Pay Bills

More than half of households struggle to pay their bills

As of April 2020, the Census Bureau, in conjunction with several other official statistical agencies, has been conducting a bi-weekly people’s material well-being survey called the Household pulse survey. He asks questions about employment, income, food availability, mortgage and rent status, health, and ease of paying bills, among others. There are a lot of things in these surveys, but for now I want to take a look at a few things: how hard people are paying their bills and where the money is coming from.

There were several “waves” of this survey, and response rates and questions varied among them, making longer-term comparisons difficult. In most of what follows, I will be looking primarily at the responses since May 2021. I will say that in the months leading up to May, households have found it to be progressively a little easier to get by than they are. did it last summer. For example, in August and September 2020, around 44% of households reported having no difficulty paying their bills. This dropped to around 50% in May 2021. The share describing it as “very difficult” has dropped from around 14% to 10%. The share of saving, depleting credit cards or borrowing from friends and family has declined.

Everything started to change in May. The graph below shows the changes in the experience of households paying their bills since then. In May (monthly survey average), 49.9% of households declared that they had no difficulty paying their bills. At the start of October, it fell to 47.7%, a drop of 2.2 points. The share reporting it “a little difficult” increased slightly, and those reporting it “a little difficult” increased a little more – but those reporting it “very difficult” fell from 10.4% to 12.2%. Combine “a little” and “very” and it goes from 26.6% to 28.6%. These aren’t massive changes, but they’re not what you would expect in a time when employment grew by 2.6 million jobs.

And, as the following graph shows, there are worrying changes in where the money comes from. There has been an increase in the number of people reporting “regularly, as before the pandemic”, which you would expect in a period of increasing employment. But there has also been a growing reliance on borrowing, asset liquidation, and government aid (other than unemployment insurance, which has been drastically reduced, and stimulus payments, which are a fading memory). It’s nice that government help is there, but given the cheesy nature of the US welfare state, there usually isn’t much.

These aren’t huge changes – a few percentage points (although each percentage point change represents about 2.5 million adults). But most of them are in the wrong direction.

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