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People are running out of money

One mystery of the labor shortage is the missing paycheck: How long can people choosing not to work last without an income?

Nobody’s sure, but clues are emerging. The economy continues to recover from the COVID wipeout, and hiring remains strong. Yet Americans are beginning to report more difficulty paying routine bills, not less, and it’s probably related to the end of federal relief measures that kept millions above water during the last 20 months.

In the Census Bureau’s “household pulse” survey last May, 46.7% of respondents said they had no difficulty paying usual household expenses. By December, that had fallen to 39.9%. During the same time period, the portion saying it’s a little, somewhat or very difficult to pay those bills rose from 45.9% to 49.9%. (The remaining 10% or so did not answer the question.)

Since the economy has been steadily improving, the deterioration in household finances isn’t due to worsening unemployment or falling incomes. But the last stimulus payments went out in the first half of 2021, and emergency federal jobless benefits ended in September. With inflation at 6.8%, buying power is also eroding at the same time aid is drying up.

“There are people who are running out of money," says Philippa Dunne of TLR Analytics. "It's getting harder for them to pay their bills. The expiration of expanded unemployment insurance benefits and stimulus payments have taken a toll on household finances."

There seem to be plenty of jobs for people who need to work. Employers report 10.6 million job openings, nearly the most ever. Unfilled jobs hit unprecedented levels in 2021, as COVID-related anomalies wrought havoc with the labor force. Some parents who want to work must now deal with unpredictable school schedules and an acute shortage of affordable child care. Several million potential workers may still be too concerned about catching COVID on the job to return. Federal aid money has given millions more a financial cushion that could delay a return to work or let them hold out for a better job longer than they may have been able to get before. A record-high quit rate—the portion of workers choosing to leave their jobs—suggests workers have newfound leverage, and they’re using it.

If jobs are there for the taking, people starting to feel a financial pinch should have no trouble nabbing a paycheck or finding new work that pays more or offers better flexibility. But the door to work might not be as wide open as aggregate data suggests. Job-seekers say companies seem to post some listings just to see if they can lure a dream candidate, who never materializes, leaving those jobs open indefinitely. Not all employers are boosting pay and benefits. Some parents can’t find any job offering enough flexibility to let them care for kids or sick family members.

Financial strains could get worse. Another important element of federal relief—an expanded child tax credit—expired in December and it’s not clear Congress will renew it. The baseline child tax credit remains in place, but the expansion was worth hundreds or thousands of dollars extra to qualifying families. It also allowed those families to claim half the credit in advance, through a monthly bank-account direct deposit or check in the mailbox. The December Census survey showed 39% of child tax credit recipients—nearly 20 million households—spent the money, most likely on necessities. Thirty-eight percent said they used the money to pay down debt and just 26% said they saved it.

One surprise of the COVID pandemic was a broad improvement in household finances, when many economists expected soaring unemployment to make things much worse. Roughly $6 trillion in relief programs passed by Congress gets much of the credit. Consumers also became frenetic savers, since it was hard to spend money when businesses shut down or it felt unsafe to go out. The saving rate rocketed from 8.3% before the pandemic to a high of 33.8% in April 2020. It stayed elevated for the next 15 months, providing a financial cushion as businesses struggled to get back to normal.

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by Anonymousreply 71January 15, 2022 8:42 AM

A lot of millennials and Gen Z live with their parents. I think it’s 35% of millennials? Could be more since Covid.

It has been a holiday to the minimum wage worker, 18-30+ who still lives at home.

by Anonymousreply 1January 11, 2022 2:28 AM

Maybe they should have given us more stimulus money.

by Anonymousreply 2January 11, 2022 2:33 AM

I think we're heading for a waterfall in a raft. So many seasonal jobs, ones that depend on a good economy and disposable income. People just don't learn from the past.

by Anonymousreply 3January 11, 2022 2:34 AM

Some those hourly jobs will be automated. Fast food cashiers are not necessary and ordering kiosks are showing up. Can't there be a fully robot operated McDonalds?

by Anonymousreply 4January 11, 2022 2:43 AM

[quote] Yet Americans are beginning to report more difficulty paying routine bills, not less, and it’s probably related to the end of federal relief measures that kept millions above water during the last 20 months.

