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Comment by lennixm | Hacker News Reader

People need to stop using this stat. It's completely useless. There are literally people making top percentile incomes saying they're living paycheck to paycheck in these surveys because they interpret the survey questions wildly different than other people. A tiny, tiny percentage of Americans would literally go hungry if they didn't get their next month's paycheck the rest would have to cash out some small percentage of their S&P 500 ETF.

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> A tiny, tiny percentage of Americans would literally go hungry if they didn't get their next month's paycheck

"71.93% of Americans Living Paycheck to Paycheck Have $2,000 or Less in Savings"[0].

So no, it's not a tiny percentage. $2k or less in savings means being one emergency expense away from not being able to pay rent or your house loan next month.

- [0]: https://www.forbes.com/advisor/banking/living-paycheck-to-pa...

This only shows how big economic illiteracy is. Not how much people are earning vs the cost of living.

The personal savings rate has slowly halved over the past 60 years[0].

Did everyone become illiterate or maybe the inflation rate has exceeded the growth rate of wages[1], among other things?

What's funny is that on two comments rejecting my argument one accuses me of considering people "too dumb" to take their own financial decisions, the other tells me people are actually too dumb and that's why they are in financial trouble.

- [0]: https://tradingeconomics.com/united-states/personal-savings

- [1]: https://www.epi.org/publication/charting-wage-stagnation/

The article you linked mentions "Lack of budgeting and financial planning" and "Social pressures" for reason of living paycheck to paycheck. And those are self reported values.

Last 60 years we experienced enormous growth of advertising - is it really hard to believe that many people are having big problems with limiting their spending.

> Economic illiteracy

I respect your opinion but the stats presented before does not “shows“ illiteracy but low investments. Lack of liquidity to invest seems a very plausible raison because a revenu threshold has to be passed to be able to buy food before founds. This stat is probably almost a proxy for how many Americans are below that threshold.

It is really hard to believe that 71.93% of Americans are on the verge of homelessness and starvation. Much more plausible (and even mentioned in the linked article under "Lack of budgeting and financial planning" and "Social pressures") are just bad habits.

Of course there are economic literate people who really are struggling, but I doubt they make even half of those 71.93%.

In this case you are revealing your own (statistical) illiteracy. It’s referring to 70% of people who claim to be living paycheck to paycheck, not 70% of all people.

There’s a range of goods and services accessible on may consider after food but before investments : medical expenses, gas to visit family on week end…

>> "71.93% of Americans Living Paycheck to Paycheck Have $2,000 or Less in Savings"[0].

It's a meaningless statistic. They can still have high net worth and/or large incomes even if they don't keep cash on hand.

Well it might please you then that about 50% of the respondents report low income as the cause for living paycheck by paycheck. Even more report high monthly bills as a cause.

Just read it, it's all in there.

People thinking their income is to low is not exactly news. I haven't personally met anyone who would ever claim their income is to high. Why do you think I haven't read it? Do you always agree with everything you read?

I believe you didn't read it because your argument is quite poor and doesn't mention some relevant points the article makes.

I may not always agree with everything I read, but at least I take the time to read it before openly disagreeing with it.

I'm sorry to disappoint you. I did read it and found it unconvincing to say the least.

I'm confused about that figure, since not having any savings to fall back on seems to me to be the definition of living paycheck-to-paycheck. How is that not 100%? The argument you're making seems tautological, and doesn't really account for the elasticity of people's spending habits, or the income ranges they fall into in the first place.

In genera, "self reporting" needs to be viewed as the untrustworthy statistics it is. I hear it a lot recently in the social siences. And media happily parrotting the results, as proof of whatever they are currently trying to push. I wonder how much of these self-reported issues would be seen in a completely different lens if those asked were forced to discuss their answers within a certain peer group. "What, you say you're poor, with that car and that house?"

Also consider that some of the respondents are actually "bragging" about living paycheck-to-paycheck so they don't seem any poorer than anybody else, when they are actually not even sustainable and deeply know they are heading downward toward bankruptcy or something like that unless things look up.

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