With early voting for the midterms underway in many states, affordability is top of mind for most voters. While consumer sentiment on the economy is decidedly negative, the actual data paints a more complicated picture.
Politico reports that many economists believe consumer sentiment doesn’t align with where the economy actually is. Jason Furman, a former economist under the Obama administration, gave a lecture in July at the Federal Reserve Bank of St. Louis, saying public perception of the economy and the actual data have created a feeling of “misery amidst splendor.”
“I don’t want to say it’s all perfect,” Furman lectured. “But ultimately, what you really care about is what you’re buying for your money. And you’re buying better houses, you’re buying better health outcomes, you’re buying more of all of that.”
I don’t know who the “you” is in this scenario, but it sure ain’t me.
“Economists find the word ‘affordability’ almost a nonsensical word,” Betsey Stevenson, a former economic adviser to President Barack Obama and now a professor of public policy at the University of Michigan, told Politico. “You can afford anything. The question is just: What do you have to give up to get it?”
That, my friends, sounds like someone completely out of touch with the working class. A growing number of signs point to a K-shaped economy, where things are going great for those already making a decent income, but only getting worse for those in the lower tax brackets.
According to the Washington Post, home prices are up nearly 60%, rent is up 33%, groceries are up 32%, electricity is up 46%, gas is up 69%, and healthcare is up 20%. These aren’t luxuries; these are essentials. So the idea “you can afford anything” is actually laughable. While consumer spending may look strong, the data alone doesn’t tell the whole story.
When it comes to gas, groceries, and healthcare, the Trump administration’s actions have directly exacerbated those prices. The unnecessary war in Iran has resulted in gas prices dramatically increasing throughout the year, which in turn has caused food prices to increase as groceries are transported via diesel trucks. The Trump administration was adamant about allowing pandemic-era subsidies for insurance provided through the Affordable Care Act, which has seen monthly premiums significantly increase.
My day job puts me around normies, folks who are married, have two kids, and own their homes- all that fun stuff. Listening to them talk about what they’re struggling with, I’ve learned two things can be true: things are getting more expensive, but people still have to buy them.
There’s a reason that more and more people are going into credit card debt to simply buy food. Wages have generally been stagnant for the last decade, but inflation is now greatly outpacing them. American voters seem fairly clear-eyed that any policy to raise wages will likely struggle, with polling showing that policies intended to lower prices are growing in popularity.
The economic uncertainty has also created a general feeling of being stuck. I have several co-workers who want to sell their houses but feel stuck because they don’t know how long it will take to sell and doubt they’ll find something better in a price range they can afford.
This feeling of being stuck also applies to employment. There’s a reason why “job hugging” has become a trend in recent years. I work two jobs. Do I want to? Absolutely not; it’s exhausting. Raises and promotions seem like a thing of the past, and with the job market being abysmal these days, I don’t really have much choice if I want to pay my bills. My experience isn’t uncommon these days; I’ve got teacher friends who are in the same boat.
At least once a week, I think about how absurd it is that it was easier for me to work one job that handled my necessities shortly after graduating from college than it is now with over a decade of professional experience under my belt.
“We’ve seen a really long decline — a steady decline — in the public’s view of the economy and of the government,” Bharat Ramamurti, who served as the deputy director of President Joe Biden’s National Economic Council, told Politico. “I worry that if we ignore those things, we’re not really addressing some of the public’s deeper concerns about the structure of the economy.”
I wish there were an easy fix, but affordability will likely remain an issue no matter which party is in charge.
SEE ALSO:
Millions Of Americans Taking On Credit Card Debt To Pay For Groceries
Nearly Half Of Americans Say They’re Financially Worse Off Than A Year Ago
