More Than Half of Americans Cannot Afford Necessities
On paper, it looks like the economy is doing great, but your lived experience tells you otherwise. You are not the only person who is struggling financially, even though the social media influencers and multilevel marketers who stand to make money off of your loneliness and insecurity would like you to think that you are. On paper, the unemployment rate is only 4.2 percent, but 60 percent of Americans, most of whom have at least one job, do not earn enough money to pay for necessities such as rent, utilities, groceries, and utilities. They find themselves sinking deeper into debt with each passing pay period and resorting to ever more expensive financial products as a source of stopgap funding as their financial situation grows more desperate. The problem is bigger than any individual worker or household, and there are no simple solutions, but if you need a financial reset, contact a Philadelphia debt relief lawyer.
The Plight of the Functionally Unemployed
According to the Ludwig Institute for Shared Economic Prosperity (LISEP), the unemployment rate does not tell the whole story about the economic wellbeing of the working public. A new report by LISEP says that 24 percent of working age Americans are functionally unemployed. This means that they work but do not earn a living wage. The quarter of the population that LISEP counts as functionally unemployed is a heterogeneous group. You might be functionally unemployed if one of the following scenarios applies to you:
- You work full time but earn little more than the minimum wage. In Pennsylvania, the minimum wage is $7.25, the same as the federal minimum wage, which has not increased in more than a decade. It is not nearly enough to make ends meet in Philadelphia.
- You have a part time job, but the hours are inconsistent from one week to the next. In addition to not getting employer-provided health insurance, you can not know from one pay period to the next whether you will earn enough to pay your bills, so you must supplement your income with freelance gigs with a flexible schedule, such as rideshare driving.
- Your employer has classified you as an independent contractor, so you get a 1099 at tax time and have to pay your Medicare and Social Security taxes out of your own take home pay instead of your employer withholding them for you. The tax rate for 1099 income is about 30 percent.
The fact that so many others are struggling financially, like you are, might be a consolation, but it is not a solution to your financial stress. Until that better paying job comes along or lawmakers enact more consumer-friendly policies go into effect, you are stuck consolidating your debt or negotiating with your creditors to buy time or reduce the repayment amount.
Contact CONSUMERLAWPA.com About Getting Out of Debt While Functionally Unemployed
A Philadelphia consumer law attorney can help you if you are struggling with debt despite working constantly. Contact CONSUMERLAWPA.com to set up a free, confidential consultation.
Sources:
cbsnews.com/news/cost-of-living-income-quality-of-life/
dol.gov/agencies/whd/minimum-wage/state
