Michael R. Strain, Columnist

Americans May Be Strapped, But the Go-To Statistic Is False

It is a myth that a large share of people can’t cover a $400 emergency expense. Why does the story persist?

June 4, 2019 at 9:00 AM EDT

Michael R. Strain is a Bloomberg Opinion columnist. He is director of economic policy studies and Arthur F. Burns Scholar in Political Economy at the American Enterprise Institute. He is the author of “The American Dream Is Not Dead: (But Populism Could Kill It).”

Cash isn’t the only currency.
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A large share of Americans can’t cover a $400 emergency expense: You’ve probably heard politicians and journalists breathlessly report that shocking statistic more than once in the last year or so.

A few recent examples. Senator Kamala Harris, in April of this year: “In America right now today, almost half of Americans are a $400 unexpected expense away from complete upheaval.” Senator Elizabeth Warren last month: “The gap between incomes and costs is so gaping that 40% of Americans can't come up with $400 in an emergency.” And Senator Bernie Sanders, also in May: “Four in 10 [Americans are] unable to afford a $400 emergency expense.”

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