No, 33% of Americans Making $250,000 Are Not Living "Paycheck To paycheck"
The upper-middle class has no idea what living "paycheck-to-paycheck" actually means
The financial media feasts on the inflation narrative.
The latest installment in the inflation gaslighting is this absurd headline from Bloomberg "One-Third of Americans Making $250,000 Live Paycheck-to-Paycheck, Survey Finds."
In this article:
No, 33% of people making $250,000+ are not living paycheck to paycheck
Why these types of surveys tend to deliver unreliable data
Why the $250,000+ income bracket is the least impacted by inflation.
Saying you live paycheck to paycheck does not make it true
First, 33% of the $250,000+ income bracket are not living paycheck to paycheck.
When I see a stat like this, it becomes clear that the upper-middle class has no idea what living paycheck to paycheck actually means.
Living paycheck does NOT include people who only have a little bit of money left after accounting for — an employer-matched 401k contribution, mortgage payment, insurance premiums, contributions to kids' college fund, and making two car payments.
Living paycheck to paycheck is choosing between rent and food with any nutritional value in it. That is not the reality for 33% of those making $250,000 or more.
In fact, if you read the entire Bloomberg piece, they refute their own headline and admit that 33% of homeowners are not living paycheck to paycheck.
Here's the quote that gives away the whole game:
“Living paycheck-to-paycheck doesn’t necessarily mean hardship, and LendingClub makes the distinction between those who can pay their bills easily and those who can’t. Only a fraction of high earners — roughly one in ten — reported issues covering all their household expenses in April, according to the survey.”
So, the real number is 10% — which again is a self-reported number. We can look at 10% as the highest reasonable estimate for those making $250,000 and living struggling to pay their bills.
Surveys like the one mentioned in the Bloomberg article produce really crappy data. Their only real use is capturing the mood of the public — which at the moment is cranky and miserable.
The pandemic made the last two years miserable for everyone, the political discourse is toxic, and the price of everything is higher than before the pandemic. So, if you are conducting a phone interview and ask someone how they are doing, they will likely tell you, "NOT GREAT."
The only useful data we get from this survey is that even those with all the money are in a very bad mood these days.