As he delved into why it is difficult for young Americans to get by even when working full-time, people had diverse opinions.
The world has been witnessing a massive surge in the cost of living for the past few years. Haven't we all felt concerned as to how our parents had it easy when it came to investing in real estate or businesses, but we struggle to just get through every day despite working full-time. Economist and MBA professor Peter St. Onge (@profstonge), recently posted a video on X (formerly Twitter) that went viral for the right reasons. He addressed the issues faced by most Americans today and people swarmed in the comments section, offering their multifaceted opinions.
His post read, "Half of all American workers now make under $41,000 per year. That comes to $3,400 per month. Given the median rent is $1,978 and the used car payment is $528, that leaves precisely $894 for everything else—food, utilities, medical insurance and premiums, clothes, car repairs, sick kids and that once-a-year dinner out at McDonald's." The economists shared that the problems being talked about widely on the internet as to how the young generations are struggling to get by with their full-time income are real and need a solution. "They grew up in a 4-bedroom house their parents owned, but now they are 40 years old, eating ramen with roommates," said St. Onge.
Speaking of the impacts of inflation, the professor said, "Don't even think of buying a house. The cost of a mortgage on the median house at the moment is nearly $3000, which would consume nearly 90% of the median income," and added, "You would need to shoplift groceries to make that one work." The economists said that the 40-year-old eating ramen with roommates is a representation of millions of young Americans. "Ever since 2000, American productivity has been in free fall, which is actually discussed even by mainstream economists," said St.Onge. The real reason behind such a flailing economy was, according to the professor, "manipulated interest rates" and "soaring government spending."
The economist explained that between 1954 and 1999, the real interest rates were around 2%, but as the 21st century began, the interest rates became -1%. "So those low rates meant easy money flow to garbage businesses that feasted on the cheap money but didn't make the economy grow," he mentioned. St. Onge said that the bureaucrats were the ones who benefitted from 'soaring government spending,' whereas the rest of the Americans were bombarded with regulatory mandates like sustainability or diversity. He emphasized that this economic situation is only speeding up with higher interest rates, more federal spending and upcoming inflation, despite the financial market predicting rate cuts in the future. "If we do not change course, which doesn't look like we are, it will not be stagnation anymore—it will be an outright decline," warned the professor.
The Fed is carrying out a war on our savings. It’s diabolical how much this harms the lower and middle classes.— Kyle Becker (@kylenabecker) November 29, 2023
That's why I laugh when I still hear economists talking about all this 'excess savings' people allegedly have from the pandemic. Most people can't even rent without problems because you need to show 3x the income per month just to look at a place. They are beyond tapped out.— Soltrain😘 (@soltrain69) November 29, 2023
Children will pay a heavy price because both parents will always have to work. One cannot function under $90,000 per year combined income.— Rick Thinking (@rick_thinking) November 29, 2023
This viral video gained over 1.7 million views on X, sparking a huge debate with people pouring in their insights and laments over it. "No one wants to talk about it but home sellers are the problem right now. Not a single one has adjusted to rates doubling," commented @SatyaYugaCinema. "Literally just yesterday spent 30 bucks on breakfast for one person. Huevos rancheros skillet. At a diner," wrote @wazzupwitchoo. "And that's the number before taxes are stolen from paychecks to perpetuate wars and human suffering all over the globe," pointed out @vogel_devin.
Half of all American workers now make under $41,000 per year.— Peter St Onge, Ph.D. (@profstonge) November 29, 2023
That comes to $3,400 per month.
Given the median rent is $1,978 and used car payment is $528, that leaves precisely $894 for everything else -- food, utilities, medical insurance and premiums, clothes, car repairs,… pic.twitter.com/tP0hFsxVPn