Would You Be Able To Afford A Surprise $500 or $1000 Expense? Most Americans Can’t

Robyn Pennacchia | January 6, 2016 - 4:45 pm

A recent survey conducted by conducted by Princeton Survey Research Associates International indicates that 63 percent of Americans say they would be pretty screwed were they to suddenly be handed a surprise $500 or $1000 expense or bill.

According to the survey, only 37 percent of people said they had enough money in their savings to cover such an expense. 23 percent said they’d have to pay for an emergency expense by reducing other expenses, and 15 percent said they’d have to put it on a credit card, and another 15 percent said they’d have to borrow from family or friends. 10 percent didn’t know where they’d get the money from.

In the meantime, another study suggests that the CEO of your company (if you work for a large company), has possibly already earned the equivalent of your entire 2016 salary. According to the most recent figures–from 2014–the average CEO makes 306 times what the average, non-management employee earns–the larger your company, the bigger that gap likely is. Compare this to 1965 when the average CEO only made 20 times what the average, non-management employee made, or even the late ’70s when they were still making less than 30 times more, and you might start to see why people can’t afford a surprise car payment all that easily.

If you ask me, we could solve a lot of the major economic problems facing Americans if it were possible to put a legal limit on how much more a CEO can earn than the average employee. Frankly, we’d all be better off–including the rich people–if everyone had more buying power. If we keep going at this rate, we’re going to get to a point where only the super rich have money to spend, and then how are they even going to make a profit? For all his faults, Henry Ford was smart when he said he wanted to pay his employees enough so that they could afford to buy one of his cars. It’s just too bad that mode of thinking has gone out of style.

[CBS News]
[Washington Post]