twice that amount.
Married households, in general and perhaps as expected, are more likely to report that they are doing at least okay; yet only 66 percent of single heads of households could answer affirmatively. In Connecticut, the number of single-parent households is just shy of 100,000. That’s a lot of children depending on a sole parent’s income.
Here’s a telling statistic: If faced with an unexpected expense of $400, 61 percent of adults say they would cover it with cash, savings, or a credit card paid off at the next statement. Twenty-seven percent would have to borrow or sell something to pay for the expense, while another 12 percent would not be able to cover the expense at all. That adds up to 39 percent of U.S. households that cannot sustain even a modest financial bump in the road.
Two in 10 adults are working but say they want to work more. Blacks, Hispanics, and those with less education are less likely to be satisfied with how much they are working.
Unpredictable work schedules are associated with financial stress. One-quarter of employees have a varying work schedule. The Connecticut United Ways mention this trend in their latest ALICE (asset limited income constrained employed) report. “The new “gig” economy presents new employment possibilities; however these positions often have limited job security, few or no benefits, fluctuating hours, and unreliable wages.”
Who’s impacted the most? Low- to moderate-wage households. With unpredictable work hours (and income) it’s hard for them to pay monthly bills regularly or plan for childcare.
So while many households’ perception of economic ease has greatly increased over the last six years, there are still significant numbers of households that have not benefited from the economy’s rising tide. Want to find out more about what it takes to survive financially in the state? read the latest ALICE report.