Nearly 40% of U.S. households said they faced serious financial dificulties in recent months of the Covid-19 pandemic, citing problems such as paying utility bills or credit card debt, according to a recent poll. About one-fifth have depleted all of their savings. U.S. households are struggling in many ways over a year into the coronavirus pan-demic, according to the poll conducted by the Harvard T.H. Chan School of Public Health, the Robert Wood John-son Foundation and National Public Radio. Nearly 60% of house-holds earning less than $50,000 a year reported facing serious financial challenges in recent months. Of those, 30% lost all of their savings, according to the poll.Close to 40% of U.S. Households Say They Face Financial Difficulties as Covid-19 Pandemic Continues, Wall Street Journal 10-15-21
For America is a rich country that treats many of its workers remarkably badly. Wages are often low; adjusted for inflation, the typical male worker earned virtually no more in 2019 than his counterpart did 40 years earlier. Hours are long: America is a “no-vacation nation,” offering far less time off than other advanced countries. Work is also unstable, with many low-wage workers — and nonwhite workers in particular — subject to unpredictable fluctuations in working hours that can wreak havoc on family life.Paul Krugman, The Revolt of the American Worker 10-24-21 NYTs
Okay, what am I missing? Is my math that bad? How do so many struggling Americans end up accelerating spending?
Earlier in the pandemic, people compensated for the loss of many services by buying stuff instead. People who couldn’t eat out remodeled their kitchens. People who couldn’t go to gyms bought home exercise equipment. The result was an astonishing surge in purchases of everything from household appliances to consumer electronics. Early this year real spending on durable goods was more than 30 percent above prepandemic levels, and it’s still very high.Paul Krugman, The Revolt of the American Worker 10-24-21 NYTs
“Is my math that bad?”
There is obviously a difference between average and median, and now Krugman is talking about the “typical” male worker. What the heck is that?
We weren’t “equal” to begin with, and Covid didn’t affect everyone equally. “Ya can’t tell the players without a scorecard!”
Obviously, the ones who used up their savings were not the same as those who had no savings to begin with. There are companies, as well as individuals, who earned much more during the pandemic than before, offsetting those who lost jobs or income. Now we apparently have a conundrum where “fewer new jobs were created” than expected… While record numbers of employees are resigning?
We were fortunately retired, so income not affected. We did spend more money locally to support our favorite restaurants (stimulus helped us there)
On one trip to our favorite restaurant, the owner asked me to take a box of food. A cardboard box about 18x18x18. Fresh vegetables, and ham, etc. I told him we didn’t qualify for subsidies. He said it was a gov. program to help citizens —and— farmers. Win/win. Yes, I took it. It was very good. I’m sure we will pay for it later.
Thanks for the visual. I have often remarked that averages are deceiving. One quip is did you hear about the 6+ foot tall Texian who drowned in a stream with an average depth of 3 feet.
It is important to remember why Paul Krugman won the Nobel prize. in economics – it wasn’t based on his knowledge of the domestic, US economy where he is far, far out of the mainstream. His Nobel prize was for merging the concepts of economies of scale in production of goods with geography. To quote the prize award:
“… Krugman’s approach is based on the premise that many goods and services can be produced more cheaply in long series, a concept generally known as economies of scale. Meanwhile, consumers demand a varied supply of goods. As a result, small-scale production for a local market is replaced by large-scale production for the world market, where firms with similar products compete with one another. …”
OUR PROBLEM is that he has a platform and a bull horn in the New York Times. So people read his crap. Someone should write to the NYT editor and tell them we prefer Krugman stick with what he knows, lest he corrupt thinking by others.
Want to suggest you read an article in today’s WSJ titled: “What Colin Powell Learned From His Own Story
Anyone can go as far as his talents will take him—only in America.” Chris Davis notes, and I quote:
“… What people could learn from his book was that “we live in a remarkable country where ordinary people of whatever background or origin can do extraordinary things. We sometimes forget it. And there are some places in our country and some groups in our country where that faith may be shaken.” Powell recounted a luncheon exchange he witnessed between President Reagan and Singapore’s Prime Minister Lee Kuan Yew. Reagan was commenting on how immigrant kids did so well when they came to the U.S.—they enter the school system and immediately flourish, especially Asian kids. In passing, Reagan said to Lee, “I wonder what would happen if American youngsters were dropped into a foreign country, would you see the same sort of acceleration and performance?” Powell called Lee Kuan Yew’s answer “unique.” “Mr. President,” he said, “you don’t understand. It’s not reversible. There is no other place where you can take a foreigner and plop them in and”—Powell smacked the tabletop for effect—“five years later out pops an American of hyphenated background who can go as far as his talents will take him. It can’t happen anywhere else. …”
Idiots like Krugman, Sanders, Warren, Sandy Cortez, Schumer, Pelosi, Biden and others would destroy opportunity with their “equity” and “help”:and “hand out” proposals – taking from some to give to others.
Excellent. Worthy of a post.
The richest 10% hold 76% of the wealth
BTW…what exactly is the ” the socialist agenda”?
Is it Social Security, Medicare, public schools, bank deposit insurance or is it just anything that helps people?
So what? Explain to us how the accumulated wealth by the likes of Gates or Zuckerberg harm anyone or block opportunity or take from others. The agenda is simply a broad array of programs pro ported to be free or paid for by government, but is neither. Child care, free college, loan forgiveness, etc. it’s an agenda that creates a society when from start to finish society is dependent on government…no matter who is in office. IMO it can also leads to mediocrity. But if that’s what Americans want, so be it, just don’t be fooled by the idea it can be provided by only 1% of citizens paying much higher taxes. It means everyone pays for the promises as is the case in every country with strong social programs. Helps people is good, let’s focus on helping those in need, but does that include child tax credit checks to families earning $300,000 a year? SS and Medicare, well established and necessary, but have you noticed for decades Congress has mismanaged them, their funding is way inadequate and nobody wants to tell the truth about paying for them.
