A new report suggests more and more Americans making $150,000 or more are living paycheck to paycheck.
Transcript:
Conway Gittens: Tech stocks were strong across the board on Monday. Investors are anticipating big tech earnings which begin Tuesday with Google-parent Alphabet. McDonald’s and Chipotle are two other notables set to release results. Meanwhile, the JOLTS survey, which covers layoffs, turnovers, and quit rates, will be released. And we get a reading on consumer confidence.
Speaking of consumer moods and habits – a new report suggests a higher number of six-income families are now living paycheck to paycheck. According to a report by Bank of America, someone is living paycheck to paycheck when more than 95 percent of household income is used to cover bare necessities like shelter, food, transportation, utilities and child care.
The report says that’s what’s happening to 20 percent of US households earning more than $150,000 a year. Bank of America used anonymous income and spending data from its customers’ bank accounts.
Conventional thinking may believe the more money people earn, the more disposable cash they have. The data, however, doesn’t back that up. Authors of the report say high-income earners also have high-income bills. “Higher-income households may have bought larger, more expensive, homes and consequently have bigger mortgages. And often along with bigger homes come bigger insurance costs, property taxes, and utility bills.”
While inflation takes a heavier toll on those with smaller incomes, the report shows inflation as an equal-opportunity drain on wallets. The cost of living is about 20 percent higher than it was before the pandemic, no matter what the take-home pay.
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