Cost of Living & Wages|March 10, 2025

You're Not Imagining It — Life Really Is Getting More Expensive for Ordinary Americans

Wages aren't keeping up. Rent's through the roof. Groceries cost more than ever. Discover what's really driving prices up in America — and why the system isn't built for people like us.

You're Not Imagining It — Life Really Is Getting More Expensive for Ordinary Americans

Introduction: A Heavy Load for Everyday Americans

If you're feeling like our wallet keeps getting lighter despite working hard every day, you're not alone. Across the United States, millions of people are experiencing the crushing reality of rising expenses and stagnating wages. Everyday costs like rent, groceries, healthcare, and energy have skyrocketed, leaving little to no room for savings. The fact is, this isn't bad budgeting or bad luck—it's how the system has been set up to disproportionately favour the wealthy, while making life harder for everyone else.

Inflation and Stagnant Wages: A Painful Combination

In recent years, inflation has pushed the cost of living to staggering heights. According to the U.S. Bureau of Labor Statistics, prices for essentials like food have risen by over 20% in the last five years. Yet, wages haven't kept pace. Even with aggressive inflation adjustments, real wages—the money we take home after adjusting for cost of living—have remained essentially flat for decades.

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The result? Most Americans are working harder just to stand still. If you're middle class or working class, our paycheck likely vanishes into rent, childcare, groceries, and healthcare with little left over. For many, saving for emergencies or securing a home feels entirely out of reach.

Who Benefits From This Economic Reality?

While ordinary Americans tighten their belts, the wealthiest have seen exponential growth in their fortunes. Economists like Thomas Piketty have shown how wealth inequality compounds itself: the rich don't rely on salaries but instead grow wealth through assets like property, stocks, and capital gains. These aren't just abstract numbers. They're real profits fuelled by our labour and expenses.

Here's a simple example: if you're renting a house or apartment, around 30% of our income goes to a landlord, often an already wealthy individual or corporation. That wealth isn’t being reinjected into the economy to make life easier for renters. Instead, it often gets funnelled into other investments, driving up property prices even further.

Housing: The Perfect Storm of Inequality

If you feel like buying a home is less achievable now than it was for previous generations, you're absolutely right. Decades ago, the average home cost between 2–3 times the total annual salary of a middle-class family. Today, it's often 6–7 times that—and in some high-demand cities, it's even higher.

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Why? Wealth inequality fuels an insatiable demand for assets. Wealthy investors and institutions buy up properties, pushing prices higher and higher. Ordinary families are squeezed out, left with no choice but to rent indefinitely, perpetuating a cycle where wealth remains concentrated among the affluent.

Education and Healthcare Costs: No Relief in Sight

Even basic opportunities like education have become increasingly unaffordable. There's no better example than student debt, which now totals over $1.7 trillion in the U.S. Average families are saddled with loans that take decades to pay off, further diminishing their spending power. Healthcare, another critical expense, continues to balloon in cost, as profits for pharmaceutical companies and private healthcare systems remain sky-high.

For middle- and working-class households, there’s simply no room to catch a financial break, as these essential, non-negotiable expenses eat into any potential savings.

The Cost of Wealth Inequality on the Economy

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Wealth inequality isn’t just a personal problem—it’s a societal one. Economists like Joseph Stiglitz argue that when fewer people have disposable income, economic growth suffers. Rich people save and invest their wealth, but they don’t spend much of it on day-to-day needs. By contrast, ordinary workers tend to spend most of their income, driving demand for goods and services which, in turn, boosts the broader economy.

When too much wealth is concentrated at the top, that demand falters. Local shops close their doors. Jobs in retail, hospitality, and manufacturing evaporate. And so, the cycle deepens: less opportunity, more economic strain, and even more frustration.

Conclusion: Change is Possible

It's clear that the system, as it stands, benefits a select few at the expense of the vast majority. And unless significant reforms—like fairer taxation of the wealthy and stronger wage protections—happen soon, the economic divide will continue to widen.

The bottom line? Life is getting harder because the economy is rigged against everyday Americans. But by spreading awareness and advocating for systemic change, we can take steps to ensure a fairer, more equitable future for everyone—not just the wealthy few who are always insulated from hardship.


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