It's not. And that's the stupidest fucking thing I've heard since trump got kicked off of Twitter.

We received about $2,000 in stimulus checks. In most states, enhanced unemployment ended 7 to 9 months ago.

Do they really fucking think people have supporting themselves for 2 years on $2,000?

It's because of inflation. Salaries are up for NEW HIRES, but for more than half of Americans who kept the country running by working during the entire pandemic, our wages remained THE SAME.

by Anonymousreply 5January 11, 2022 2:44 AM

That cushion is evaporating. The saving rate in November fell to 6.9%, and Census data shows that more people are now using credit cards to pay for routine expenses. A saving supercycle has now yielded to “dissaving,” when people spend down their surplus and start to borrow more.

None of this means the economy is in particular trouble in 2022, since growth remains solid and robust hiring should resume once the Omicron COVID variant begins to retreat. But tougher economic times for at least some Americans will shape political decisions in 2022 and probably impact the upcoming midterm elections.

There are murmurs in Washington about another round of aid for business and perhaps some consumers still struggling. If it happens, it won’t be nearly as big as last year’s $2 trillion package, but it would reignite disputes between liberal politicians who think Washington should do much more and conservatives who think it has already gone way too far.

Also lingering is President Biden’s “build back better” legislation, which Democrats are revamping in the hope it can pass by the end of February. One of the biggest issues is whether to reauthorize the expanded child tax credit for another year or longer, or revert permanently back to the baseline credit. That bill could also include child care assistance and other measures that might help sidelined workers get back in the action. The question for 2022 is how much help they actually need.

by Anonymousreply 6January 11, 2022 2:56 AM

The “low” unemployment rate is always deceptive. There are millions of Americans who are not counted because they are not actively looking. If you are professionally skilled there are good jobs but otherwise it’s shitty jobs that no one wants.

by Anonymousreply 7January 11, 2022 3:01 AM

And get a load of this!

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by Anonymousreply 8January 11, 2022 3:03 AM

Obviously the Rethugs are working titelessly behind the scenes to throw down as many roadblocks as they can for Biden. Higher gasoline prices (Jared and the A-rabs); shipping/supply logjams (Deplorable Teamsters) leading to higher prices; predatory home loans... They don't care how many Americans they destroy on their way to WINNING.

But they'll advertise it as, "Were you better off 4 years ago? Well?!"

by Anonymousreply 9January 11, 2022 3:06 AM

Companies are raising prices on everything. Then the claim it’s “inflation”.

It’s a bunch of malarkey.

by Anonymousreply 10January 11, 2022 3:08 AM

In November 2021, about 61.8 percent of the United States civilian labor force participated in the job market.

38.2 percent don’t work.

by Anonymousreply 11January 11, 2022 3:19 AM

Does that 38.2 percent include kids? Retirees? The implication is 38.2 percent of working age people don’t work.

by Anonymousreply 12January 11, 2022 3:24 AM

R12 it says "civilian labor force"

by Anonymousreply 13January 11, 2022 3:52 AM

[quote]Companies are raising prices on everything. Then the claim it’s “inflation”.

The quality and size of the products has decreased. Especially paper products. Name brand toilet paper and paper towels are worse than the store brand. I had stocked up on Angel Soft toilet paper because it was all I could find last year. I opened a package last week and it's 1 ply. It's worse than the store brand. It's so thin, I can't even use it to blow my nose with it. It's useless

by Anonymousreply 14January 11, 2022 4:35 AM

Correct. Around 40% of American adults over 16 don’t have a job.

by Anonymousreply 15January 11, 2022 4:43 AM

R4, didn't somebody post in a time-glitch thread that he or she saw a robot working at a McDonald's?

Nevermind, that's spooky.

