Jan 26, 2022 - Economy & Business

Poll: Savings shrivel for lower-income workers

Source: Morning Consult/Axios Inequality Index; Chart: Axios Visuals
Source: Morning Consult/Axios Inequality Index; Chart: Axios Visuals

Families with lower incomes are seeing their financial cushions eroded as we get further away from pandemic-era government support.

Driving the news: About 40% of adults earning less than $50,000 per year said in January that their savings wouldn't cover one month of expenses — that's up from 32% who said so last month, and 28% the month before.

Why it matters: The growing financial vulnerability among lower earners is one aspect of widening inequality between income groups in the U.S., as measured by the Morning Consult/Axios Inequality Index.

How it works: The index measures whether economic inequality is rising or declining — as opposed to providing a snapshot of the distribution of income or wealth.

  • The headline index ticked up in December, indicating that inequality widened, for the third month in a row.

The bottom line: Economic hardships presented by rapid inflation and the Omicron variant have been experienced differently across income groups.

  • For lower-income Americans, price increases have outpaced wage gains in most industries.
  • Coupled with the removal of many government support programs, and savings drawdowns around the holidays, this led to a deterioration of household balance sheets among the most vulnerable, says John Leer, Morning Consult chief economist.
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