Government Shutdown Highlights 78 Percent of Workers Live Paycheck to Paycheck
Inside Subprime: Jan 17, 2018
By Lindsay Frankel
The partial government shutdown has left about 800,000 federal workers without pay since Dec. 22nd, and there’s no end in sight. President Donald Trump has said the shutdown could go on for “months or even years” until his demands for funding are met. About 420,000 of those workers are still required to work without earning income, and 380,000 were told to stay home, according to
Many furloughed government employees have been forced to use alternative sources of income. In the best case, these workers have dug into their savings accounts. But those without a safety net have relied on credit cards or crowdfunding, and worse, including payday loans.
National Treasury Employees Union president Tony Reardon told CNBC that the group has listened to hundreds of stories that depict how federal workers are struggling to make ends meet during the shutdown. “They’re scared,” he says. “They don’t know how they’re going to put food on the table.”
Their financial stress highlights that most U.S. workers would suffer from missing a paycheck – 78 percent say they live paycheck to paycheck, according to a 2017 CareerBuilder report. That includes 81 percent of women and 75 percent of men. What this means is that they’re able to put very little money into savings each month, leaving them vulnerable to emergency expenses or missed pay. More than half of respondents put less than $100 into savings every month, and 70 percent are in debt. Matters are worse for a quarter of workers, who said they didn’t make sufficient income to cover their expenses each month. And for workers in minimum-wage jobs, 71 percent couldn’t make ends meet.
While those with low wages struggle the most, 10 percent of those making six figures reported living paycheck to paycheck as well. High cost-of-living, student loan debt, and other factors can make it difficult for even those with a high income to save money.
A recent report from the Federal Reserve Board found that 40 percent of Americans don’t have even $400 to cover an emergency expense. The record-breaking shutdown could drag on for some time, leading many workers to borrow money. A senior White House official reported that the White House is likely to provide back pay to furloughed employees, but around 4.1 million contractors whose jobs were impacted will not receive compensation.