Millions of Americans earning $100K are living paycheck to paycheck: survey

Publish date: 2024-08-24

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More than half of Americans earning six-figure salaries admitted they were living paycheck to paycheck last year as high inflation slammed households, according to an alarming study released this week.

As of the end of December, 51% of Americans with $100,000 or more in annual income said they lived paycheck to paycheck, according to the survey conducted by LendingClub and Pymnts.com. The share rose 9% compared to one year earlier, when 42% of six-figure earners made the same admission.

Overall, a whopping 64% of US consumers — the equivalent of 166 million Americans — said they were living on razor-thin budgets each month. That was up from 61%, or about 9.3 million, compared to the previous year’s findings.

Of the 9.3 million Americans who joined the ranks of monthly struggle, 8 million earn more than $100,000.

“The effects of inflation are eating into every American’s wallet and as the Fed’s efforts to curb inflation drive up the cost of debt, we are seeing near-record numbers of Americans living paycheck to paycheck,” said Anuj Nayar, financial health officer at LendingClub.

“While the number of Americans living paycheck to paycheck is close to the height we saw in the middle of the pandemic, the causes appear to be very different, as the economy is not sheltering in place like it was back in 2020,” Nayar added.

Overall, inflation hit 6.5% in December. AFP via Getty Images

Inflation has cooled slightly in recent months, but it still remains a major source of pressure on US households. Overall, prices rose 6.5% in December, while the cost of groceries jumped nearly 12%, according to the Consumer Price Index.

The services index, which includes housing, transportation and medical care, rose 7% compared to last year.

The share of Americans who said they were having trouble covering their bills jumped to 24% in December, up 2% compared to the same month one year earlier, according to the survey.

Grocery prices were up nearly 12% last month. Anadolu Agency via Getty Images

Within the six-figure income bracket, 16% said they were struggling to pay their bills.

Despite some improvements in inflation, many Americans are still taking a pessimistic view of the economy. Just four out of 10 Americans who admitted living paycheck to paycheck expect their incomes to keep pace with inflation this year.

Additionally, 90% said their pay increases were effectively wiped out by higher prices last year.

Inflation remains a major source of pressure on US households. Xinhua News Agency via Getty Ima

“We can expect more and more Americans of all incomes identifying themselves as living paycheck to paycheck until we see the economy recover,” Nayar added. “Now more than ever, it is crucial for consumers to examine spending and build a cushion of savings to prepare for the unexpected.”

The survey based its findings on responses from nearly 4,000 US adults between Dec. 8 and Dec. 22.

Last week, data released by the Commerce Department showed a decline in personal spending in December — a sign that Americans are cutting back on purchases due to the impact of inflation.

Americans will be watching closely this week as the Federal Reserve makes its decision on another interest rate hike. Fed officials have signaled rate hikes will continue until inflation is addressed — despite concerns of a slowing economy.

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