Tuesday, June 21, 2016

Using the feds' report on economic well-being to inform public policy

In May, the Federal Reserve released Report on the Economic Well-Being of U.S. Households in 2015 (PDF).   The good news:
Sixty-nine percent of respondents said they are either "living comfortably" or "doing okay," up 4 percentage points from 2014 and up 6 percentage points from 2013. Seventy-seven percent of non-retired adults without a disability are confident that they have the skills necessary to get the kind of job that they want now--an increase of 10 percentage points from the 2013 survey results.

And the widely reported (The Secret Shame of Middle-Class Americans, for example) bad news:

Forty-six percent of adults say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money

As troubling as the $400 problem is, consider these results:
  • "Twenty-two percent of respondents experienced a major unexpected medical expense that they had to pay out of pocket in the prior year, and 46 percent of those who say they had a major medical expense report that they currently owe debt from that expense."
  • "Forty-six percent of adults desired additional credit in the prior year, and 40 percent of those who desired credit say that they faced a real or perceived difficulty in accessing credit."
  • "Just 16 percent of young adults (ages 25 to 34) whose parents both have only a high-school degree or less completed a bachelor's degree, whereas 65 percent of young adults with a parent who completed a bachelor's degree have completed one themselves."
  • "Thirty-one percent of non-retired respondents report that they have no retirement savings or pension at all, including 27 percent of non-retired respondents age 60 or older."

All the survey topics―income and savings, economic preparedness, banking and credit, housing and living arrangements, car purchasing and auto lending, education and human capital, education debt and student loans, and retirement―are public policy-related, with local and national implications.

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