There isn’t a labor shortage not because the “socialist agenda” in power is supplementing their sloth with the unimaginable sum (since discontinued) of $300 a week to sit home an eat Bon-Bons while watching TV during the pandemic but rather because people want a fair days pay for a fair days work. A shortage of truck drivers? Raise the pay and there will be surplus of willing & qualified truckers.
“John Deere could give every single employee a $20/hr raise and still net nearly $3,000,000,000 per year in profit. This is why their workers are on strike.”
” For those wondering: All these numbers came using Net Profit from http://macrotrends.net for each company’s previous year ending 6/30/21 or most recent 12 month reporting.”
“Half of Net Profit / number of employees / 2080 hours a year”
Food riots? You don’t need food if you die because you couldn’t afford health care. https://news.harvard.edu/gazette/story/2009/09/new-study-finds-45000-deaths-annually-linked-to-lack-of-health-coverage/
So on one hand people are struggling, but on the other they don’t take jobs because the pay is not what they want? At the same time spending has been rising and one report today concludes workers are in no hurry to work because they are flush with cash. Which is it. I remember when if you needed a job you took one, because you couldn’t afford not to. By the way the Deere settlement the Union accepted and workers rejected looked pretty good with a built in COLA. Keep in mind that a pay raise has far higher costs than just the actual pay.
How about these Deere Union benefits. Don’t they count, not to mention added retirement benefits. Compensation is more than hourly pay. “We also know that our employees’ careers cannot be measured by their wages alone. Benefits like healthcare are vitally important and valuable to them. Through our negotiations, we agreed that our production and maintenance employees would retain precisely the same industry-leading healthcare benefits. They will continue to have $0 in deductibles, $0 in premiums, and $0 in co-insurance over the life of the contract. Their co-payments will not change one penny.
While healthcare costs are expected to rise from $12 to $17 per hour for John Deere over the contract term, employee healthcare costs will not go up.”
Quinn, while I agree wealth is not zero sum, I would argue your assertion “ So what? Explain to us how the accumulated wealth by the likes of Gates or Zuckerberg harm anyone or block opportunity or take from others.” is incorrect. The people like Gates and Zuckerberg spend hundreds of millions of dollars in the political arena to block opportunity of those who would compete against them, and otherwise buy their agenda regardless of what it costs the public.
Socialist agenda is no privately own property. Government will tell you what you want and will give you what you need. Everybody is “equal” other than the elite party members. You will become dependent on the government welfare or it’s “generosity”. Free Everything For Everybody. If you believe in this, then let me have your money, your car and your house. After all, it is all of “ours” not yours.
And who cares who owns what. I own a 50 year old canoe instead of a new yacht. I didn’t earn a yacht so why would I deny anyone who did the work and took the risks a boat of their dreams. I was just a worker bee and not an innovator or a business genius. In fact, I had my shot at being a supervisor in the corporate world and I hated it. So, I built a satisfying life on what I could earn and did quite well. I even retired early because I saved my money and planned for my future. But I earned it. I was not depending on the collective to prop me up or depend on the labor of others to feed and house me. My house is painted in many colors and not just gray cinder block.
Social Security, Medicare, and bank deposit insurance were originally all “insurances”. But Social Security and Medicare have changed due Congress messing with the programs from “benefits” to “entitlements” paying out more than they collect in fees (taxes). Bank deposit insurance is still insurance and the payouts are capped.
Public education is a function of a government to ensure an educated workforce is available for business to survive. In America, you have a choice of where to send your kinds to school. Public education is the school of last resort for those who don’t want to pay for schools. I am not talking about expensive private schools. Many large cities had Catholic schools for over 100 years educating children from modest families. It used to be the US public schools taught critical thinking and welcomed the freedom of speech and free exchanged of ideas. In the corporate world this is called brainstorming. That has changed. Our educational system is more like socialist and communist countries where you are indoctrinated to the party ideals. We are erasing history because it is unpleasant or doesn’t fit the narrative. Dissenting opinions will get you a failing grade. Feelings are more important than your freedoms. (I have personal experiences with the schools issues.)
If you really want to know what is going on in America, read several foreign countries news websites. They do not have a stake in the USA and are not bound by USA mainstream media bias. When the foreign press starts asking who is really in change of the Biden White House, Americans should be very worried.
I didn’t mean to rant but I hope I answered your question. I apologize if it seems like I am attacking you but I am not. I just wish people would do their own research into world history and see what a dark path the world is on.
I question these results too. I have no doubt that some low wage earners or cash based gig earners had great difficulty.
However, I thought from prior surveys that Americans didn’t have savings and emergency funds so how did they use up their savings? But Americans managed to save more money during the pandemic than before the pandemic too.
If these Americans are so poor and broke, why is there a labor shortage? If I was broke, I would be taking the first job I could get just to eat. There is a great disconnect now between labor and government welfare during the pandemic. I haven’t seen one report of starvation in the street with millions of unfilled jobs and billions paid for people to stay home.
I believe that none of this is to help the people who need help but to continue pushing the socialist agenda. In the summer of 2020, I didn’t see a single food riot.
“Wages are often low; adjusted for inflation, the typical male worker earned virtually no more in 2019 than his counterpart did 40 years earlier.”
Why should they be any higher?