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'Easy peasy': Economists say workers should budget an extra $5,200, get a reality check

As Americans struggle to make ends meet, two Bloomberg economists made a suggestion that seemed completely out of touch with the reality on the ground.

'Easy peasy': Economists say workers should budget an extra $5,200, get a reality check
Image Source: (Background): Yulia Reznikov / Getty Images (Top) Ben Winck / INSIDER (Bottom) @JoshuaPotash / Twitter

According to Bloomberg economists Andrew Husby and Anna Wong, American workers should budget an additional $5,200 over the next year to keep up with rising prices across the country. Unfortunately, as inflation grips the United States economy, it will be those in low-income households who are most affected. The casual tone in which Husby and Wong made the suggestion has alarmed working-class Americans already struggling to make ends meet. Twitter users responded to the impossible suggestion with sarcastic reactions and hilarious memes, Bored Panda reports.



 

The economists stated in their widely shared article, "Accelerated depletion of savings will increase the urgency for those staying on the sidelines to join the labor force, and the resulting increase in labor supply will likely dampen wage growth."

Isabella Weber, a professor of economics at the University of Massachusetts Amherst, addressed why prices seem to be on the rise. "What we have seen is that profits are skyrocketing, which means that companies have increased prices by more than cost," she explained. "In the earnings reports, companies have bragged about how they have managed to be ahead of the inflation curve, how they have managed to jack up prices more than their costs, and as a result have delivered these record profits."



 

Ultimately, it's the working class that will bear the brunt of these rising prices. So the suggestion to save an additional $5,200 seemed absurd to many. One Twitter user responded, "Should that come out of my caviar budget, or should I downsize my yacht? Maybe cancel my third Monaco trip?" Meanwhile, another offered a different recommendation: "American businesses should budget an increase in annual pay of every employee of at least $10,400 to cover the increase in prices they are gouging and profiting from."



 

Harking back to the running joke about how cutting back on takeaway coffee could make a big difference, one person tweeted, "Easy peasy. I’ll just cut out my $5,000 latte habit." Another sarcastically asked, "Do they think 'budget' means 'conjure money with your magic wand?'" Yet another Twitter user asked, "So, they are admitting we should all get a check for this amount from the government?" Evidently, folks were upset about just how out of touch economists seemed to be with the reality on the ground.



 

According to a recent survey conducted by the personal finance website Bankrate, 51% of Americans have less than three months worth of emergency savings. The COVID-19 pandemic had left thousands without work and worse off than before. In response, the United States government has not done enough to cushion the working class. This is especially true for low wage earners from racial minority groups. While people on Twitter had a good laugh about Husby and Wong's recommendation, it should serve as a reminder to those building economic policy that a financial crisis is looming.



 

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