A Huge Number of Americans Have No Financial Safety Net

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More than three years after the Great Recession officially ended, two in five households are still living paycheck to paycheck. This grim statistic is part of a new survey conducted by CareerBuilder.com, and it’s not the only recent indication that many of us are going through some serious financial struggles. In its new earnings report, the nation’s biggest retailer also emphasized the persistent inability of American consumers to reclaim financial stability. What gives?

Blame the recession, for starters. In its annual survey of 3,800 full-time workers, CareerBuilder found that more than half of Americans who are living paycheck to paycheck weren’t forced to do so until 2008. What’s more, that 40% figure doesn’t even tell the whole story. The survey also found that 37% of respondents sometimes live paycheck to paycheck, and 20% have been unable to make ends meet over the past year at least once.

Although the number of people living paycheck to paycheck dropped from a 2008 high of 46%, this is still an alarming number of people who could be one car repair or medical bill away from financial catastrophe. Even relatively minor unexpected expenses can quickly mushroom for people who have no savings, because many turn to credit cards or short-term loans and compound their financial burden with interest costs.

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According to the survey, people between the ages of 45 and 54 have the highest rate of living paycheck to paycheck at 43%, while workers above the age of 55 are the least likely to be in this situation, with just over a third responding that they live paycheck to paycheck.

Meanwhile, in its new earnings report, retail giant Wal-Mart discussed the lack of a safety net in many household budgets. In a recent article, the Wall Street Journal cites Wal-Mart CEO Mike Duke saying that the number of American customers subsisting paycheck to paycheck “remains pronounced.”

The Journal says Duke blames “continuing economic pressures” for the malaise that’s hurting consumers today. “Wal-Mart has been challenged recently as its core lower-income customers in the U.S. contend with high gasoline prices and persistently high unemployment levels,” the article says. By some accounts, it’s already happening. A quarter of women and 17% of men told CareerBuilder that they missed at least one monthly payment in the last year.

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Given that more than a quarter of respondents in the CareerBuilder survey told researchers that they’re not saving a penny right now, while an additional 29% say they only save $100 or less a month, the situation of Americans skirting the financial cliff is going to get worse before it gets better.

When it reported earnings to investors last week, Wal-Mart predicted that the pressure on American households is only going to intensify. “The company also expects inflation to rise in the back half of the year, particularly on food and drought-related items like corn and soybeans,” the Journal says.

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