Welcome to the Recovery – McKinsey Survey Shows 40% of Americans Living Paycheck to Paycheck, Up From 31% in 2012
Nothing screams economic recovery like 2 out of every 5 Americans living paycheck to paycheck. Especially when that number has reportedly increased by 33% since 2012.
Perhaps someone should inform these destitute plebs that the stock market is up nearly 45% over the past two years, and after all, nothing says economic success like the 0.01% enriching themselves via fraud and financial engineering.
Here are two of the most sobering findings from the survery:
- 40 percent of the consumers we surveyed said they are coping with the challenge of living paycheck to paycheck, up from 31 percent in 2012.
- Today just 23 percent say they are optimistic about the economy, down from 27 percent at the beginning of the recession in 2009.
If that’s not enough for you, check out these additional excerpts from the summary:
The slow start to the holiday shopping season underlines the findings of McKinsey’s latest Consumer Sentiment Survey. Every six to twelve months since August 2008, we have asked a representative sample of at least 1,000 Americans about their views on the economy and their own financial future, and how these opinions are shaping their buying decisions. The result is a unique data set that tracks how attitudes and behaviors have changed over the past six years. In addition, we have completed nine surveys outside the U.S., giving our data a global perspective.Here are the salient findings from this year’s survey:Our report in September 2012 showed that things were looking up for most Americans. Many aspects of consumer sentiment indicated marked improvement. Yet from there, things have either plateaued or gotten worse. Consumers are still worried about losing their jobs (39 percent in 2014), and 40 percent of the consumers we surveyed said they are coping with the challenge of living paycheck to paycheck, up from 31 percent in 2012.The significant economic pressure that families earning less than $75,000 a year feel has caused many of them to make spending adjustments in order to make ends meet. Roughly 40 percent of these households say they are making changes, including cutting back and delaying purchases, as compared to 22 percent of those in households earning at least $150,000 a year. Americans at all income levels have yet to return to their pre-recession positive feelings about the country’s economy. Today just 23 percent say they are optimistic about the economy, down from 27 percent at the beginning of the recession in 2009.
While the number of consumers cutting back on spending has stabilized, Americans are still pinching pennies. Decreasing purchases of high-end brands and doing more one-stop shopping to reduce the number of trips are just as popular as they were last year, with 40 percent of consumers saying they have cut their spending over the past 12 months.
Comment from Dennis: "Here's an idea. Why not encourage your customers to look at our business as a ONE STOP SHOPPING opportunity? Show them HOW the VALUE of purchasing our products and getting ADR rewards will save them money and TIME."
An even bigger proportion of Americans (55 percent) say they continue to look for ways to save money, including paying more attention to prices, using coupons more often, shopping around to get the best deals, and buying more items in bulk.
Multiple years of austerity have left consumers with altered views about spending. Almost 40 percent say they will probably never go back to their pre-recession approach to buying. Twenty-nine percent say they now have new attitudes and values about spending, a figure that’s up from 17 percent in 2010. Another 24 percent claim that their opposition to increased spending is due to a change in their economic situation.
With recoveries like these, who needs recessions.
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