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Home / Finance News / Americans Can’t Keep Up With The Cost Of Living

 

In general, Americans are optimistic about the current state of the U.S. economy. Their confidence is being fed by a dip in unemployment, a staggering drop in gas prices, and an uptick in growth in many sectors. Despite an overall confidence in the economy, most Americans are struggling to keep up with the cost of living and feel as if they are falling farther and farther behind with their personal finances.

Americans’ lack of confidence in their personal financial future can be seen in the results of a recent Pew Research Center study. The study shows that fifty-five percent of Americans feel as if their income is not keeping pace with the cost of living. Essentially, as we reported earlier this week, more than half of Americans are living paycheck to paycheck.  As you might expect, that feeling increases at lower income levels. As the report states:

”Among those with family incomes of less than $30,000, more than twice as many (65 percent) say their incomes are failing to keep pace with living costs.”

Surprisingly though, among higher income earners, say those making in excess of $100,000, 81 percent say their income is barely meeting the yearly increases in the cost of living. Of those studied, elder Americans and those without a college degree reported that their income was not keeping pace the most often.

Are people just feeling a mass hysteria? No. CNN Money reports:

”… that income has stagnated for years: Median income, at $51,939, is roughly where it was in 1995 after inflation.”

The general feeling of uneasiness about income has not gone unnoticed by governments. At a recent World Bank meeting in Switzerland economic disparity was recognized as the number one threat to global stability in the coming decades. Despite knowing this to be true, nothing effective is being done.

Additional Findings

  • Just shy of sixty percent of Americans say jobs are scarce in their community.
  • Twenty percent of American feel that their personal financial situation is poor. On a bright note, though sixty-seven percent believe that their financial situation will improve in 2015.

WARNING: Highly Subjective Opinion Follows

President Obama is attempting to raise the minimum wage and is expounding the virtues of free community college, but what will those programs do? I do not have an economics degree, but common sense tells me that raising the minimum wage will increase the cost of everything minimum wage workers produce, thus increasing the cost of living. Those free community college degrees will flood the job market with qualified candidates, increasing the unemployment rate, forcing those people with degrees to look for minimum wage jobs. To my way of thinking, both are stop-gap measures meant to make an unpopular president look good at the end of his presidency. Economic unrest has been behind the vast majority of revolutions and civil wars in the history of man, so there may not be a real solution on the horizon.

How do you feel about your personal financial situation? Do you feel as if you are being buried by the cost of living? Do you think my opinion stinks? Why not share your thoughts with us in the comment section or on our Facebook page?

 

About the author: Jerry Coffey

 

Jerry Coffey spent many years in a debt-riddled gray area somewhere between broke and desperately broke. His seemingly endless need for more and more cash led him to payday loans, repossessions, bankruptcy, and depression. After years of the same financial style, he heard a piece of advice that inspired him to find a way to change. The advice: ''The very definition of a fool is someone who continues to do the same things, but expects different results.'' This led him to a much more frugal lifestyle that sees all of his bills paid on time and a growing savings account. Even the seed of a retirement account has begun to sprout.

 

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2 Comments

  1. I didn’t realize the median income has been stagnant for almost 10 years. It still seems hard to believe that most Americans are living paycheck to paycheck when we live in such an affluent country. I’m sure many people are not earning enough income, but if this is such a pervasive problem then perhaps the standard of living is also a problem. By this I mean what Americans categorize as needs vs. wants, not just the cost of living. I agree with your economic analysis that those measures will not provide a long-term solution.
    Kalie recently posted…Mindless AusterityMy Profile

  2. We seem to be at the point where wages aren’t going to keep up with costs so we all need to learn additional skills we can market and monetize on the side. For us that meant learning how to make gourmet chocolate candies / treats and selling them each holiday for extra income.

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