Income inequality in the United States is growing, but the most common economic statistics hide a significant portion of Americans’ financial instability by drawing on annual aggregates of income and spending. Annual numbers can hide fluctuations that determine whether families have trouble paying bills or making important investments at a given moment. The lack of access to stable, predictable cash flows is the hard-to-see source of much of today’s economic insecurity.
We Tracked Every Dollar 235 U.S. Households Spent for a Year, and Found Widespread Financial Vulnerability
Salary data masks the true extent of the problem.
April 12, 2017
Summary.
Income inequality in the United States is growing, but the most common economic statistics hide a significant portion of Americans’ financial instability by drawing on annual aggregates of income and spending. Annual numbers can hide fluctuations that determine whether families have trouble paying bills or making important investments at a given moment. The lack of access to stable, predictable cash flows is the hard-to-see source of much of today’s economic insecurity. Researchers analyzed data from the U.S. Financial Diaries (USFD), which collects detailed cash flow data for American households. The major finding was that the households’ incomes were highly unstable – even for those with full-time work. And monthly spending was just as volatile as income. The challenge for a growing number of Americans is that they have insufficient ways to cope with these ups and downs.