Ladies and gentlemen, it is common for economists to advise us to save money. Many times, this sounds like an issue affecting few people, but the reality is that in America, the number of people not saving is significantly highly. According to Sparshott, one of the Wall Street Journal economist, nearly one in every three Americans is saving no money. Besides, the number of the people who set aside some money for future use has reduced from 73% in 2010 to 68% in 2015. Clements, also a Wall Street Journal economist contended that although to some extend savings might slow down the economy in the light of the paradox of thrift, lack of it puts family’s in future financial crisis. People’s bad choices, and economic issues leads to no or reduced savings.
First, the banks interest rates have been low for a long time. One wonders what would be the benefit of banking only to earn a 1% interest rate. In this respect, one’s pig banks and putting the money in the banks do not real differences. Therefore, banks need to revise the interest rates to encourage more people to save. Secondly, some of the banks charge fees on small account owners. Cases of hidden charges or annual account management fees discourage small savers from depositing money with them. From a logical standpoint, it is not only punitive, but also irrational for one to put money in a bank that charges the savings and giving no interest.
Thirdly, wages have stagnated for decades now. According to Bivens, Gould, and Mishel of the Economic Policy Institute in an article published in 2015, USA has suffered from a rising income inequality and the sustained slow economic growth. Gould opined that 2014 marked an extension of thirty-five years of widespread wage stagnation. Living standards of most of the people are low, and that should be a cause for worry. The few Americans make ends up been for survival, and nothing is left to save. In fact, Dayen, a Fiscal Times economist in a 2015 article argued that the wages are not stagnating, but reducing making more people poorer than before. The policies set by the government had tied people concerning minimum hourly wages. In this regard, the role of the governments is significant and measures to raise the minimum wages should be a priority now. One can only save what is surplus after meeting all the basic needs. If one has never had enough to save, then they are condemned to a perpetual economic crisis.
Is the system the only problem? Choices got severe economic consequences. Some American lack the prudence needed to save money. They live today and forget tomorrow. Fottrell, a news editor with the Market Watch, claimed that the problem occurs because a majority of the people cannot imagine future financial needs accurately. If one tells every one of us that in the next one year, we would need $2000 for car repairs, we will save in anticipation of the problem. In this regard, Americans need to be realistic and save money for emergencies.
Ladies and gentlemen, the above propositions indicate what leads to low or no saving and possible ways of addressing the issue. Every person needs to prepare for emergencies because when they strike, they demand a significant amount of cash. Running to creditors or selling property to offset emergency problems puts one into more problems. I believe it is never late to start acting. Thank you. God bless you.
Works cited
Bivens, Josh., Gould, Elise., and Mishel, Lawrence. "Wage Stagnation in Nine Charts." Economic Policy Institute. 6 Jan. 2015. Web. 29 Apr. 2016. <http://www.epi.org/publication/charting-wage-stagnation/>.
Clements, Jonathan. "If You're Not Saving, You're Losing Out." WSJ. 20 Apr. 2014. Web. 30 Apr. 2016. <http://www.wsj.com/articles/SB10001424052702303603904579491784057393534>.
Dayen, David. "For Most Americans, Wages Aren't Just Stagnating - They're Falling." The Fiscal Times. 4 Sept. 2015. Web. 29 Apr. 2016. <http://www.thefiscaltimes.com/Columns/2015/09/04/Most-Americans-Wages-Aren-t- Just-Stagnating-They-re-Falling>.
Fottrell, Quentin. "5 Reasons Americans Are Not Saving Money." MarketWatch. 2015. Web. 29 Apr. 2016. <http://www.marketwatch.com/story/5-reasons-americans-are-not-saving- money-2015-10-09>.
Gould, Elise. "2014 Continues a 35-Year Trend of Broad-Based Wage Stagnation." Economic Policy Institute. 19 Jan. 2015. Web. 29 Apr. 2016.
Sparshott, Jeffrey. "Americans Are Saving More, But for How Much Longer?" WSJ. 30 Mar. 2015. Web. 29 Apr. 2016. <http://blogs.wsj.com/economics/2015/03/30/americans-are- saving-more-but-for-how-much-longer/>.