I don't want to works so I've decided to become an extreme couponer.

by Anonymousreply 16January 11, 2022 4:44 AM

Friend of a friend called me today asking if I knew anyone that was hiring. Her unemployment has run out and she has no savings. She worked in retail pre Covid , so I told her that literally every retail store in town is hiring. She doesn’t want to do retail work anymore, and wants a job ‘in business’ making at least $25 an hour. Fucking delusional. She is going to end up living on the streets because she now thinks that she is too good for retail.

by Anonymousreply 17January 11, 2022 4:51 AM

I don’t know…. This whole house of cards has seemed like it was going to coming crashing down for the last couple of years but it never does.

Maybe the algorithms and machine learning have figured it all out.

by Anonymousreply 18January 11, 2022 4:56 AM

The banks know how much money you make down to the penny so they will cut you off if the time comes.

by Anonymousreply 19January 11, 2022 4:57 AM

I’m trying to stay at work but between health issues, stress, anxiety and depression, it’s a daily struggle to stay motivated. I feel hopeless. I don’t mind working hard, but I feel like I’m constantly running myself into the ground just keeping up. I’m trying to just take it day by day, but it’s not easy after two years of this shit.

by Anonymousreply 20January 11, 2022 4:59 AM

I’m curious if all of the recent “early retirees” have enough money for retirement. Good for them if they can keep paying the bills.

by Anonymousreply 21January 11, 2022 5:13 AM

I walked up Broadway from Canal to Houston today. Easily 1/3 of the street level businesses are vacant. A whopping 100% of the stores between Canal and Grand are permanently shuttered. Every single one, both sides of Broadway. This had been prime, annoying, over-crowded, touristy SoHo once. What’s going to happen to all this empty space?

by Anonymousreply 22January 11, 2022 5:25 AM

I can’t wait till the housing market crashes so I can buy a home finally.

by Anonymousreply 23January 11, 2022 5:43 AM

Is this why you guys want to make your own cheese? Is it financial?

by Anonymousreply 24January 11, 2022 5:49 AM

Big business is trying to destroy Biden just like they tried to destroy FDR back in the 30s.

Fuck big business and their obstructionist behavior.

by Anonymousreply 25January 11, 2022 5:55 AM

Are they really surprised people don’t have extra spending money when the price on everything has skyrocketed, including utilities? My natural gas bill this month is $160 even though I already have my thermostat set to a low setting!

by Anonymousreply 26January 11, 2022 6:05 AM

It’s a good question what will happen to commercial real estate. Maybe they will turn it all into Amazon centers.

by Anonymousreply 27January 11, 2022 6:20 AM

Housing for robots.

by Anonymousreply 28January 11, 2022 6:23 AM

r25, REALLY big businesses actually LIKE Democrats, because it's just like outsourcing things like healthcare to the government & writing one predictable check knowing other big businesses are paying the same predictable amount they are.

It's SMALL businesses who hate Democrats with a passion. Big businesses are risk-averse bureaucracies in their own right. Small businesses try to act like sole proprietors & get in trouble with Democrats because they don't have the resources to act like big businesses.

If you have 24,000 employees, giving a month of paid leave to new parents isn't a big deal (especially if they're just cogs in a metaphorical machine), as long as every other company has to play by the same rules. If you have 3 employees and one becomes a new parent, the same rule is financially devastating. Even if the government pays their salary for the month, losing 1/3 of your employees and being shorthanded for a month is rough.

That's why the most vehement staunch Republicans are small business owners. CEOs at the very top might lean Republican, too, but HR and middle-management is HARDCORE Democrat-land. Even big chunks of senior management.

All big businesses care about is other companies being forced to play by the same rules... the rules themselves barely matter.

by Anonymousreply 29January 11, 2022 6:43 AM

R29 Well that was a different perspective

by Anonymousreply 30January 11, 2022 6:52 AM

Sorry R23, but I don’t expect the housing market to crash. In fact, over the next two years I believe it’ll be going much higher. Over time you might see some minor price decreases as the market steadies, but if home prices were to fall drastically, cash rich institutional/corporate buyers would snap up the bargains before individual home buyers could.

