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SHED Report Shows Where Households Struggle

Last week, the Board of Governors of the Federal Reserve System released its annual Survey of Household Economics and Decisionmaking (SHED). The report reflects data that the Fed collected in Q4 regarding the overall financial well-being of American households. SHED is a wide-ranging report and covers a number of aspects of Americans’ lives.

This year’s SHED includes an analysis of respondents’ overall financial well-being, income, employment, expenses, banking and credit, housing, higher education and student loans, and retirement and investments.

According to the report, many areas under study remained unchanged between 2023 and 2024, but the survey did report some notable conditions. For example, among households with minor children, the number of respondents who felt “financially ok” dropped by 5% since the last survey. Parents who used childcare services 20 hours or less per week reported paying a median monthly cost of $800. For parents who used childcare services more than 20 hours per week, they reported their median monthly cost as $1,100.

Just to be clear, a median monthly childcare bill of $1,100 per month will consume nearly $19,000 in gross annual earnings. Childcare is wildly expensive, and it’s still hard to come by. Parents are experiencing increasing difficulty with paying for the childcare they need since the COVID-era childcare subsidies and tax breaks have expired.

Respondents reported similar rates of employment in 2024 as they did in 2023. About one-third of respondents reported receiving a raise. Only about two of every fifteen respondents reported that they asked for an increase in their pay. New job starts and pay increases exceeded those respondents reported in 2021.

American workers are still saving, but at a lower rate than they were last year. Thirty-eight percent of respondents reported spending more this year than last year.

SHED data offers blunt assessment of community college degrees

The SHED report gives community colleges the most complete picture of why their enrollments are dropping. It offer more evidence that American households need more money every month than a two-year degree can supply.

Since last year, two-year degree holders notched a 3% decrease in the number of them who reported they were doing “okay financially.” (67%) That’s on top of the 4% decrease they reported in 2023 (70%). It is notable that in the history of the SHED survey, the percentage of people with “some college or an associate degree” has never reached 75%. In other words, 25% or more of people with some college or an associate degree have never reported being “financially ok.”

That’s a pretty clear assessment of the value of community college degrees (and certificates). One out of every four students will never reap enough economic benefit to stabilize their finances, even in a strongly positive job market.

Think about that.

Photo Credit: 401(k) 2012, via Flickr