Why Americans Can't Get Ahead Anymore

Have you ever looked at your paycheck and wondered, where did all that money go? If you feel like you're struggling financially, if you feel like you're running in place, then I'm going to show you why. Because I'll tell you this, this is not just about inflation. It's about multiple major financial pressures that are hitting Americans all at the same time, which makes the situation exponentially worse. So in today's video, I'm going to connect the dots for you. All right, so let's get the obvious one out of the way, which is inflation. So here's common misconception that most people make. However, I just want to say that I'm pretty confident that most of my regular viewers are educated about this already. Okay, so here's what you need to know. Although the rate of inflation has come down from its peak in 2022, that doesn't mean that prices have come down and returned back to their levels that we were seeing pre-pandemic. No, that's not what happened. The rate of inflation has decreased, yes, but that just means that prices are still going up, but they're just not going up as fast as they were back in 2022. So we would need the rate of inflation to be negative in order for prices to come down. In other words, we would need deflation. However, since the pandemic, we've never had deflation, which means that inflation has not stopped. Now here's the thing. If your wages go up as quickly as inflation, then there's not going to be a problem because they're going to balance each other out, right? Now, is that the case? Let's find out. I want to show you the data from the Federal Reserve showing wage growth since 2021. So this shows you the wage growth for full-time workers, part-time workers, and that blue line, that's the overall wage growth of all workers. So you're going to notice that part-time workers, take a look, they're seeing a huge lag when it comes to receiving more pay. But we're going to go with the overall wage growth to give a more accurate picture of the situation. Since 2021, when comparing inflation against wage growth, you're going to notice that wages have grown by a cumulative 23% and prices have inflated by 28%. Therefore, wages have not been keeping up with inflation. So that's not me being sensational. No, it's a fact. And the data is publicly available for everyone by the government. So not to mention, well, this is just my opinion, which I stated before, that the CPI inflation figures, they're most likely understated. And here's another thing that I want to point out. If prices have inflated by 28% and your income has grown by 28%, most people are going to be worse off. You know why? It's because of taxes. Just think about that situation. Now, if you're making more money, then you're most likely going to be pushed into a higher tax bracket. So your effective tax rate is going to go up. You might lose certain deductions because you make too much income to qualify. You might lose tax credits as well. So it's not going to be equivalent. Okay, now let's take a look at the actual expenses. So we'll just list some major ones. And we're going to start with insurance. And we'll take homeowner's insurance as our first example. Now, let me start with the homeowners. If you own a home, then I'm sure that you probably noticed that your premium has gone up significantly over the years. That's because insurance companies have been paying out more claims due to natural disasters. Rebuilding costs, of course, have increased. And the price of labor and construction materials has also risen dramatically. So from 2018 to 2022, the U.S. Treasury Department reported that the average premium per policy increased 8.7% faster than the rate of inflation. So the government hasn't updated these stats up until 2026, probably because the numbers look like a disaster. And I just want to say that this problem is not affecting just homeowners. It's affecting people that rent as well. You know, apartment buildings are seeing the same increase for their insurance costs. And what are they doing? They're passing that cost, that increased cost, down to the renters, to the consumers. So according to the Federal Reserve, from 2019 to 2024, property insurance has increased by 75%. And then there's auto insurance. Many drivers are paying substantially more than they were just a few years ago. Okay, why is that happening? It's because the cost to repair today's vehicles have increased. You know, replacement parts are more expensive thanks to inflation. And newer cars, they're packed with more technology, so it makes it even more expensive to repair even small repairs and minor repairs. So in 2026, the average cost of car insurance is up 18% from the same period last year. It's 18% in one year. And then there's health insurance. It doesn't even matter if you're getting it through your employer, if you're buying on your own. Many Americans, regardless, they're still paying higher premiums, higher deductibles, and higher out-of-pocket costs than we were before. For 2027, so next year, marketplace premiums are expected to increase by at least 10%. And then we have the housing situation. So if you didn't know, if you spend 30% or less of your gross income on housing, then that's considered affordable. So if you're a homeowner, then that's going to include your mortgage, property taxes, insurance, PMI, etc. Now, I've outlined in red March of 2021. So that was the last time that housing was considered affordable. But I just want you to take a look at where we are right now. It's not even close to 30%. It's about 40%. And I don't know where you live. I live in Chicago. I live in Cook County. And the property tax increases, I'll tell you, they're just out of control, especially over the past few years. And I'm going to take a wild guess that I'm not the only one that feels that way. And of course, this is contributing to people falling behind when expenses are inflating faster than your wages. So it's just everything hitting all at once. Insurance, property taxes, utilities, higher mortgage interest rates, and of course, home prices and rent prices that have shot up since the pandemic. Listen, the situation has gotten so bad that credit card debt in the U.S. keeps reaching new record highs. And we're currently at $1.25 trillion. And now delinquencies are at the highest level since 2008. So take a look at the credit card debt outstanding since 1999. And the problem, of course, it's being compounded by higher interest rates. And currently, the average interest rate on credit card debt is at 21%. And I want you to know that it's not just credit cards. Auto loan payments continue to climb due to inflated prices and, of course, higher interest rates. So this is a chart of the average monthly auto loan payments since 2018. It's pretty wild, huh? And I just want to mention this. Do you know why we have higher interest rates? It's because the government and the Federal Reserve, they've been printing so much money that inflation expectations are higher. And with higher inflation expectations, it's more difficult for the U.S. government to sell their treasury bonds and their treasury notes, which causes interest rates to go higher. And if interest rates on government debt goes up, then interest rates on mortgages, on auto loans, on credit card debt, they're all going to go up as well. So is the government and the Federal Reserve, is it their fault? And the answer is yes. That's not an opinion. That's the truth. This is how it works. And then you have food prices going up as well. This is a chart since 2016. Now, I want you to notice that from September of 2016 to January of 2017, the price of food actually went down. It's a miracle, right? Okay, now I want to bring this to your attention. Notice that after this huge run-up in food prices, that afterwards, food prices have not come down, right? The price of food continues to rise. And if you notice, it's actually accelerating. So if you say that groceries are getting more expensive and someone doesn't believe you, then tell them to look at the stats because that's what's going on. Additionally, it's my opinion that these numbers are massaged, like if you know what I mean. So a very good question to ask is, are we doomed? Listen, I want to be optimistic. This video was not about doom and gloom to scare you. It was to show you the stats and the facts and to educate you about the situation. Now, does this mean that there's no hope left for us? Now, I wouldn't say that. To me, this just means that the situation is just more challenging than it was a decade ago. So it's like if we were in a video game and we were playing on level four a decade ago, and now we've just spawned in level seven, like it's not going to be impossible, it's just going to be more difficult and stressful to make progress in life. So you have to upgrade yourself and, you know, so do I, so does everyone else in order to get, in order to, I guess, not get clobbered by this more challenging environment. Okay, so I hope you enjoyed and learned something new. I just condensed all the stats to, I guess, present it to you in a very convenient manner. But thank you so much. Please subscribe and I wish you a very nice day. Take care.