About a fifth of Americans have no money tucked away for unexpected costs.
About 21% of working Americans said they aren’t saving any money at all, Bankrate found in a survey. Among those who are saving, a majority are putting away less than 10% of their income.
Over the past several decades, household savings in the US have been trending downward. By the Bureau of Labour Statistics’ measure, Americans were saving 7.6% of disposable income in December. Before the 1980s, that rate had mostly been in the double digits.
For 1/5 of all Americans, roughly 65,140,000 people, there is no leverage for any unexpected financial distresses [1]. This trend, similar to the one in the UK where one in four adults have no savings, approximately 16,510,000 people [2], is a dangerous turn for the global economy when it takes place in two of the most influential nations driving global production.
All this, while the distribution of income has continuously increased in going to those with the most wealth within the United States [3], even though the total income for all persons within the United States continued to grow steadily since the 1990’s [4], and similar has been taking place within the UK [5].
Something needs to be changed, as these are warning signs of an impending recession that will affect the entire world fiscally.
The United States seems likely to have another Recession come up within the next few years, as predicted by Economists based on the long expansion of the economic growth experienced by the US since the 2009 Recession that hurt the economy and that the growth eventually leads to a fall, since economic trends are never a straight line and continually raise and lower [6].
More specifically, the slowing of interest rate growth vs. interest rates is likely to spur the Recession, with one expert stating the likelihood within the coming year of having a recession is up to 30% [7].
Sources
Source 1: https://www.businessinsider.com.au/americans-with-zero-savings-at-20-2019-3
Source 2: https://www.independent.co.uk/news/uk/home-news/british-adults-savings-none-quarter-debt-cost-living-emergencies-survey-results-a8265111.html
Source 3: https://www.pbs.org/newshour/economy/is-increasing-income-inequality-a-myth
Source 4: https://www.statista.com/statistics/216756/us-personal-income/
Source 5: https://www.equalitytrust.org.uk/scale-economic-inequality-uk
Source 6: https://www.cnbc.com/2019/03/13/economy-at-very-real-risk-of-entering-recession-in-late-2020-ucla.html
Source 7: https://www.forbes.com/sites/joshuapollard/2019/03/15/recession-watch-2019-outlook-not-so-good/#4b2688e92fc2