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This chart is the best explanation of middle-class finances you will ever see

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Mockingbird    2,984
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Economists and financial experts have been telling us for years how great things are for U.S. workers and consumers. The stuff we buy is dirt cheap, and living standards are higher than ever.

 

Wages are keeping pace with inflation. Inequality probably isn’t as bad as you’ve been led to believe. The stock market is booming!

 

So why, then, do so many of us feel like we can barely make ends meet?

 

A new report published by the Manhattan Institute, a conservative think tank, offers a clear explanation for the disconnect between the economy described by economists and the one experienced by regular people. It all boils down to the startling shift illustrated in the chart below.

 

KD2E3LARMFDD5OZZGGR727662Q.png&w=1440

 

Lead author Oren Cass distills it as follows: “In 1985, the typical male worker could cover a family of four’s major expenditures (housing, health care, transportation, education) on 30 weeks of salary,” he wrote on Twitter last week. “By 2018 it took 53 weeks. Which is a problem, there being 52 weeks in a year.”

 

Cass calls this calculation the Cost-of-Thriving Index. It measures the median male annual salary against four major household expenditures:

 

  • Housing, defined as the annual rent for a three-bedroom house in the 40th percentile of the local housing market.
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  • Health care, defined as the annual premium on a typical family health insurance policy.
  •  
  • Transportation, defined as the average cost of owning and operating a car driven 15,000 miles per year.
  •  
  • Education, defined as the average cost of tuition, fees, and room and board at a four-year public college.

 

GJVLUKD7PRHJXANK2APIK2TUVM.png&w=1440

 

In 1985, the typical male breadwinner could cover those costs and still have 22 weeks of pay left for everything else a family wants and needs, such as food, clothing, entertainment and savings. Today, the typical salary doesn’t even cover the four basics.

 

[...]

 

https://www.washingtonpost.com/business/2020/02/24/this-chart-is-best-explanation-middle-class-finances-you-will-ever-see/

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