In our daily lives, as anyone who keeps a household budget can attest, the unexpected happens all the time. A refrigerator motor fails. Some part on your car you never realized existed breaks down. A loved one passes away and you have to — you want to — be at the funeral a thousand miles away.
“Unexpected” expenses like these will, sooner or later, hit all of us. But all of us, says new research out of the Federal Reserve, can’t afford them.
In fact, just under 40 percent of Americans, says the Fed’s sixth annual household economics survey, “would have difficulty handling an emergency expense as small as $400.”
A fifth of American adults, the new Fed study adds, had major unexpected medical bills last year. An even larger share of Americans — one quarter — “skipped necessary medical care in 2018 because they were unable to afford the cost.”
Meanwhile, 17 percent of American adults can’t afford to pay all their monthly bills, even if they don’t experience an unexpected expense.
The new Fed report offers no anecdotal color, just waves of carefully collected statistical data. For a sense of what these stats mean in human terms, we need only look around where we live, particularly if we live in one of the many metro areas where inequality is squeezing millions of Americans who once considered themselves solidly “middle class.” Places like the Bay Area in California.
San Francisco, recent research shows, now has more billionaires per capita than any other city in the world. By one reckoning, San Francisco also has the highest cost of living in the world, as all those billionaires — and the rest of the city’s ultra rich — bid up prices on the most desirable local real estate.
But the Bay Area squeeze goes beyond the confines of San Francisco. Nearby Oakland and Berkeley are facing enormous affordable housing shortages as well. The Bay Area as a whole now has more than 30,000 homeless.More ...