Doing Okay

Each autumn the Federal Reserve surveys tens of thousands of adults and asks them, among other things, to describe their own finances. The marquee result is reassuringly steady: in most years, roughly three in four say they are at least doing okay. It is the kind of number that fits in a headline and closes a debate.

But a headline is a single line in a much longer ledger. Read down the columns — by age, by schooling, by where people live — and the steady average splits into very different lives. Some households sailed through the past decade with a thickening cushion. Others have spent it one $400 emergency away from trouble. This is that ledger, line by line.

The flat-looking average hides a violent few years. Ask people not how they are doing, but whether they are worse off than they were twelve months ago, and the calm gives way to a whipsaw — the clearest fever chart of the pandemic economy the survey produces.

Why did a burst of inflation hurt so much? Because the cushion underneath many households was thin to begin with. Two of the survey’s questions measure that cushion directly: whether a person holds three months of emergency savings, and whether they could cover a sudden $400 expense with cash on hand.

And the cushion is not distributed by luck. The single sharpest dividing line in the whole survey is education. Sort the emergency-savings question by schooling and the national average dissolves into two almost separate countries.

Some gaps close on their own; others simply persist. Owning a bank account is now nearly universal — about 94% of adults, essentially unchanged since 2015. Yet the small group on the outside has stayed stubbornly the same size, and it is not random who they are.