ACNeilsen, the world’s leading marketing information company, reports that Americans once again rank near the top of global ratings when it comes to being strapped for cash (see the story below). The rating company can’t exactly figure out why Americans are so strapped for cash, but note that Americans don’t like to over spend and actually try to follow budgets. So what is the problem then? The answer is simple: Americans are strapped for cash because of the difficulty of making ends meet on minimum wage jobs.

Just ask the Barringer Family of Scioto County Ohio why they have no spare change. As reported in the Cleveland Plain Dealer, the adults in the Barringer family of Scioto County, work five minimum wage jobs to raise three children in a rural part of the state. Even with five jobs they still can’t make ends meet. Where is the American Dream in that?

With Focus on Scraping By, Americans Forego Life’s Little Luxuries

In a Time of ‘’No Spare Cash'’, Focus on Paying Off Debt and Building Savings

SCHAUMBURG, Ill.–Sept. 13, 2006–Americans continue to rank near the very top when it comes to being strapped for cash, according to a new ACNielsen study of consumers in 40 markets worldwide. Nearly one-quarter (22 percent) of U.S. respondents said that once they have covered their basic living expenses, they have no money left over. There is a bright
spot: for the first time since the study began in 2004, the U.S. has lost its usual top spot among countries whose consumers have no cash to spare.

The findings are from the ACNielsen Online Consumer Confidence Study, a twice-yearly global survey that gauges consumers’ confidence in the economy, spending and saving patterns, and major concerns. This survey marks the fourth in the series, the first of which was conducted in October 2004.

The percentage of American consumers who say they have no spare cash remains the same from the last survey, conducted in November 2005, after dropping from 28 percent in the May 2005 survey.

The survey also showed that Americans say they tend to funnel what spare cash they do have into savings or debt relief, rather than new clothes or expensive technology purchases. Paying off debts was claimed as the top use of spare cash (41 percent), with putting money into savings close behind at 38 percent.

“While Americans are notorious for overspending and building debt, these findings show a desire for financial responsibility when it comes to discretionary income,” said John J. Lewis, President & CEO, ACNielsen U.S. “Perhaps because the idea of living from paycheck to paycheck is so prevalent, consumers who have a little extra cash would rather use it to shore up their finances than spend it right away.”

This attitude makes an impact when it comes to consumers’ purchases of expensive items. Americans rank second from last when it comes to spending their extra cash on new technology, with only 17 percent saying that’s where their money goes. U.S. consumers also rank in the bottom ten of all markets surveyed when it comes to spending spare cash on new clothes (26 percent) and vacations (25 percent).

“Clearly the rising cost of energy, particularly gasoline, and a slowing housing market are having a negative impact on the US consumer’s purchasing attitudes,” noted Lewis. “Whether this attitude will ever actually materialize in hard economic terms is yet to be seen.”

The ACNielsen Online Consumer Confidence Survey is the largest global survey of its kind, which gauges consumers’ confidence levels, spending habits/intentions and current major concerns. The survey, which took place in June 2006 over the Internet, polled 21,779 respondents in 40 markets: Australia, Austria, Belgium, Canada, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, India, Indonesia, Ireland, Italy, Japan, Korea, Latvia, Lithuania, Malaysia, Netherlands, New Zealand,
Norway, Philippines, Poland, Portugal, Russia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Kingdom, United States, Czechoslovakia, Hungary, and Vietnam.

Approaching Labor Day tomorrow, what do we know about the American economy and the future of work? What type of labor market do we face, who has a job and who doesn’t? Where are the best jobs and where have the best jobs gone? For whom does work pay the rich or the poor? How are people managing in a world of increasing economic insecurity? With an economy sporting the lowest job recovery rate since the recession of 1949 how are Americans making ends meet? Sunday morning’s headlines provide some of the answers.

Jobless recovery

“There are just 3.5 percent more jobs than at the end of the last recession. That is less than half the lowest of the nine previous moves — a gain of 7.6 percent in the period after the 1953-54 recession. And that figure was held down by the fact that another recession, in 1957-58, had taken place by then.” Floyd Norris, New York Times

Work is in services

“The share of employment represented by private-sector goods-producing industries fell by more than half, to less than 17 percent from more than 37 percent. Employment in that sector peaked at 25.2 million people in 1979. Now it is 22.4 million, even though total employment is up 50 percent since 1979.” Mary Williams Walsh. New York Times

Work still pays for some of the rich

“The census report, for instance, showed strong income growth last year only at the 95th percentile of the distribution, which covers families making $166,000 a year. Even at the 90th percentile, as well as the 50th and further down, according to the Labor Department, pay increases have trailed inflation over the last three years.” David Leonhardt , New York Times

Women are working men are increasingly not working

“Women are more likely to be in the labor force than they were 20 years ago, but men in the prime working ages of 20 to 54 are less likely to have jobs. But perhaps the most notable trend is that men and women are both much more likely to keep working than were their parents in what used to be known as the golden years.” Floyd Norris, New York Times

Americans are deeply in debt

“As a result, debt payments now consume 19.4 percent of the income of the average American family, and 23 percent of the families in the bottom two-fifths of families by income devote at least 40 percent of their income to debt payments.

Household debt rose to 132 percent of disposable income last year, partly because many Americans have pushed their credit card debt to the max and because many, including many high-income Americans, have piled on the mortgage debt. Last year, for the first time since the Depression, the personal savings rate for the nation fell below zero, meaning that Americans are spending more than they are earning (and are saving no money on a net basis). “Steve Greenhouse, New York Times