The Pain of the Second Missed Paycheck

[babylonsister]

https://www.theatlantic.com/politics/archive/2019/01/government-workers-will-soon-miss-their-second-paycheck/581110/

The Pain of the Second Missed Paycheck
As the government shutdown drags on, workers’ hardship grows—and soon could become a political break point.
Andrew Kragie
6:00 AM ET

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A second missed paycheck doesn’t just double the hardship imposed by a single skipped payday. Marty Reid, a certified financial planner in Charlotte, North Carolina, said that while people should keep an emergency fund with enough cash to cover at least three months of essential expenses, most families don’t have that level of reserves, even if they’re not typically living paycheck to paycheck. “Even with households that have higher incomes, oftentimes they simply don’t have the cash reserve that they should,” he said. The publicity surrounding the shutdown means creditors are likely to allow postponed payments for mortgages or auto loans. A typical family may struggle with more than a single missed paycheck, tapping into retirement savings—but that means they lose out on long-term growth and risk taxes as high as 50 percent on withdrawals, Reid warned. He added that the shutdown’s timing could accelerate interest penalties for families who put holiday purchases on their credit cards.

Food banks are gearing up for an increased need. Food for Others, a Northern Virginia nonprofit, started seeing more and more new faces ahead of the first missed payday, on January 11. “We started receiving phone calls and inquiries from households needing food toward the end of the second week in January,” said Annie Turner, the organization’s executive director, in an email. “We anticipate those numbers to keep growing as more paychecks are missed.” The food bank, which kept a count of clients with government IDs, said the shutdown caused a 7 percent jump in demand in the first three weeks of this year.

Food pantries far beyond the Washington area are seeing federal workers as first-time clients. A furloughed fed went to Just Food in Lawrence, Kansas, for free groceries; the woman decided to use her unexpected free time to volunteer with the organization, said Elizabeth Keever, the executive director. The food bank is serving about six to 10 new clients a day because of the shutdown, Keever said, including at least one TSA agent. The nonprofit has already exceeded its January food budget, and she anticipates more need the longer the shutdown continues. “We’re going to see more and more as the second round of no-checks come in,” she said.

Perhaps the second no-pay payday will be a tipping point for centrist members of the Senate, which has largely stayed on the sidelines during the battle between Trump and House Speaker Nancy Pelosi. The chamber is scheduled to vote on two bills Thursday: the president’s package, which temporarily protects some undocumented immigrants in exchange for wall funding, and a short-term spending bill that would fund the government for about three weeks. Folded into the GOP proposal is a provision that Democrats find toxic, which would require Central American children to apply for asylum from within their home countries.

Neither proposal has much chance of getting the 60 required votes, but the two bills could provide a starting point for negotiations in the Senate, where members have more independence from their party leaders than in the House. As Trump and Pelosi fight over the State of the Union address, a second missed paycheck for thousands of constituents won’t change the political calculus overnight, but it might increase the pressure on senators to come up with a compromise.

[Crutchez_CuiBono]

1. We've gotten away from saving our money.

Even if it's a few dollars a week at low wage jobs. Immediate gratification seems to be the theme in the last few decades. It sucks saving money, but, in the end, you'll be glad you did. Nobody is going to save you/us, but ourselves. (W a little help from Democrats.)
Hang on America.

[Joe941]

2. You aren't wrong.

I said the same thing and my post was banned. lol. Anyway I'd encourage everyone to save a little from each paycheck. I've certainly reevaluated my finances and realize I need to save a little bit more so I could weather this type of thing longer if it hit me. Right now I could only survive like 2 months.

[Crutchez_CuiBono]

5. Sorry to hear that.

2 months is a good start Joe. Welcome to DU.

[SoCalDem]

3. When "ordinary folks" were "given" credits cards

back in the 70's & 80's it started a dangerous trend..

Prior to that only "certain" people got credit...

Not surprising to me, was that was the same time frame when defined benefit pensions were transformed into defined contribution and then 401k, and then most pensions went away completely....and of course raises mostly went away too..

The perfect storm...

give people easy credit..no raises...increasing costs...

..

[Crutchez_CuiBono]

4. I remember my first credit card.

It was glorious. I charged something (tv) and paid it off. While watching the tv after work, heh heh. Made a big difference in my families life.

[crazycatlady]

6. I do save a lot of my money

However, wages have not gone up like the cost of other necessities (housing, health care, food, utilities, transportation) has.

[Crutchez_CuiBono]

7. God so true.

Me too. Low expectations in life helps too.

[Hermit-The-Prog]

8. once upon a time

Before the Reaganites, it wasn't uncommon for a single earner to support a household.

Alas, unions have been trashed, CEOs have been glorified, and "outsourcing" has been encouraged to support ever more riches at the top of the pyramid.

[Crutchez_CuiBono]

9. I remember supporting an entire household.

On 8 hours a day. W weekends off (Thanks Unions!)