Out of Reach: What the Middle Class Can No Longer Afford

In the heart of America's bustling towns and serene suburbs, lies economic tension and anxiety. The middle class—a demographic traditionally viewed as the economic backbone of the nation—faces an unprecedented erosion of its financial stability. What was once seen as a viable stepping stone to the American dream has become a fleeting fantasy. The implications are profound, as the staples once considered quintessential elements of the American Dream slip quietly beyond the reach of millions. Today, we explore the growing list of what has become distressingly unaffordable for the middle class.

This article is presented by the Middle Class Party, committed to forging a united America through practical solutions and collective solidarity. Our mission is straightforward: to bridge societal divides and empower the backbone of our nation—everyday Americans. This piece aims to illustrate how the America we cherish is at risk of fading into obscurity, and why it is imperative for the middle class to unite and advocate for common-sense reforms for the betterment of our country.

Home Ownership

Owning a home, once the hallmark of middle-class success and stability, has become a distant dream for many. It doesn’t matter if you reside in a major city or rural suburb, real estate prices have soared while wages have stagnated. Add in higher interest rates and more expensive loan repayments, and you have a perfect storm. The result? A disparity that prevents new homeownership while putting a financial strain on those struggling to pay their current monthly mortgage payments. This isn’t a mere economic blip but a transformation of the entire country.

According to Redfin data the median house price has jumped 40% in the past four years to a near-record high of over $420,000, which means that homes are simply unaffordable in 99% of the US for average Americans. This has caused Treasury Secretary Janet Yellen to remark that it's almost impossible for first-time buyers to own a home.

Financial planning and prudent saving, once the path to homeownership, is no longer possible for the middle class.

Eating Out

Dining out at restaurants has become increasingly out of reach for the middle class. A substantial increase in restaurant prices due to the rising costs of wholesale food has caused restaurants to hike their prices. According to the January 2024 Consumer Price Index data, the price of food consumed at restaurants is up 5.1% year over year. If you thought it was cheaper to eat out last year, you are right. Food prices are up 8.2% compared to January of 2023.

The 2024 Restaurant TrendWatch report reveals that 60% of surveyed consumers are choosing fast food over casual dining to enjoy more affordable burgers. Similarly, 55% of respondents are opting for frozen pizza or fast-food tacos instead of restaurant alternatives.

The result?

The customer now pays more for less. This has led many to alter their dining habits, with more people choosing to eat at home.

Higher Education

Higher education, especially from esteemed institutions like Ivy League schools or out-of-state colleges, is regarded as a pathway to a high paying career and a better future. However, the price of this education has soared to unprecedented levels.

Data shows that public four-year undergraduate programs have an average out-of-state tuition of $26,382, compared to just $9,212 per year for in-state students. This stark disparity means that out-of-state tuition can be more than double, and sometimes triple, the cost paid by those attending within their home state.

Tuition fees have escalated dramatically over the years, significantly outstripping both inflation and average wage increases. A college degree could cost the average student $260,000 and that doesn’t include room, board, and other expenses like textbooks Securing an education at these elevated costs presents a formidable challenge without considerable scholarships or financial aid, which are often difficult to obtain.

College, once the bedrock of a successful middle class future, is quickly becoming a luxury good.

Cars

According to Kelley Blue Book, the average cost of a new car in 2024 is over $47,000. This is an all-time high for new car prices, the result of higher manufacturing costs and increased demand in the wake of the COVID-19 pandemic. However, middle-class salaries in the U.S. aren’t rising at the same rate. USA Today reported that the average income was around $59,384, just a little more than the price of a new car.

In the next five years, the middle class will be priced out of popular models such as GMC Yukons, Jeep Wranglers, and the Chevrolet Silverado.

Car Insurance

It isn’t enough to be able to afford a car, you need to be able to insure it. This is no easy task as the price of car insurance is up more than 22 percent over the same time last year. This is the largest increase since 1976. According to the Consumer Price Index reports, overall car insurance rates have surged by more than 38 percent since January 2020.

This situation puts many middle-class individuals in a difficult position. They require a car for commuting to work, yet the escalating costs of car ownership may render it unaffordable.

Medical Debt

Medical debt arises from costs and expenses related to healthcare, including ambulance services or doctor visits. Unlike other forms of debt, medical debt is typically incurred unintentionally and without fault, often resulting from unforeseen medical issues or emergencies.

And it is a major burden on the middle class.

Medical debt affects 100 million American adults, with half of all bankruptcies in the United States being tied to medical issues. The average family with medical debt owed $18,660 in 2021, which was a 50 percent increase from five years earlier. Even having health insurance is no guarantee of financial protection, with two-thirds of adults under 65 with health coverage having problems paying off medical bills.

And who has the highest rates of medical debt?

The middle class.

In 2021, seventeen percent of middle-class households, with annual incomes ranging from $43,700 to $160,800, reported having medical debt. This compares to 15.3 percent of low-income households and 9.8 percent of high-income households, highlighting a significant financial burden on the middle class.

Enough Is Enough

The middle class, once the emblem of American prosperity, now faces a reality where the basic tenets of a secure life are increasingly "out of reach." Addressing this crisis requires not only acknowledgment but also immediate and sustained action.

It is time for policymakers, business leaders, and communities to come together in a concerted effort to address these issues that are driving the middle class to extinction. Only through collaborative effort can we hope to restore the promise of the middle class. The Middle Class Party remains committed to advocating for these changes, fostering dialogue, and pushing for reforms that will bring relief to millions of Americans.

Join Us

If you are weary of the escalating cost of living and seek tangible solutions, join us. The Middle Class Party is committed to a pragmatic approach, developing policies that empower Americans and strengthen our nation's resilience. Together, we can ensure that our government prioritizes the needs of its people and makes the dream of a middle-class life an attainable reality.