A new report out Monday shows that 59% of U.S. consumers were living paycheck to paycheck last month and many were unable to afford an emergency expense of $400—all while the country’s corporations enjoy record-shattering profits.
Compiled by PYMTS and LendingClub, the analysis finds that nearly three in five consumers were living paycheck to paycheck in July as high inflation continues to eat into workers’ inadequate wages.
“A large share of consumers are essentially living on the razor’s edge.”
While the July figure represents a slight decline from the June level of 61%—leading the corporate press to put a positive spin on the data—the report stresses that the share of consumers living paycheck to paycheck “has trended upward” over the past year, “increasing from 54% in July 2021.”
According to the data for last month, a third of those living paycheck to paycheck say they would be unable to afford a $400 payment in the case of an emergency such as a health crisis, a leading cause of bankruptcy in the U.S.
“A large share of consumers,” the new report observes, “are essentially living on the razor’s edge.”
Corporations and their top executives, by contrast, have never had it better.
Last week, the Commerce Department’s Bureau of Economic Analysis released data showing that nonfinancial corporate profits in the U.S. reached an all-time high of $2 trillion in the second quarter of this year as companies push rising costs onto customers.
And while many of their employees struggle to afford basic necessities, top CEOs brought in an average compensation package of $18.3 million last year, according to a recent report by the AFL-CIO.
“In 2021, corporate CEOs were quick to blame worker wages for causing inflation. But workers’ real wages actually fell 2.4% in 2021 after adjusting for inflation,” the union’s analysis notes. “Working people experienced a pay cut with every price increase while U.S. companies enjoyed record profits and CEO pay increased at an even faster rate.”