Precariousness is being in a state of uncertainty, and in a position that is highly likely to fall or collapse.
Economic Precariousness then is a state that many individuals find themselves in when they are living paycheck-to-paycheck or they are in significant debt or burdened by heavy expenses such as medical debts.
The groups experiencing Economic Precariousness in the U.S. are students that are heavily in student loan debt, and / or students that are taking care of children and the elderly. It also includes people who work part-time and / or in the Gig Economy. It includes the elderly who need to work past retirement and who don't have enough savings, and it includes people living paycheck-to-paycheck that have low-paying jobs. It includes people with significant healthcare expenses. This now adds up to a significant portion of the population.
Student loan debt now impacts over 45 million borrowers, households, and families nationwide. How many of those students are taking care of children and the elderly? According to the most recent data from the AARP, an estimated 41.8 million people, or 16.8 percent of the population, currently provides care for an adult over 50.
"Estimates vary widely as to the size of the total gig economy. The Bureau of Labor Statistics believes such “alternative work arrangements” account for 10.1% of the American workforce, while the Federal Reserve pegs the share at nearly a third of American adults."
"Nearly half of senior homeowners answered they plan to work part time or pick up a side job during retirement. Nearly 1 in 5 seniors answered they now plan to work past age 70 and an additional 12% said they plan to work full time for the rest of their lives."
"Nearly two-thirds of Americans, 63%, say they’ve been living paycheck to paycheck since the Covid-19 pandemic hit the U.S. earlier this year. That number has been increasing since March, according to a survey fielded in October of roughly 2,000 U.S. adults by information technology company Highland Solutions."
The problem with Economic Precariousness is that these individuals are one bill away from a disaster in that they can't afford an unexpected emergency or they can't afford to fully take care of their health such as get necessary dental work done or important medical work done. They aren't able to save much of their income if any. Students are putting off important life events such as having kids or getting homes or getting a car which could help them get a better job. Those who do have unexpected expenses are falling into poverty and worse, homelessness. Some are avoiding poverty and homelessness by taking on payday loans or other high-interest loans to help them get by for now. Others are working several part-time jobs and really don't have the time or energy to find other forms of income. Besides health issues and stress related issues, all of this contributes to a reduction in Social Cohesion. Social Cohesion is really important, it's the glue that keeps our communities and economies together. This is how Economic Precariousness affects nearly everyone even if it doesn't seem like it.
One program that is helping a lot is the expanded Child Tax Credit, where families with children are receiving monthly checks. These checks are going into paying off debts, buying groceries, paying rent, and helping in general with everyday expenses. There is a big push to make the CTC permanent, however, Sen. Joe Manchin is currently standing in the way of that push. The new reconciliation bill also aims to expand child care and paid leave, and provide two years of tuition-free community college, which would help, among other provisions. Read more about how the CTC is benefiting families.
Another initiative that would help a lot would be Cancelling Student Debt. That would affect 45 million borrowers but potentially have multiplier effects as well since students are taking care of children and the elderly. Read more about how Cancelling Student Debt would help Students here. Cancelling Student Debt would empower tens of millions of students to have more agency, to be more civically engaged, and to better tackle societies pressing challenges ahead.
The most sure-fire method of tackling Economic Precariousness would be a foundational income floor, or Universal Basic Income. Having a foundational income floor that lifts everyone out of precarious economic conditions would make a big difference. It would stop people falling into poverty, and it would directly alleviate the trends of Economic Precariousness by providing a better cushion. The CTC could be made permanent and expanded further into a UBI, or a new policy could be enacted ensuring UBI if enough citizens advocate for it. The UBI movement is growing by the day, get involved and take action by following this guide.
DIGICEN works to advocate for Digital Economic Inclusion through Universal Basic Income (UBI), Guaranteed Income, CBDCs, and Democracy Tech. Learn more about the Digital Economic Inclusion Innovation Cycle.
Tags: precarity precariousness economic economics economy income students student debt child tax credit ctc social cohesion loans children foundational income floor ubi basic income universal basic income guaranteed income income guarantee elderly citizens retirement paycheck-to-paycheck