Meet America's new hardworking class
A study focusing on mothers shows how lower-middle-income families are adapting to a harsh reality of living paycheck to paycheck.
Several grinding years of recession have scoured many of America's middle class into what one marketing and communications group is classifying as the new hardworking class.
Research from Cramer-Krasselt says this group, with annual incomes of between $30,000 and $50,000, earns too much for government assistance but doesn't want that assistance either.
The study focused on working mothers, who are having to evolve financially and socially as the economy continues through hard times. About three-quarters of the women surveyed were college graduates or had some college education, and a similar number were married. About 60% were either fully employed or had part-time work, while 32% were working as stay-at-home moms.
And while many of these women had worked across a wide spectrum of fields, all felt the recession's effects, with 35% losing jobs and another 35% saying their pay got cut. Nearly one in five went from full-time to part-time work, and one-third reported they started working multiple jobs.
Needless to say, financial security is a huge issue for this group. "Life is paycheck to paycheck," one mother said. "We are stressed constantly because things are getting more and more expensive while my paycheck remains the same."
In fact, 83% of those surveyed say a $1,000 expense would be a major financial hardship, and nearly 40% say they'd have no way to pay for such an economic setback.
That's why these mothers have come up with what Cramer-Krasselt calls living with LESS:
- Live. "Her community is a survival network," the study states. "She relies on it for swapping deals, sharing items, childcare support and feeding her family -- and they rely on her." One such strategy: 72% of respondents share coupons with friends and family members.
- Eat. 88% said they purchase food that can be "stretched" across meals, with such low-cost and filling staples as pasta, rice and ground beef. And 87% say they make an effort to plan meals around what's already in the pantry. But more than half said they'll splurge on certain brand-name foods, rather than a cheaper generic, to preserve some sense of normalcy. "The car may be in the shop, my bills may be late," one respondent said, "but I can still have my Heinz (HNZ) ketchup."
- Spend. 91% say they'll "hibernate" -- stay home and make do with what funds they have -- until their next payday. "When I am able to cook, I try and do a lot of freezing," one mom said. "That way when my hours are cut and I don't have money for groceries, we still have food to eat."
- Shop. 60% said they'll skip certain aisles to avoid impulse buys. And 42% prioritize items and place back the ones that make them go over budget.
Cramer-Krasselt cites U.S. Census Bureau data showing that about half the country has an annual household income of $50,000 or less, a segment of Americans that is growing nearly three times as fast as other income groups.
"We were compelled to investigate this critical segment of women, not only because they are growing in number but because we believe they are a leading indicator for brands of where the broader population is heading," Joan Colletta-Sapp, Cramer-Krasselt's senior vice-president of brand planning, said in a press statement.
"As we got to know them, we were struck by how remarkably resourceful and resilient they are, living a constant balancing act of calculated trade-offs," she added. "Or, as we came to call it, earning a master's degree in 'making it work.' They're proud and independent -- not looking for a handout -- but we feel there is great opportunity for marketers to appreciate (the women's) situation and identify ways to help give (them) a 'hand up.'"
I'll do that for Bush's Baked Beans, real Cheerios, and a few other things where my taste buds say the generic isn't good enough, but most of my purchases are store-brand and even discount-store brand (69 cents/can for condensed vegetable soup at Aldi, etc.) and have done that for years. That's one reason I paid cash for a new car this year.
I'm amazed at the number of people who think the generics are "welfare food" and con themselves out of saving money.
Grow my own herbs: Saves me a lot of money on buying fresh herbs in the produce department whenever I need them for a certain recipe.
Buy in bulk: BJs and CostCo are great for things like toilet paper, paper towels, jars of tomato sauce, pasta, rice, and canned goods.
They still are getting welfare with zero income tax. All the kids I doubt they pay anything at all.
Hmmm..., Interesting observations. The largest expense people are paying for is interest, borrowed from not so eager money holders. Stop buying on credit and pay cash for what you can afford. If you cannot pay cash or trade/barter for it, you do not need it.
It took me a few years to figure this out and in doing so permitted me to retire at 57 years old. My personal income dropped, as did my tax base IRS billed me. By doing this, I no longer pay as much as before, thereby paying less for welfare freeloaders.
I learned to live on what I have coming in and save at least a third of that.
I got tired of carrying entitled people, particularly welfare cheats.
Lessons that parents need to instill in their children.
Yes, I do volunteer work also. As in unpaid.
Single working Dad has been living this way all my life, since poverty as a child. Now my son has his own life, money,decent job and knows how to survive in tough times. BTW these are not 'tough times'. This is sweatless to those of us who've actually been in real poverty as children and adolescents.
This is just a glitch, a trifling challenge. But to those spoiled brats who expect too much it seems like a big deal.
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