Seriously, if you’re waiting to see house prices fall before you consider buying you’ll be out of the running. And the bargain low interest rates we’ve got now will be going away fairly soon.

Best advice: if you’re serious about buying, get a top notch real estate agent to watch for good deals.

by Anonymousreply 31January 11, 2022 7:13 AM

R31 No way will the market keep going up if people have no money. And the low interest rates mean nothing when the prices are ridiculous.

by Anonymousreply 32January 11, 2022 7:51 AM

R22

Well BdeB got his wish to bust Soho and bit of Tribeca with zoning changes, that may have some affect on retail as it could change mix of things down there.

City council on way out in December also passed a bill creating a panel that will study uses for empty commercial/retail space.

In many cases zoning calls for ground floor retail. This could be changed to say community use, educational, residential, etc...

by Anonymousreply 33January 11, 2022 8:02 AM

People are "running out of money" because all the free goodies from federal government ended, and they've spent down most or all of what they stashed away.

Keep in mind it wasn't just all that UI and stimulus money, but various bans or moratoriums put in place (eviction, student loan payments, utility bills, etc...), meant people didn't have to pay many monthly bills either. Those bans/moratoriums are ending or have ended in many cases. Biden extended student loan thing until May, but that I believe is only one.

R31

Depends upon who you mean by having "no money". Plenty of people weren't affected at all by covid pandemic economically. These were often same people that fled cities to suburbs or country, WFH crowd, etc... Don't forget markets have been up big time all through past two years of pandemic. People are buying homes, getting raises, switching to new jobs that pay more.... In short as per usual for this country economic pain was not spread equally during this covid crisis.

by Anonymousreply 34January 11, 2022 8:09 AM

Sheesh R32. You’re wrong on both counts.

Prices won’t drop.

Those hoping competition will slow in 2022 are out of luck, according to economists from Zillow and Realtor.com. Economic trends including tight supply, elevated demand and low mortgage rates will continue to give sellers the upper hand.

Potential buyers can expect bidding wars on many homes, particularly in the spring and summer. While no one can predict exactly what will happen, the trends listed above mean prices will continue to climb. In fact, Zillow predicts home values will rise by 11% in 2022 — not as much growth as in 2021, but still substantial.

Interest rates will rise

The Federal Reserve is expected to raise interest rates a few times in 2022, which means mortgage rates will likely rise. Both Redfin and Realtor.com predict a 30-year-fixed mortgage rate will reach 3.60% by the end of 2022, compared to an average of 3.30% now.

That’s not necessarily bad news for buyers. The “silver lining” of higher mortgage rates is that fewer speculative buyers will be in the market, because there is less money to be made. That could help the average person.

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by Anonymousreply 35January 11, 2022 8:12 AM

R35 Like economists from real estate websites are really going to say anything other than “Hurry and buy while you can! Won’t last long!”

by Anonymousreply 36January 11, 2022 9:33 AM

I really don't understand this.

If people are truly running out of money, then why are nearly 40% of working aged people not working?

There's a huge disconnect.

by Anonymousreply 37January 11, 2022 12:54 PM

R37 it’s all the people having OnlyFans and the dumb ones who subscribe to them.

by Anonymousreply 38January 11, 2022 1:17 PM

Interesting, R38.

So basically, the poor are whoring themselves out to the rich.

Yup, sounds about right.

by Anonymousreply 39January 11, 2022 4:05 PM

It's mostly turnover of low-wage work, along with some people able to make as much money from working from home as they were when they worked at, say, a Taco Bell.

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by Anonymousreply 40January 11, 2022 4:13 PM

What?

I'm shocked, I tell you. Shocked.

If you quit your job and have no source of income, you'll run out of money?

