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"20 Things The Middle Class Can't Afford Anymore"
by Epic Economist
"The U.S. middle class is losing ground financially, and in today's video, we're going to expose a list of things middle-income workers can no longer afford. We're living through the most severe cost of living crisis in history, and Americans are seeing their purchasing power evaporate at a breathtaking speed. Even those who used to have some sense of financial security are now having to make some difficult choices and opt between putting food on their tables, paying utility bills, or seeking medical care. Today, middle-earners do not have the same economic stability their parents had back in the day. They continue to struggle with rising costs of education, entertainment, energy, groceries, and everyday necessities while real wage growth stagnates. With each passing month, living conditions continue to worsen for this group.
Right now, millions of Americans are still struggling to afford a basic middle-class life. Nearly 51 million households don't earn enough to afford a monthly budget that includes housing, food, child care, health care, transportation, and a cell phone, according to a study released Thursday by the United Way ALICE Project. The share of middle-income Americans who say their incomes aren't keeping up with their cost of living has jumped 16 percentage points since December 2020, rising to 75% in June 2022, Primerica found. With tight budgets, middle-class families are having to cut back on their spending on name-brand items. In July alone, retail sales data shows a 28% decline in the purchase of brand name items as middle-income shoppers scramble to afford simple luxuries of life.
The middle-class debt load is growing much faster than their incomes, leaving workers struggling to make ends meet each month. According to a Money-Zine analysis, "back in 1980, the consumer debt per person was $1,540, which was 7.3% of the average household income of $21,100. In 2022, consumer debt climbed to $58,604 per person, which was almost 60% of the average household income of $97,026. This means debt increased nearly 500% faster than income from 1980 through 2022."
Having a financial cushion to fall back on is essential to ensure economic security, but as the cost of living soars, fewer middle-class workers can afford to put some money aside for emergencies. A Bankrate poll found that only one in seven middle-class households have at least six months of emergency savings. Over 25% of them have no emergency savings at all, and the remaining households have a small to moderate amount of savings, but not enough to cover six months of expenses.
In theory, middle-class earners differ from low-income earners because they don’t live paycheck to paycheck. But in reality, over 60% of the U.S. population, or approximately, 157 million adults, are currently living in a hand-to-mouth situation. In other words, middle-class Americans are just as financially burdened as low-income Americans, with around two-thirds, or 67%, unable to cover an unexpected $400 expense. New estimates suggest that around one-quarter of the U.S. population is already spending more than ten percent of their net income on energy. People from households that exceed this ten-per cent threshold are considered to be in the "energy poor" group, experts note. Last year, less than 10% of the population faced energy poverty. But over the past 12 months, the proportion of energy poor has risen by more than fifteen percentage points. Economists observe that high energy prices no longer only burden households with low incomes. This is going to be a very bitter winter for many middle-class families out there. Large swathes of our society are already facing massive amounts of financial pain. But as global events accelerate, it's safe to say that the worst is yet to come."
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