A staggering 80% of American households are financially worse off than they were before COVID-19
A staggering 80% of American households are financially worse off than they were before COVID-19
Only the richest 20% have held onto their COVID savings.
Is this surprising given stagnant wages and drastic inflation for the last few years straight?
Don't forget about the absolutely massive wealth transfer that happened: https://www.cnbc.com/2023/01/16/richest-1percent-amassed-almost-two-thirds-of-new-wealth-created-since-2020-oxfam.html
That's so strange. So you're saying the entire capitalist system, that funnels value and wealth ever upward, where consolidation has been rampant, oligopolies are the order of the day and some of our "most successful" companies face charges of but then nothing is done about their monopolies, where at these same titans of industry, an even narrower funnel shovels obscene wealth to those with access to the company's equity grants and options, while those who actually provide the work in the company get 2.3% wage increases because wage stagnation must increase until beatings improve, where these same few companies set and increase prices to enrich their own quarterly stock grants while their employees can't get an increase that even matches inflation let alone provides value...
You're saying that this system somehow allows for wealth concentration? /s
I was thinking about it today as I went by a Les Schwab where behind the front desk they proudly offer payment plans for those with good credit in an enormous banner. Why can't Americans afford to buy car tires? Why would they need to exist in a system where interest would need to be paid to be able to fix their common mode of transportation? Why are tire companies opening finance arms to loan usuriously? Why does a mobile telephone take 2 months of salary to afford? Ask GE finance I suppose and Jack Welch.
This isn't inflation. This is greed. Record profits with soul crushing wages. Governments that allow this are complicit. We need heavy windfall taxes
Those are here for the same reason...
People act like inflation is the invisible hand of the market, this is capitalism, companies will charge whatever they want to maximize profits, and that rarely results in a lower price.
Like, if you made thingamajigs, and if you made as many as you could (10 million) and sold as much as you could to saturate the market and end up making 10 million, that's less profit than if you charged $5 a piece and only sold 2 million. Same income, much lower overhead.
So you cut staffing and make 1/5th of what you can because that maximizes profit.
Which is fine until your thingamajig is something that people need like food, water, or shelter. If you're putting profit over production, then people who can't afford it have to go without.
It's literally what's going on with insulin. This is t a hypothetical, this is what's been happening for a long time.
It's just with the same few giant corporations making everything, if just one does, the other 2-4 giant corporations crunch the same numbers and come up with the same plan.
Something that used to be called price fixing is suddenly just "internal analytics"
I could have bought a decent house alone, albeit uncomfortably. But I was happy enough in my condo. Now I have a wife and dual income, and we'd have to really stretch for a shitty house on the outskirts. And neither of our wages have changed much.
Wages are not stagnant.
https://fred.stlouisfed.org/series/LES1252881600Q
You can see rising median wages for several decades. The covid stimuluses caused a bump but cant expect that level of government spending forever.
The advice in that article is primo out of touch and humorous. They give statistics that people's savings and assets are down X amount, and the first advice is save for an emergency. Running out of savings?! Just save more, five head.
I am reminded of that quote along the lines of “it is possible to commit no mistakes and still lose. That is not weakness, that is life.” I did everything right, and had a more than adequate emergency fund.
But then my house vaporized that emergency fund… and only then did COVID happen and I lost my job twice. So that’s roughly three “holy shit thank god we saved for a rainy day” events in three years.
I’m sure I will be in “just save money” mode some day in the future. Lots of shit left to clean up right now though.
and only then did COVID happen and I lost my job twice. So that’s roughly three “holy shit thank god we saved for a rainy day” events in three years.
You just explained the last three years of my life. I have no savings left. Period. If anything happens to the car, or either one of us loses our jobs, we're done. That's it.
If you stop eating Starbucks and drinking avocado toasts, you will be fine
I love that the guy who penned that gold was one of the world's richest people, and not that long ago called for increasing unemployment, so that the worker learns his place again.
Ok, yeah! I’ll just set aside the (checks notes) almost nothing I have left after food, rent, utilities, gas, and my exactly two streaming services.
Now ask the CEOs how they’re doing.
Man, some of them have had to delay that second private jet purchase until next year.
Most of them got richer. So no they did not put off anything.
About $42 trillion in new wealth was created in the first two years of the pandemic. Two-thirds of that has gone to the richest 1% of the world’s people
Mitch McConnell staring off into space - Good thing Americans had those stimulus checks to live off of for the past 30 months.
Speaking of, where did that money come from?
Did they just print it?
Weird how when it comes to helping the working class, taxing the rich is never an option. But when it comes to helping the ruling class, you can tax the working class and print money.
Didn't it just come from taxes. I know they claim there's never any money but there's always money, they just don't to use any of it.
They're always claiming they need to raise taxes but they don't, they just need to spend them. Also possibly maybe they shouldn't give contracts to their chums as backhanders. Maybe then they get better deals.