How can that possibly be.

by Anonymousreply 41January 11, 2022 4:49 PM

My teenaged niece is getting paid $22 an hour as a hostess in a steakhouse. Restaurants are desperate and are paying way more than they used to. She spends half her shifts playing on her phone.

by Anonymousreply 42January 11, 2022 7:20 PM

A lot of older folks have decided to retire now rather than later, a lot of younger folks have moved back in with their indulgent parents. Neither group fears being out on the street, and those who plan to go back to work will hold out for jobs that aren't "abusive".

IMHO that explains the "labor shortage", and I hope it all results in higher wages and better working conditions, although of course there are those who will try to solve the "problem" by allowing more immigrants in to take the jobs that don't pay enough to live.

by Anonymousreply 43January 11, 2022 10:10 PM

When I worked as a teen, I made 7-8 an hour. 22 dollars an hour. Wow.

by Anonymousreply 44January 11, 2022 10:17 PM

All these "jobs" that are out there are the usual service shit jobs-- cashier, server, etc.There isn't much out there for entry level admin asst or something else for a college graduate. Even if they pay more than a typical minimum wage shit job they don't represent any type of "career path" job.

by Anonymousreply 45January 11, 2022 10:35 PM

Maybe retail and service jobs should pay more than office jobs.

by Anonymousreply 46January 11, 2022 10:41 PM

[quote] When I worked as a teen, I made 7-8 an hour. 22 dollars an hour. Wow.

How long ago were you a teen?

by Anonymousreply 47January 11, 2022 10:42 PM

The Hindenberg disaster.

by Anonymousreply 48January 11, 2022 10:48 PM

90s R47.

by Anonymousreply 49January 11, 2022 10:50 PM

[quote] IMHO that explains the "labor shortage", and I hope it all results in higher wages and better working conditions

I hope people refusing to do hard work face nothing but misery.

by Anonymousreply 50January 11, 2022 10:59 PM

But do people retiring early have enough money for 30 years? I doubt it.

by Anonymousreply 51January 12, 2022 12:55 AM

What R35 posted aligns with financial and real estate forecasting for 2022 from most sources. You'd have to be pretty bitter to F&F the post because reality isn't what you want to hear.

by Anonymousreply 52January 12, 2022 2:41 AM

R16 (or anyone else) Do you happen to have a link to the time-glitch thread or remember its title? Thanks!

by Anonymousreply 53January 12, 2022 12:37 PM

This is such bullshit ! They are PAYING people that pop out kids up to 3 grand a month ??? And yet they screw the seniors over witb the hike in medicare?

by Anonymousreply 54January 12, 2022 1:52 PM

Where's the reward for people smart enough not to have kids and aren't a burden on society and can support themselves?

by Anonymousreply 55January 12, 2022 3:22 PM

I think I read that Medicare monthly payments were increased by around 6% but the costs of Medicare was increased by about 14%! Ridiculous.

by Anonymousreply 56January 12, 2022 4:17 PM

R55, our “reward” is what it’s always been: paying more (taxes, insurance premiums, etc.) so that breeders can pay less, all while being scolded for our selfish decision not to have children.

by Anonymousreply 57January 12, 2022 4:48 PM

I was just thinking about the same thing, OP! Apparently, an unusually high number of people retired and another high number switched to gig jobs that don't involve restaurant/retail work.

I've never not been employed FT since graduating college in the late 1980s. I honestly don't understand how people manage without regular employment.

by Anonymousreply 58January 12, 2022 5:49 PM

Encouraging to see retail jobs offering $16/hour+ starting wages. Yes, it’s still obscene but at least it seems like business owners are waking up to the reality that low wage workers need a more living wage. I think his is good for it’s pressure to increase wages for the lowest rung jobs. Unfortunately, still not truly livable but a sign that all the business profit is trickling down to workers.

