The Edmond Sun

Business

March 24, 2014

Poor aren't alone in living check to check

When you hear the term "paycheck to paycheck," you probably think of low-income households struggling to make ends meet. That's even the title of a new HBO documentary highlighting the plight of America's working poor.

But a paper released at the Brookings Institution's Brookings Panel on Economic Activity conference Friday finds that a sizable number of wealthier households are living paycheck to paycheck, too.

"The Wealthy Hand-to-Mouth," by economists at Princeton and New York University, finds that roughly one-third of American households — 38 million — are living a paycheck-to-paycheck existence. These are families who hold little to no liquid wealth in cash, savings accounts or checking accounts.

But the paper also finds that two-thirds of these households are not actually poor; although they resemble poor families in their lack of liquid wealth, they own substantial holdings ($50,000, on average) in illiquid assets. Because this money is locked up in things such as their houses, cars and retirement accounts, they can't easily access it when times get tough.

Demographically speaking, the wealthy hand-to-mouth are older, more educated and have substantially higher incomes than their poor counterparts. Perhaps the most striking difference: Although the poor hand-to-mouth tend to stay that way for long periods of time, wealthy hand-to-mouth status is transient, lasting an average of 2 1/2 years.

There is an important policy consideration here: Economic stimulus programs typically target the poor, because they are the most likely to immediately spend cash windfalls on necessities that they otherwise would be unable to buy. But this study implies that wealthier hand-to-mouth households, because they face similar monthly constraints on spending, would also respond positively to economic stimulus.

The paper concludes that "in order to maximize the aggregate consumption response to fiscal stimulus payments, the payments should feature more moderate phasing out with household income."

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  • A Q&A on ‘Obamacare’ Court Rulings

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    Q: I’m confused. What did the courts rule today?
    A: A three-judge panel of the U.S. Court of Appeals circuit in Washington, D.C., decided that the government can’t provide tax subsidies for Affordable Care Act plans purchased in 36 states where the federal government is operating the health insurance exchange. Oklahoma is one of the 36 states. A few hours later, the U.S. Court of Appeals circuit in Richmond, Va., issued a conflicting ruling that upheld the legality of the health-care law’s tax subsidies.

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    The unemployment rate in June dropped to 4.5 percent, its lowest ratio in six years. June’s rate was down a percentage point from 4.6 percent in May and April, according to the Oklahoma Employment Security Commission.

    July 22, 2014

  • UCO campus 3.jpg University of Central Oklahoma recognized as having friendly work environment

    The Chronicle of Higher Education named the University of Central Oklahoma as one of the “2014 Great Colleges to Work For.” Central is the only higher education institution in the state recognized on the list and one of only a handful of institutions in the nation given the distinction of being named to the Honor Roll for being cited most often among all the recognition categories.          
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  • Council approves funds toward ADA update

    City Council members have approved a $398,800 professional services contract with Accessology, a McKinney, Texas, firm, to establish an Americans With Disabilities Act transition plan for the city.
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    Accessology was selected out of a pool of five finalists by a five-member committee to create Edmond’s plan. The firm will partner with Kimley-Horn and Associates, a design consulting firm located in North Carolina.
    Edmond’s last ADA transition plan was created in 1992.

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  • Panel approves jail services agreement

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    The current annual agreement expired June 30. It provides the feeding, care, housing and upkeep of said prisoners. Edmond uses the county jail when the city jail is at capacity.
    The sheriff’s office proposed a slight increase from $46.25 to a $46.50 daily rate per prisoner. City staff said the current agreement is working satisfactorily and believe the proposed rate is reasonable. The new agreement took effect July 1. The city can hold prisoners in its current jail  up to 10 days; a new jail with 10 male and five female cells will be available inside the new Public Safety Center next year when the facility opens.

    July 21, 2014

  • Panel establishes 911 phone rate

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    Governments must also through the Association of Central Oklahoma Governments notify the appropriate incumbent local exchange carrier and competitive local exchange carrier phone companies by Sept. 1, 2015.
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    July 21, 2014

  • Council approves $2.5M extra for utility

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    Steffen and Farrow Orthodontics recently had a ribbon cutting at its Edmond location, 1601 S. Boulevard, to celebrate its 40th anniversary.

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