Fun fact: more money was printed during the pandemic than in the history of the US. And 80+% of it went to the top 1%.
I canceled all our streaming services and Amazon prime. I canceled my phone service and opted for a $15/month plan (Mint). I buy a cheap phone, about $70 bucks. I asked my wife to stop buying me snack foods at the grocery store to save ~$50/week. All told I think we are not spending ~$300/month that I can now put towards our cars that are starting to break down. Someone said something about savings but I only cultivate dust and stones there.
Don't feel like you have to do without just because you're smart enough not to subscribe!
You can stream pretty much anything for free here: https://fmoviesz.to/
Just make sure you have uBlock Origin installed.
Thank you for being a hero
Those 'record corporate profits' seen since 2020 didn't manifest in a vacuum.
I found out my wife was pregnant about a week before shit really hit the fan. We were completely prepared, had money saved up and everything.
The covid hit. We both lost our jobs, and unemployment wasn't nearly enough to cover the bills. I couldn't find another job anywhere.
We lost everything. Both of my cars got repoed, I get eviction notices every single month because rent is behind. We pulled out credit cards for food because we don't qualify for assistance.
Slowly, we both got jobs, I got lucky and jumped right back into my career that I love, and we're still trying to get on our feet. The credit cards are killing us.
Oh, and when our daughter was born, she had to be life flown to another city because she almost passed away (long story). 150k bill. After insurance.
There was an (executive order ?) during covid where you weren't allowed to receive a large bill from medical emergencies and be required to pay it, if you had insurance.
Have you heard of/looked into this?
They could send a bill, but they would call it 'an accident', and then ask if you wanted to pay it out of the kindness of your heart. If you don't, they just write it off on their books and call it a day.
Source: happened to me
Moving forward, do you think you will save up more in an emergency fund than you did previously?
I would say yes, but I am drowning in debt now. Always a month behind which brings late fees which makes things harder to keep up on.
Also, pg&e burnt the town next to us entirely down (today is the anniversary!) and their solution to dealing with all the lawsuits, was to raise everyones utility bills. My bill was $50 to $100 before the fire. Last month it was $400. I haven't been running heat or AC and the app says my energy usage is consistent for my home size.
It's expensive to be poor.
So, is nobody going to mention the picture of two smiling kayakers chosen to accompany this article?
After buying kayaks with their COVID checks, their outdoor gear addiction has spiraled out of control
They are living out of them.
They are part of the 20%
The kayaks probably survived their chapter 7 bankruptcy liquidation. (jk)
I took it as they are going up Shit Stream and are about to lose their paddles. 🤣
Yes, let's raise rent 40% just as people are financially disadvantaged.. That is sustainable.
It was another really good chance for wealth transfers
Increasing the money supply didn't help the poor and instead helped the rich just like every other time we've tried that?! I can't believe it!
Increasing the money supply would have been fine if it had gone into working people's pockets, infrastructure, jobs, housing, and other productive uses. But yeah, when it's just pumped into the stock market or funneled through business via PPP then, go figure, the rich get richer while everyone else suffers.
Not surprising at all.
Corporations made BANK and all the CEOs put it directly into their pockets.
Meanwhile, comparing 2019 with 2023, Elon Musk had an increase in net worth of about 707%. That's a plus of ca. $157.700.000.000. Yes, that's 157,7 billion.
It’s rather negligent of the article to ignore inflation on other areas such as basic needs as well such as price gouging for toilet paper, the immediate war with Russia that suddenly caused gas spikes, and the continuing shrinkflation of basic necessities to be considered ‘luxury’. Bread for the fam shouldn’t be considered a luxury.
rather negligent of the article to ignore inflation
Also, while we note that high prices hurt directly, in major ways the Fed's response to that (it's been raising interest rates to reduce the money supply) is a major source of the pain associated with the high prices/price gouging we're calling inflation.
Higher interest rates mean higher mortgage payments (or rent pressure), etc. This way, price gouging leads to higher profits, and if you hold bonds, also higher profits there- while consumers of those things are doubly-fucked
Over here in the, "no fucking shit" category of news...
People who had the assets got that money.
https://www.weforum.org/agenda/2022/04/economic-inequality-wealth-gap-pandemic/
I didn't find "PPP" in that article, but I'm guessing those loans helped fuel that fire?
Undoubtedly. Many PPP loans were taken fraudulently as well (how many "businesses" do MTG and Matt Gaetz operate exactly?) so that had to have negative repercussions.
"Gee......you f***ing think?" -Me, single income father of three-
I do want to own a home at some point before death, so I've cut back spending across the board. I wouldn't say I'm financially worse off, just working as many double shifts as possible (I work in healthcare, this is easy to do right now...also not a good thing) and not enjoying life at all for....3 continuous years now.