Real estate WILL come down. There is no way mortgage rates go up 30%+ - meaning the amount of mortgage someone can get goes down significantly - without negatively affecting housing prices. If you pay attention to bond rates, the Fed and inflation, there is no way that mortgage rates won’t go up significantly in the next year - at the same time the housing mania caused by Covid subsides.

by Anonymousreply 59January 12, 2022 8:44 PM

People need to learn how to SAVE. I shudder to think how much stimulus $$ went for CRAP.

by Anonymousreply 60January 12, 2022 8:47 PM

But people need food choppers!

by Anonymousreply 61January 12, 2022 9:04 PM

Right on, r50! And they should also eat cake, shouldn't they?

by Anonymousreply 62January 12, 2022 9:07 PM

[quote] I shudder to think how much stimulus $$ went for CRAP.

The members of Congress who voted for stimulus giveaways are going to be held accountable in November for having caused this runaway inflation. Even more so for focusing on everything but Inflation during the last year.

by Anonymousreply 63January 12, 2022 9:16 PM

A town near me is begging people to take crappy service jobs. No, really! Business leaders and city government in Folsom, Ca., are begging seniors, students, stay-at-home parents, anyone with some free time, to take crappy service jobs and ease the "labor shortage".

No mention of these civic leaders telling employers that there wouldn't be a labor shortage if they offered living wages, benefits, or adequate working conditions.

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by Anonymousreply 64January 13, 2022 11:55 PM

Not me. I got a great job last month, and I'm making way more money than I ever have.

by Anonymousreply 65January 13, 2022 11:57 PM

[quote] Encouraging to see retail jobs offering $16/hour+ starting wages. Yes, it’s still obscene

How is it obscene?

by Anonymousreply 66January 14, 2022 4:00 AM

Fast food outlets must be hurting! Okay, I passed an In-N-Out Burger in the middle of fucking nowhere on I5, and it had a big sign on the window saying "WE'RE HIRING, $17 AN HOUR TO START AND $22 WITH EXPERIENCE!!!". And this was a was in drought-stricken back end of dirt-farm nowhere.

If fast food franchises are paying that much, no wonder nobody wants to work as a waitress! Far less shit from the customers flipping burgers, and you don't have to grovel for tips.

by Anonymousreply 67January 15, 2022 4:44 AM

Last reliable demographics many fast food places long have relied upon (minority young people) have found they can do far better elsewhere. Door Dash, Uber, and other things often pay better than fast food joints, and give more freedom and control of employment conditions. You also have Amazon and other internet commerce with seemingly insatiable needs for warehouse and delivery persons.

Throw in UPS, FedEx and anyone else dealing with delivery services, and you can see why fast food is in hot competition for employees.

Don't lets get started on all the WFH customer service jobs that have opened up lately as well.

by Anonymousreply 68January 15, 2022 7:02 AM

People are running out of OPTIONS. For real. We are being overtaxed by our government. Like Federal Student Loans. You take out say 27k in loans, you've been paying for eight years, now you owe 33k? Like, how much does it cost to "service" a loan? Seriously. You bet we're "losing money" 🙄

by Anonymousreply 69January 15, 2022 7:14 AM

So, as a salon manager I had a terrible time hiring people back when everything reopened, not only did former employees save money, but they rearranged their lives around spending more prudently- many moved in with family to take care of elderly, or young grads wound up staying instead of leaving the nest. Many former employees demanded they would only come back for prime shifts like Friday and Saturday, and that’s not fair for those that came back full time. I said no.

Yes, there’s an attitude of not wanting to work for under $25 an hour that doesn’t work for commissioned pay positions like hairdressing because there are days that are slow. But curiously because of the shortage my people are making great money, chairs are full all day long and I’m hesitant to hire any more people because their pay would drop and they might quit.

by Anonymousreply 70January 15, 2022 7:57 AM

I hope Target is having problems finding people to work for 15 bucks an hour. I worked there for a few months a couple of years ago, and it was so dehumanizing. They made no bones about the fact that you were a warm body there to do stuff, and nothing more to them. They were Nazi-ish about not conversing with your fellow employees. They really fucked you over with hours. My GOD they fucking suck.

by Anonymousreply 71January 15, 2022 8:42 AM
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