Earning More, Spending It Faster |
I missed it last week, but the Wall Street Journal had a nice column explaining the felt “squeeze” in a middle class that is earning more than ever, yet feeling precarious or constrained nonetheless.
Part of it is that rising fixed costs go to things that are not directly tangible. An extra $800 paid for health insurance premiums doesn’t feel like a lifestyle improvement but like a tax, at least until the improved medical care comes. Ronald Fryer writes:
The middle class is simultaneously better off and more financially strained than it has been in decades. The services that define 21st-century middle-class life—healthcare, child care, education—have risen two to three times as fast as overall consumer prices since 2000. This is the structural consequence of an economy that became extraordinarily productive at making goods but not at raising children or treating the sick. Meanwhile the gains—safer cars, cleaner air, longer........