Jeff Swope was burning with rage after learning his landlord had raised his two-bedroom rent to $2,075 a month by more than 30 percent.
Jeff Swope, a 42-year-old teacher, and his wife Amanda Green, who is a nurse, have a combined income of $125,000 a year, but they can’t afford such a sharp rent increase. The family of three not only has to pay rent, but also student loans, car loans, utility bills, and various other expenses. “It’s like boiling a frog in warm water, I think it’s a little bit hard, but not too hard, there’s something brewing all the time,” Jeff Swope said. Jen
Dewey-Osborne, 35, lives in suburban Phoenix. Calculating her student loans is the worst thing about her. She and her husband knew they were luckier than most because they both had good jobs, but they still felt tight and couldn’t imagine the cost of raising a child. “It’s exhausting morally, physically, emotionally,” she said. “There are no right choices, and it seems like all choices are wrong.”
Omar Abdullah, 26, after failing to buy a house for the twelfth , the anger value reached its peak, and he realized that it was easier for his parents’ generation to achieve financial stability than he and his wife. The young couple had good careers after graduating from college, but the $90,000 they had saved was still not enough in front of the house they wanted, because the seller’s asking price was much higher than the bank’s loan amount.
After decades of stagnant income growth and sluggish price increases, middle-class American families have stagnated, but soaring inflation in the wake of the pandemic has felt the pain firsthand. At first, they thought the pandemic would present an opportunity to improve their financial situation: The service industry cut millions of workers, but they still have jobs; companies can’t find workers, so their wages rise faster; highest value.
But now, they increasingly suspect that the so-called “financial security” is just an illusion. Their bank deposits have indeed increased, but in the United States, the evaluation standard of the middle class is not only how much money they earn, but also what they can buy with the money, and more importantly, whether they can easily afford the “three big mountains”-housing , healthcare and higher education.
Follow the rules and get nothing
In 2021 alone, U.S. house prices will surge by 20%, and prices will rise by 8.5%. The price of basic goods and services in the CPI was $3,500 higher than the previous year. In contrast, hourly wages adjusted for inflation fell by 2.7%. This economic pressure has made it increasingly difficult for many who consider themselves middle class to afford the “three mountains,” especially housing. According to the University of Michigan consumer survey, in March 2022, the willingness to spend in the United States fell to the lowest level since 2011, and many households believe that their financial situation will reach the worst level since May 1980.
”The golden rule we believe in is work hard, pay your bills on time, and you’ll get rewarded, but those goals are getting harder and harder to achieve,” said Daniel Barrera, 36, a flight attendant in Albuquerque, New Mexico. His father already owned a house and several children at his age. Daniel Barrera and his partner earn about $69,000 a year, but he’s always felt cash-strapped. “No matter what job I do, no matter how hard I try, I just can’t seem to have a home of my own,” Barrera said.
The American middle class today is mostly Daniel Barrera’s age, even if they earn more money than their parents, even if they have a college degree and job options, even if they have a permanent home, iPhones and tablets, TVs , but many feel that they are living by the rules without being financially secure.
Since 2001, the median household income in the United States has only increased by 9%, but college tuition and fees have increased by 64%, and out-of-pocket medical expenses have almost doubled. On the surface, the U.S. economy is now booming, but as Jeff Swope said, “boiling frogs in warm water”, many middle-class people realize that warm water has become hot water, and they are about to go bankrupt.
”This volcano didn’t erupt for no reason,” said Richard Reeves, director of the Middle Class Futures Initiative at the Brookings Institution. “In a way, we’re seeing some long-term changes in the economy. , such as slow salary increases and downward mobility. The economic pressures take a while to build up — and now the volcano is erupting.”
Over the past few decades, the cost of the “three big mountains” has skyrocketed, but most of the dissatisfaction among Americans comes from housing, which is usually the largest household expenditure. With the exception of a brief dip between 2007 and 2009, U.S. home prices have been climbing steadily for decades, peaking in 2021, with few exceptions across the country. But in many places, it is harder for renters than homebuyers. In 2021, rents in some states will increase by nearly 30% and continue to rise.
Medical costs have generally risen faster than inflation over the past two decades as rising care costs and an aging population have led to increased demand for services. In 1980, the per capita medical expenditure in the United States was $2,968 after deducting inflation; by 2020, this figure has tripled. The pandemic has exacerbated these challenges, as many have lost their jobs and corresponding health insurance.
In addition, rising college tuition and a sharp drop in federal funding for public colleges have made the mountain of higher education more expensive, with more and more students taking on loans. In 2020, inflation-adjusted U.S. student loan debt averaged $36,635, about double what it was in 1990. For decades, American families have struggled to pay off their student loans. When Amanda Green went to a private university to study nursing, she thought she chose a bright future with a difference, but by 2022, she was still saddled with $99,000 in debt, and her two older sisters who did not go to college. Debt free.
number one threat
Daniel Varela’s father, Barrera Sr., does not understand why his children are struggling financially. He came to Albuquerque in 1984 to work as a porter for $5.40 an hour. He didn’t have a college degree, but he was slowly promoted in the company, bought a house and had children. The couple now own nine properties in New Mexico.
Daniel Barrera thinks it is difficult to join the middle class, and the father-son relationship is also affected.
Varela Sr. had a pension, which is no longer the case for jobs like porters. He admits that prices are now higher than when he bought the house. He’s also surprised how hard it is to find a home maintenance worker who charges $12 to $15 an hour. “Not just my kids, but other kids, they don’t want to work,” he said.
Daniel Barrera hates work. He has worked in the airline industry for a long time and has successfully promoted and raised his salary, but he still cannot afford a house. With each wage increase, health care and other costs also rise, he said.
Daniel Barrera, Jeff Swope and others blame their woes on the wealthiest, who have amassed wealth through investments that are taxed at far lower rates than wages.
Pervasive discontent and a shrinking middle class have historically been associated with political upheaval, a time of extreme economic inequality in which the rich oppressed the poor and the poor sought to seize the wealth of the rich, leading to violence and revolution. Ganesh Sitharaman, a law professor at Vanderbilt University, said that because of the existence of the middle class, the United States has avoided such conflicts. Therefore, he believes that “the biggest threat facing the American government today is the collapse of the middle class.” .