If you wonder why consumers who have jobs are nonetheless timid about spending freely in this period of high unemployment, consider the findings of The Economist/YouGov polling conducted this month. Respondents who are employed (or self-employed) were asked how long it would take for them to exhaust their savings if they lost their job. Thirty-three percent said they “don’t have any savings,” while another 20 percent said they’d have enough to hold out “a few weeks.” Twenty-five percent would have enough to last “a few months,” 9 percent “a year” and 13 percent “more than a year.” If the bad news is that many consumers are one pink slip away from financial disaster, the (relatively) good news is that many of them are at least aware of their peril.
The poll found 45 percent of employed respondents in the under-$40,000 income bracket saying they don’t have any savings. What might be more surprising is that 32 percent of the $40,000-100,000 cohort and 21 percent of the $100,000-plusers said the same. Even in the $100,000-plus group, a non-landslide 28 percent said their savings would last more than a year if their job disappeared.
Despite signs that the recession has technically ended, people don’t expect this to be reflected in their own household income any time soon. Asked how they think their “total family income” will have changed (if at all) six months from now, 17 percent said they expect it to be higher. But 19 percent think it’ll be lower, with the rest expecting it to stay about as is.
There wasn’t much variation from one income cohort to the next in the percentage of respondents who think their family earnings will be higher in six months. But those in the under-$40,000 bracket were the most likely to think their income will be lower then (22 percent), while the $100,000-plusers were the least likely to feel that way (13 percent, with the $40,000-100,000s splitting the difference at 17 percent).
All of those numbers look worse when viewed in the dreary light of another of the same survey’s findings: 49 percent of the under-$40,000s said they’re “worse off financially than you were a year ago,” as did 42 percent of the $40,000-100,000s and 37 percent of the $100,000-plusers.