Facing the Facts: Erratic Financial Circumstances Are Widening the Gap
50% Gas
19% Beef
17.8% Rent
4.7% Wages
North Americans have experienced an unprecedented economic upheaval over the past two years—record unemployment, supply chain bottlenecks, labor shortages, and record levels of inflation. Here are some of the facts: As of February 2022, the average family is spending about $276 more each month on household expenses compared to 2018 and 2019. 1 More than 61% of Americans reported they now are living paycheck to paycheck. 2 Gas prices skyrocketed 50%, putting a strain on the cost of commuting to work and forcing families to travel less. 3 Beef prices jumped 19%, ballooning grocery budgets and forcing families to make more affordable meals with less expensive meats like pork and chicken. 3 Rent spiked a whopping 17.8% between January 2021 and January 2022. The median rent price as of January 2022 was $1,312. 4 While prices rose, so did wages. But not at a similar rate. Even with a 4.7% annual increase in wages to an average of $31 an hour, most workers still received a 2.4% pay cut in 2021 because of inflation. Wage increases in only the bottom 25% of earners narrowly outpaced inflation by 2.3%–3.0%. 3 It’s no surprise then that a new Bankrate survey reported that many Americans have less money in their savings accounts today than they did two years ago. Only 17% of Americans have more money in their accounts today, while 34% have less. Another 42% were able to maintain the same level of savings. 5 But overall, 51% of Americans have less than three months’ worth of income saved in an emergency fund. 25% reported having no emergency fund at all, up from 21% in 2020. Millennials are more heavily affected—57% reporting they couldn’t cover three months’ worth of expenses. Gen Xers are not far behind with 49% unable to cover three months of expenses. 5 To feel financially secure, Americans reported that they would need to make about $122,000 annually—more than double the average national salary. 1
$276
SECURE
1 Ariel Zilber, “Inflation Costs the Average US Household $276 More a Month, Study Says,” New York Post , February 10, 2022. 2 Jessica Dickler, “Despite Rising Wages, 61% of Americans Are Still Living Paycheck to Paycheck, Report Finds,” CNBC, February 17, 2022. 3 Greg Iacurci, “Despite Higher Wages, Inflation Gave the Average Worker a 2.4% Pay Cut Last Year,” CNBC, January 12, 2022. 4 Chris Salviati et al., “Apartment List National Rent Report,” Apartment List, January 27, 2022. 5 Sarah Foster, “Survey: More than Half of Americans Couldn’t Cover Three Months of Expenses with Emergency Savings,” Bankrate, July 21, 2021.
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