Nearly Half of High-Income Earners Now Live Paycheck to Paycheck

As the pandemic continued to weigh on the economy in the early months of 2022, the United States government reported that in­flation climbed to 7.5% in the past 12 months. These factors are making it harder for consumers in all income brackets to make ends meet.

PYMNTS’ research finds that 64% of consumers lived paycheck to paycheck in January 2022 — up from 61% in December 2021. The share of consumers living paycheck to paycheck has fluctuated in the past 12 months, but the last two months of 2021 witnessed a pronounced uptick. The share of paycheck-to-paycheck consumers is now just two percentage points lower than the high of 66% seen in March 2020.

These are among the surprising findings to emerge from New Reality Check: The Paycheck-to-Paycheck Report, a PYMNTS and LendingClub collaboration. In The Wealth Divide edition, we examine why consumers across different generations live paycheck to paycheck and what they see as the most prominent stressors on their finances. The report draws on insights from a survey of 2,633 U.S. consumers conducted from Jan. 11 to Jan. 18, 2022, as well as an analysis of other economic data.

More key findings from the study include:

• Forty-eight percent of consumers earning more than $100,000 per year lived paycheck to paycheck in January 2022, representing a six percentage point increase from December 2021. The share of those who earn between $50,000 and $100,000 who report living pay­check to paycheck also is on the rise. In January 2022, 67% reported living pay­check to paycheck — up from 66% in December 2021. The share of those earning less than $50,000 and living paycheck to paycheck remained the same from De­cember 2021 to January 2022 at 77%.

• The difference in savings levels between consumers living paycheck to paycheck with issues paying their bills and those without issues widens among lower-income consumers. Declared savings among consumers with incomes more than $100,000 living paycheck to paycheck are nearly identical among those with issues paying their bills ($11,168) and those without ($12,881). Consumers earning $50,000 to $100,000 per year and living paycheck to paycheck with issues paying bills reported an average savings of $2,360, compared to $7,273 for those without issues. Those earning less than $50,000 per year living paycheck to paycheck with issues paying their bills had an average savings of $788, compared to $4,369 for those without issues.

• One-quarter of high-income consumers who live paycheck to paycheck with issues paying their bills say they would not be able to pay a $400 emergency expense. This share increases among those with lower incomes. When asked how they would pay a $400 emergency expense, 43% of consumers living paycheck to paycheck who struggle to pay their bills each month say they would not be able to pay. Among consumers who earn more than $100,000, 23% who live paycheck to paycheck with issues paying their bills say they would not be able to pay a $400 emergency expense. Fifty-two percent of those who earn less than $50,000 and 38% of those earning $50,000 to $100,000 say they would not be able to pay a $400 expense.

To learn more about how paycheck-to-paycheck consumers of different income brackets are faring in today’s changing economic times, download the report.