Shutdown threatens millions living paycheck to paycheck
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A growing number of Americans are living paycheck to paycheck, just as the social safety net beneath them grows weaker.
The big picture: The current economy leaves little room for low-income Americans to lose out on those checks, given the domino effect that threatens their housing, food, and medical care.
Driving the news: The federal government shutdown led 658,000 civilian employees to miss out on their first full paychecks on Friday.
- The average federal worker makes more than the average U.S. worker, but many are still struggling financially.
As of May 2025, 41% of households with direct or indirect federal government employment that had experienced a job loss this year were food insecure, according to a joint study from the Capital Area Food Bank and NORC at the University of Chicago.
- That's more than double the rate of food insecurity for similar households who did not experience a loss of employment (17%), and higher than the general population (36%).
By the numbers: It's not just federal workers, though: About 40% of Americans reported having no spare savings and living paycheck to paycheck, per a report out this month from Goldman Sachs.
- That's up from 31% in 1997, the researchers said.
- Goldman Sachs projects that the number will rise to 55% by 2033 and 65% by 2043.
Nearly one-fourth of Americans have zero emergency savings, an August study from Bankrate found.
- And more than half of the U.S. is effectively "one crisis away from homelessness," according to the U.S. Interagency Council on Homelessness.
What they're saying: Preston Cherry, a certified financial planner, told Axios that for those living paycheck to paycheck, "missing even one" can bring them much closer to eviction and homelessness, especially if they've already missed a payment.
- "You incur late fees, which compound very quickly," he said. "For those already in catch-up mode, missing a check exacerbates things."
- Around 42% of renters incur another late fee the month immediately following their first late fee, a Consumer Financial Protection Bureau study found early this year.
- On-time rent collections have been on the decline since April 2023, according to market research firm Chandan Economics.
Leo Aquino, a financial coach at Queer & Trans Wealth, told Axios that these workers might might skip medical appointments to cut costs "even when they have insurance — because the possible treatments and medications required are so expensive."
- "Without a financial safety net, any unexpected expense, like a minor fender bender or taking an Uber ride in the rain because their bus or train stops running, can plunge them deeper into debt," they said.
Between the lines: The current economy is causing strain for low-income Americans, even if the broader picture remains ambiguous.
- Even before the shutdown, President Trump's tax bill cut SNAP benefits for thousands. Those benefits are now set to go dark for about 42 million Americans on Nov. 1.
- Increases in rent have been outpacing increases in income for years, and the number of rent-burdened households — those spending more than 30% of their income on rent — has reached record highs, according to a 2024 study from Harvard's Joint Center for Housing Studies.
The bottom line: Inflation may not be "high like early COVID," Cherry said, but it's "still higher than what's historically normal, impacting groceries, all insurances — from health to rental to car — things that affect low-income people directly and every day."