$115k needs to be your annual salary in USD to buy a home right now, supposedly, I read that somewhere (maybe CNN?) in the past 2 weeks. I make nowhere near that.
Factor in inflation on grocery prices & everything else, an mind you I shop at an Aldi's and a wholesale club, it's not a very easy time out there. Sometimes it feels like I'm saving for something totally unrealistic.
That number is very misleading.
That's the average salary needed to afford the average home.
But the average home in Miami or San Francisco is much more expensive than the average home in Wichita. And while prices are inflating everywhere, that does not mean you can't afford a home without earning that much. The only thing that number tells you is that you need to earn more today than you did ten years ago.
I would talk to a bank about what kind of loan you can qualify for, and assume you can afford about half of that. Because they'll absolutely lend you more than you can reasonably afford.
Thanks, you actually accidentally postponed my daily depressive moment in regards to this topic, ha. :)
Don't eat the rich. Their greed is too fattening.
Kill the rich instead.
Compost, grow, consume. Give the earth its tithe.
The implication being that covid-19 is a field wealth redistribution program?
It doesn't make that claim. It's just that if you were wealthy between 2020 and now you can more easily navigate the price hikes by refinancing during the housing boom, sellings off assets, and shifting investments around.
But people in lower incomes don't even have assets/savings to fall back on so they just lose harder when the prices hike.
Actually they are saying that if you were wealthy then you spin that wealth to increase your wealth. Whether that is drastically increasing profits. Using your connections to get free PPP money from the government. Etcetera...
We did not all lose something during Covid. The richest among us got a lot richer, and they continue to do so.
We are not in this boat together.
Yeah. Redistributes from the poorest to the richest.
Uh how is it not higher?
Who are these 20%ers?
I think some people, myself included, managed to stay stable, so that's probably a big chunk of it. I got a new job in June 2020 that was enough of a raise to make up for inflation, so while I'm not ahead of where I was 3 years ago, I was at least in the same mediocre position I started in. That said, I've had $3k in dental bills since July because dental insurance is pretty much a scam, soooo I'm now officially fucked, but I was doing ok.
People like me and my wife. Wife is in healthcare and I am in automation. Wife gets as much overtime as she wants and I got several pay raises as suddenly companies found that they couldn't depend on just buying the same things forever and ran out of workers.
Oh don't worry I am sure the boot is ready to crush us both like a bug. Just ignoring us for the time being.
I may be a 1%er in this context. 49 at the start, had just scored a job paying double salary and benefits both (<-worked hard for this bit, for many years), Habitat for Humanity mortgage (no interest or land taxes), all that.
COVID killed mom (grandma really), got some inheritance, bought a couple of acres of swamp. It's mine and I play there every weekend. Long story, but the land is a big deal in my life.
Went nuts buying stuff I always wanted and couldn't afford before inflation really set in. I wouldn't/couldn't buy most of that stuff at these prices.
And now I'm about to get paid on the last of the inheritance and pay my little house off.
I know this sort of comment isn't welcome, but you asked. Dumb luck mostly, and I recognize that.
And speaking of dumb luck, I'm getting married in 2-weeks to the finest woman I've ever met. (OK. I made a LOT of effort, but still, lots of luck as well) Been with a lot of women, so I've failed a lot, not this time. She's gushing to her Filipina friends ATM. I don't speak Tagalog or I might relate a bit of the conversation, all sounds good though. (Nothing private of course.)
Glad things are going well for you. Best of luck.
Comment is welcome! Don't forget the prenup. Congrats!!
A lot of us in healthcare stayed pretty stable. I don't know of any that did "better", but other than elective stuff, day to day dropped only a little. About 9-10% of Americans are in healthcare. I do know a lot of delivery services did well too.
And we now have the career experience from working Covid front lines combined with the aftermath of the Great Resignation, making us even more in demand. Yeah, I'm also one of the few doing better financially after Covid than before.
So my wife and I are one of them. I'll call it as it is, we got lucky, and both work in tech.
Now that said, I "rent" (rent in quotes because the amount is almost exactly what the increase in food costs was) out a room to a good friend because she was struggling, and just last week got another friend couch surfing for who knows how long until she can get her feet under her.
Who are these 20%ers?
LOL, which income quintile do you think?
Well if your income increased more than inflation you might be fine. For my family this was the case and we have a fixed income mortgage as well so our expenses as a whole have gone up a lot less than inflation. I think this is true for a substantial minority of people.
Spending an extra 8% on groceries just means a bit less to savings? IDK, I kind of feel like the opposite. Economic dooming ahead of an election is as natural as the sunrise, especially when there's a Democrat in office.
That's funny, I thought the fed printed an extra $5 trillion during covid? I wonder where it all could have gone!
