More than half of Americans raking in $100,000 or more are living paycheck to paycheck

Latin american sales woman working at a clothing store checking inventory using a tablet
More higher-income Americans report feeling the pinch.
Hispanolistic/Getty Images

The number of Americans living paycheck to paycheck has almost reached the high levels seen during the onset of the COVID-19 pandemic, during the days of lockdowns, business closings, and mass panic. 

About 64.4%, or 166 million, of U.S. adults reported having no money left over at the end of the month in December 2022—just shy of the 65.7% who reported living paycheck to paycheck in March 2020, according to the latest edition of PYMNTS’ New Reality Check: The Paycheck-to-Paycheck Report.

That’s also about 9.3 million more people who ended 2021 living paycheck to paycheck. But this time, high-income Americans are not immune: Approximately 8 million of those newly scraping-by Americans are from higher income brackets. About 50.8% of those earning over $100,000 reported living paycheck to paycheck in December, according to the PYMNTS’ research. 

The number of high-income Americans living paycheck to paycheck last December was up nine percentage points from the 42% who reported similar struggles in December 2021. In contrast, the share of middle- and lower-income Americans who reported living paycheck to paycheck remained relatively stable over the past year. 

“As rising prices continue to weaken their spending power, however, a growing number of consumers will find it harder to meet their monthly obligations,” the report finds. “High-income consumers are also feeling the financial strain, increasingly joining the ranks of those living paycheck to paycheck in the past year.”

But why are higher-income Americans struggling more now? Persistent high inflation is certainly part of the equation, but a looming recession, high interest rates, volatile financial markets, and white-collar layoffs are also hitting higher-income earners. 

When it comes to inflation, a majority of Americans, 56%, reported price increases were causing financial hardship for their household, according to a Gallup survey published in September. Earlier in the cycle, much of the inflation spikes were concentrated in fuel and used-car prices. And that had more of an effect on Blacks, Hispanics, and middle-class households.

It was middle-income Americans, for example, who experienced the highest rates of inflation in 2021, particularly because of the spike in transportation costs, according to research by the Federal Reserve Bank of New York. But as inflation has permeated into other sectors more heavily—including food and consumer goods—the disproportionate effect on middle-class households has also narrowed.

Despite the high number of Americans struggling to cover their living expenses, consumers are fairly optimistic about their financial futures this year, the PYMNTS’ research finds. About 40% of Americans living paycheck to paycheck expect their incomes to keep up with inflation in 2023, citing raises and additional sources of income. 

Similarly, about four in 10 Americans expect their personal finances to improve this year, up seven percentage points from 33% who reported such optimism in July 2022.

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