"12 Things That AI Says The Middle Class
Won’t Be Able To Afford Soon"
by Michael Snyder
"The middle class in the United States is being systematically destroyed. I know that this may sound like an obvious statement to many of you, but when I first started writing about this more than a decade ago it wasn’t an obvious statement. For years, the middle class was slowly eroding, but now the decline of the middle class has become an avalanche. Even the mainstream media is talking about America’s
“K-shaped economy” these days, and nobody can deny that the poor are steadily getting poorer.
Recently, a reader that has been following my work for many years sent me a very sobering email. I asked him if I could share some of the content of that email in one of my articles, and he gave me permission. He is one of the millions of Americans that is barely scraping by from month to month, and I think that his story will really resonate with most of you…
"My Pickup Insurance went up $17 this month.
My Real Estate Tax went up $187.
I had to get rid of my Landline Phone because I couldn’t afford it anymore.
I drive a 41 year old Pickup with 221,000 miles. I would love to buy a better used Pickup for $7,000 but just don’t have the cash.
Last month I had $17 in my Checking Account when I got my SS Check. The month before that it was $5.
Michael, you have been writing about the vanishing Middle Class. I don’t think there will be a Middle Class in 1 or 2 more years!!! Like I said in a previous email, I don’t know where else I can cut back. And I live a very, very frugal, less materialistic, simple lifestyle compared to the average American. If I didn’t inherit a small farm with a livable house, I would be homeless!!!"
I know that many of you can identify with this. For a very long time, the cost of living has been rising faster than paychecks. Now we have reached a stage where a very large proportion of the population is desperately trying to survive from month to month.
A lot of people out there have cut down to one or two meals a day because reducing food expenses is one of the easiest ways to save money. In fact, one study has found that 2.6 million people that live in New York City
“reported facing food hardships this last year”…"According to an alarming study to be released on Tuesday, 2.6 million New Yorkers in the city reported facing food hardships this last year. “On the worst end, 550,000 New Yorkers actually said that they ran out of food before they had money to buy any more. And to put that in perspective, that’s as if the entire city of Baltimore ran out of food,” Jason Cone with Robin Hood said."
We are not “the land of plenty” anymore. I realize that this is not welcome news, but it is the truth. During a recent interview with Fox News, Jade Warshaw laid out some of the facts that show that we are in the midst of
a very painful cost of living crisis…"We’re in a cost of living crisis, Dana. I think everybody knows it. We speak to more than 18 million Americans every single week on The Ramsey Show and I am hearing firsthand, yes, the price of housing, rent, mortgages, they’re a problem. Obviously, we know that health care has gone up 6%-7%. I spoke to a woman the other day, the price of her health care is going from $400 to $900. Of course, that’s more than 6%-7%. And then of course, we’re finding things like daycare, obviously food, it’s so expensive. The average American, as a result, is going into debt. And we’re seeing more debt on consumers than ever. $103,000 of consumer debt is what Americans are paying, because these big three are still continuing to eat at our wallets: credit cards, student loans, car payments, Dana. It really is a crisis."
So what is our country going to look like as this cost of living crisis continues to intensify? I asked Google AI to tell me some of the things that the middle class would be unable to afford soon, and this is what I was told…
1. Homeownership: The traditional cornerstone of middle-class wealth, owning a home, has become an elusive dream for many, especially in urban and high-demand areas. Skyrocketing home prices, high down payments, and increased mortgage rates have made it so that in many markets, fewer than one in five homes are within reach for typical middle-income households.
2. Higher Education: A college education is increasingly a financial burden, with tuition and expenses soaring. Middle-class families often earn too much to qualify for significant financial aid but not enough to pay out of pocket, leading to massive student debt that can delay other life goals for decades.
3. Retirement Savings: Due to other financial pressures and the shift from pension plans to 401(k)s, many families struggle to save enough for a comfortable retirement. The inability to put away sufficient funds for the future means many may face the prospect of working longer or a reduced standard of living later in life.
4. Healthcare: Even with insurance, the costs of premiums, deductibles, and out-of-pocket expenses for medical care and prescriptions can lead to substantial financial strain, making specialized medical treatments unaffordable for some.
