Paycheck to paycheck and food stamp to food stamp: Study finds 3 out of 4 Americans are one financial emergency away from being out on the street.

The latest food stamp usage data was released with very little attention from the media.  47.7 million Americans are on food assistance spanning a record 23.1 million families.  Americans on food stamps reflects deep structural issues in the way our economy employs our population.  The recovery in many parts of the US is anything but.  What we are seeing is a growing (and permanent) class of people that will be part of a working (and growing non-working) poor segment of our population.  You would think with the proliferation of information that more opportunities would arise but many people are not keeping up.  There was also a survey showing that 3 out of 4 Americans are basically living paycheck to paycheck with 1 out of 4 living without any savings at all.  You would think this economic dilemma would make headline news but it doesn’t.  Is a paycheck to paycheck and food stamp to food stamp nation worth reporting on?

Food stamp payouts at record levels
I’ve been tracking the nominal amount of money being paid out to food stamp participants and we are at a record level:

Over $70 billion a year is going out in food stamps.  The high elevation of payouts is showing that many people simply cannot get off of this because of the lack of employment or the lack of opportunities in the current marketplace.  A large number on food stamps are also going to the working poor.  Tracking this data shows that the recovery has largely been a no show for a giant section of our population.  Many of these people camp out at dollar stores or Wal-Mart waiting at the end of the month simply to see their debit cards refill so they can purchase food for their family.  The typical payout per family?  $276 per month.
Paycheck to paycheck
Another recent study on the ridiculously low amount of savings for Americans was released:

“(CNN Money) Fewer than one in four Americans have enough money in their savings account to cover at least six months of expenses, enough to help cushion the blow of a job loss, medical emergency or some other unexpected event, according to the survey of 1,000 adults. Meanwhile, 50% of those surveyed have less than a three-month cushion and 27% had no savings at all.”

50 percent have just enough for three months of expenses while another 27 percent are literally living paycheck to paycheck.  One of the main reasons for this lack of savings is the current banking environment we are living in.  There is very little incentive to save when banks are paying nearly zero percent on deposits and CDs:

This is done purposefully.  The Fed is setting up an environment where savers are punished and it should be no surprise that people are not saving because they can’t or simply have very little incentive to do so.  We now find ourselves in an economy where living paycheck to paycheck is very common.  What does that say about the recovery however?
We discussed this market and how it has setup a two-income household trap for many:

The vast majority of Americans have two-income households not because they want to but because of economic necessity.  Over the last few decades with more people working the household income figures have gone up but strip this out and per capita wage growth has actually fallen inflation adjusted for over a decade.
Is this paycheck to food stamp recovery really a recovery?  The Fed has ensured that as long as people have access to insane levels of debt (more directed to the banking system and their speculation) then the wheels will keep on turning.