I cut my pizza into 100 slices today instead of 8, but I don't feel more full for some reason. Where could all my slices have gone?
They should have been born to billionaire parents. I didn't think it was necessary at the time and was born to average parents, and while I regret my decision, I don't think I have the right to complain.
Maybe average parents shouldn't have had kids to not supply another wage slave to the system?
But the people on the TV said the stock market went up!
I'm going for a couple promotions because I hope they'll help me catch up. But I'm not at all sure I'll catch up even if they work out.
I'm in the same boat. Making more money than last year but I'm still down anyway because my dollar doesn't go very far.
Feels like running to stand still.
I got a nice bump in salary every year, and then my taxes picked up and it's all gone. I literally made 1% more than I did four years ago.
I'm seriously considering jumping ship, as it's the only way to truly increase a salary in my industry.
Seems like the grocery bill alone is enough to eat up any increases in pay.
And it seems crazy that shopping around pays better than staying put but that's usually how it is.
Where are you located? Tax rates are progressive in the US, or are you including a property tax bump or something in your calculation?
And we're cheerleading for our money to be sent to other countries' wars.
there is SO much money, as Levene in Glengarry Glen Ross says, "Just lying on the ground!"
However, we only allow certain people (businesses) to pick it up. We could give it to poor people and let the support of Ukraine continue. But we don't. Because we ideologically have the position that businesses are people, and more important people than people people.
All it takes is the admission that "line go up" could be "line go up a little bit less steeply" and we can do it.
But no, the steepness of the line is more important than anything else.
Or, instead of that, we could spend just want we need to in order to literally defend our own shores and let our people have the abundant, full lives they deserve.
Canada only spends 26 billion a year on their military.
Mexico spends 8 billion.
All we're doing is making a few warmongers rich and coming upw ith excuses to justify it.
Sending money is Israel = completely utterly worthless
Sending money to Ukraine = potentially staving off or preventing WW3
Sending money to Ukraine = potentially staving off or preventing WW3
Also how nearly every war over the past 60 years has been sold to us.
I don't believe it. Anyone who's in a career position has probably been getting a raise the last couple years to combat inflation and retain during the great resignation. I'm sure plenty of people are worse off but 80%? No way
I'm better off, but not by much. I'm working from home now so that helps. I spend less on gas and work clothes (since I'm mostly dressy casual now instead of dress clothes/shoes). I'm also spending less on food because COVID forced me to get serious about meal planning. (Every trip to the store was a possible exposure so I had a big incentive to get everything I needed, and only what I needed, get out, and not return until next week.
That being said, I'm also facing prices that have risen about as fast as my salary - if not faster. I'm also getting to that age where retirement isn't some nebulous future concept. I'm likely going to want to retire in 25 years or so, but I'm not anywhere close to having enough money. Nor can I afford to put away what I should be putting away.
I'm living somewhat comfortably (if frugally) today, but one major medical issue or job loss and I'll be in serious financial difficult. And if things don't improve significantly for me soon, I'll be working until I die.
I know it's hot to blame price hikes rn, and there's some bullshit going on with housing prices, but I'm going to need to see some household budget details before I break out the violin.
I've seen so many otherwise-defined-as-adults make very poor financial decisions for decades. Lifestyle creep is real.
Everyone has a budget they stick to, right? This isn't a years-long delay on an inevitable recession due to tonedeaf revenge spending to counter existential depression, right?
I think the biggest factor is probably the hyper inflationary period we're exiting (have exited?) which many companies used as an excuse to jack up prices much further than they needed to. Anyone who did not receive a raise in the last 24-36 months has effectively received a 10-20% paycut.
I can feel it in my own families finances. I went back to college and now make as much as my wife and I did combined in 2020 while my wife is now a stay at home mom and the money isn't stretching as far as it was in 2020. On the upside my income ceiling is now significantly higher than it was, and my wife wants to start working again once the kids are in school
I'm sure we're all just eating to much avocado toast and eating out too often.
I don't think printing money and handing it out helped. But I'm some sort of pariah for pointing out that it may have something to do with inflation.
I'm surprised more people aren't charmed by the regurgitated WSJ™ propaganalysis and smug victim act.
Evidence shows the government stimulus contributed to only a small portion of the inflation, and the largest portion stemmed from companies using inflation as an excuse to raise prices. I mean, have you looked at individual candy bar prices? They went from under $2 each to over $3 within the last 24 months! Individual soda bottles are getting close to $3 each as well, and don't get me started on the cost of bags of chips. These are discretionary items and treats that saw a significant jump in price very recently that was far larger than inflation. I'm pretty frugal and my regular bi-weekly(ish) grocery bill has grown from ~$70 to ~$110 in the same period, a growth rate about inline with inflation, but when you look at individual items prices you can see a clear predatory "inflation adjustment"
Why has inflation been worse in other developed countries that did not "print money" then?