34 Percent of Workers Have One Week or Less of Savings
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Many people are living paycheck to paycheck, on the edge of disaster as highlighted in a new Monster Poll that reveals 34 Percent of Workers Have One Week or Less of Savings.
Over a one week period beginning July 6 and running through July 13, more than 16,000 visitors to Monster.com participated in the Monster Meter Poll question “If you were laid off without severance, how long would your savings cover your living expenses?”
- One Week or Less: 34%
- 2-4 Weeks: 16%
- 1-2 Months: 16%
- 3-5 Months: 14%
- 6 Months or Longer: 20%
Creating three broad groups, 50% have less than a month of savings, while only 20% have 6 months or more. The remaining 30% are in between. Although the Monster Poll is not scientific, I cannot help thinking it is reasonably accurate.
The implications on the savings rate are obvious: It will continue to rise.
Those out of work may wish to consider Monster's Layoff Survival Kit that contains a few worthwhile albeit mostly obvious tips for people to follow.
Monster's Is Starting Your Own Business the Answer? was disappointing. The odds of success even in good times are not very high, something the article failed to address.
Certainly the odds of success in starting a business right now are much worse than in normal times. And for those down to their last few months of cash, the odds of success approach zero unless one has the proverbial rich uncle willing to provide cash for a large number of years. Banks certainly are not lending to startups with no cash. Heck, banks are tightening lending standards even for those who do have significant skin in the game.
Charts Show Grim Employment Stats
The jobs picture is grim, unemployment is likely to rise through 2010, and up to 1.5 million workers are expected to lose unemployment benefits by the end of the year. For a discussion and some interesting chart on expiring benefits, please see Weekly Unemployment Claims Portend Disaster.
I expect unemployment benefits will be extended a third time, but living on unemployment benefits is far different than living on a normal paycheck. Moreover, many jobs are gone and will never come back. Few are prepared for that grim likelihood.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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