You might find it hard to believe but 10 percent of millionaires are living paycheck to paycheck. Not many are going to shed any tears for these families that simply spend beyond their means and have a major case of lifestyle inflation but it does highlight a problem in our society about wise financial management. Very few people make it into the two comma club but even then, as many take on additional debt and larger purchases the once large nest egg begins to look much smaller.
“(USA Today) What this is saying to me is even when you start looking at people who have managed to accumulate some wealth, they are also concerned about their future and about retirement,” says Rich Brose, senior director strategic consulting for financial services at MaritzCX, which provides customer experience software and research services to help companies improve sales and customer retention. “They share a lot of the same concerns as … the middle class and even people who might be struggling a little bit more.”
Many seem to still be shaken by the deep recession of 2008 and its aftermath, despite the gradual uptick currently occurring n the economy.”
Being able to control your expenses is just as important as saving and generating a healthy income. What use is it having a high income if you simply cannot hold onto what you are bringing in? You just become a hamster with a nicer treadmill.
The latest jobs report showed a relatively healthy month for April 2014. 288,000 jobs were added and the jobs were being added across various industries. This report came in higher than most economists were predicting. However, even with this boost the trajectory of added jobs is still very low compared to other recoveries. One month does not make a trend. During the same month another survey showed that over 800,000 Americans dropped out of the labor force. Some of this can be accounted for by the aging of the American population but certainly not the bulk of the drop. There seems to be many variables at play with the employment report.
When we look at previous recoveries this one is relatively weak. So far in this recovery we are adding around 150,000 jobs per month. Compare this to most of the 1990s when we were adding over 200,000 jobs a month with a smaller population. These figures help us understand why many Americans still feel this recovery as being very lackluster.
Here is some numbers for perspective:
Source: NAR, BLS
Clearly this is not a strong recovery but the latest month of data does show a glimmer of hope for the economy.
There is a growing disconnect in the country between the working class and those in more professional careers. Part of this is coming from massive globalization that is extracting lower wages for the vast portion of our nation. The market craves lower costs and higher profits and the two don’t typically align with keeping things steady in a time of massive change. Innovation and transformation are occurring at dramatic speeds that are beyond the capacity of most regular people trying to live their daily lives. The expansion of lower paying jobs is simply a consequence of this transformation. Certain skills are highly valued and wages in these fields are expanding at a healthy clip. However for those lacking skills the path to a middle class lifestyle is narrowing at a quicker pace. The need to keep up and stay on top of the market is pushing people to keep their toolkit sharp.
Growth is simply a part of our new economy. This has brought on some of the most wonderful marvels of all-time. Even a king in the Middle Ages did not have the access that a regular person has to information today. You can be more informed than the highest ranking official from only a few hundred years ago which is a fraction of human history. Yet people are mostly interested in what is going to happen during their lifetime.
This is why it is interesting to look at the top 20 lowest paying and highest paying employment sectors in the United States:
Source: Zero Hedge
Of course what is typical is that the bulk of jobs are in the lower paying fields:
Something to keep in mind as the recovery continues to go on.