5. Childcare: Quality childcare expenses can rival or exceed college tuition in many areas, forcing many parents (often mothers) to leave the workforce because the cost effectively erases the benefit of a second income.
6. New Cars: The average price of a new car has surged, partly due to advanced technology features becoming standard. This, combined with higher insurance and maintenance costs, means many families are holding onto older vehicles longer or forgoing car ownership altogether.
7. Groceries and Everyday Essentials: Persistent inflation means essentials like food, utilities, and gas are significantly more expensive, stretching paychecks and leading many families to worry about affording daily needs.
8. Comprehensive Insurance Plans: The rising cost of maintaining adequate health, home, and auto insurance coverage is becoming a major concern, potentially leading families to opt for limited coverage and increased financial risk.
9. Leisure and Vacations: Rising costs of living mean that family vacations and leisure activities, considered essential for a balanced life, are becoming luxuries many cannot afford.
10. Personal Fitness and Wellness Services: Personalized services like personal trainers or boutique fitness classes are increasingly seen as luxuries for only the upper class.
11. Organic and Specialty Foods: The higher price tag associated with organic and specialty foods may put these healthier options out of reach for average middle-class budgets.
12. New Technology and Eco-Friendly Upgrades: Keeping up with the latest tech gadgets or investing in eco-friendly home improvements (like solar panels or energy-efficient appliances) often requires a substantial initial investment that can be prohibitive.
I want to say a little bit more about the first item in that list. Soaring prices and high mortgage rates are not the only reasons why home ownership has become so expensive. Insurance rates have been steadily escalating for years, and property taxes have risen to insane levels
in many parts of the country…"The hidden costs of homeownership are reaching nearly $16,000 per year nationwide, underscoring the ongoing affordability crisis crippling potential buyers.
A new analysis from real estate marketplace Zillow and Thumbtack, an online marketplace for local services, found that insurance, maintenance and property tax can cost the average homeowner $15,979 per year. Maintenance costs account for $10,946 of that, while about $2,003 goes toward homeowners insurance and $3,030 toward property taxes, according to the November analysis."
I have a confession to make. I really detest property taxes. In fact, if I could permanently ban property taxes on a nationwide basis, I would do it. All over America, elderly people are being forced out of homes that have been completely paid for because they can no longer afford the property taxes. Do we really own our homes if we have to keep shelling out thousands of dollars a year just for the privilege of continuing to live in them?
Home maintenance has also become an increasingly burdensome expense, but many homeowners are trying to cut corners wherever they can in this very challenging economic environment, and that is having a direct impact
on Home Depot’s bottom line…"The Home Depot is a bellwether for the US economy and housing market. It’s latest quarter isn’t sparking much confidence. On Tuesday morning, the home improvement chain said it served fewer customers in the past three months than expected. Its earnings come as Wall Street hits a concerning stretch of losses. In the past week, all three major stock indexes are in the red as investor confidence in AI begins to slide."
I know that things seem bad now, but what is coming
in 2026 and beyond will be even worse. The employment market is really tightening up, and mass layoffs are happening from coast to coast. According to the Federal Reserve Bank of Cleveland, the number of WARN notices filed during the month of October
was one of the highest ever recorded…"Impending layoff notices across much of the U.S. surged in October, highlighting signs of stress in the job market. Data from the Federal Reserve Bank of Cleveland shows that 39,006 Americans last month in 21 states received a Worker Adjustment and Retraining Notification Act, or WARN, notice informing them of an upcoming layoff. U.S. labor law requires employers to provide these written warnings 60 days ahead of plant closings or mass layoffs.
It represents one of the highest numbers of WARN notices since Federal Reserve Bank of Cleveland researchers started tracking the data in January 2006, although the tally remains below the spikes recorded during the 2008 financial crisis and the 2020 pandemic."
Over the last several years, we have witnessed a steady deterioration of the U.S. economy. But curling up into a fetal position and crying about it isn’t going to help anything. If you understand what is happening, that will help you to make wise decisions. And wise decisions lead to wise actions. The road ahead is going to require all of us to be strong and courageous, because things are starting to move very rapidly now."
