There is no more middle class (and why it’s only going to get worse)

Did you know the Home Alone house sold for $5.5 million last year? And the Full House house sold for $6 million?

The homes that represented the upper-middle class family in the generation I grew up in, are basically impossible to live in for almost everyone in America now.

If you are in your 30s or older, I would bet you have had the conversation about the cost of daycare many times with friends and family. The sources vary on this but parents spend about 20% of their household income on childcare.

Now I know the fastest way to lose readers here is to either talk about politics or cite a bunch of boring statistics.

This isn’t an article about daycare, statistics, and it’s certainly not going to lean anywhere politically.

This is an article about cost of living and how to think about cost of living.

Inflation is measured in all kinds of whacky ways, none of which actually represent the feeling the average American has. The single biggest takeaway I want anyone to get out of this, is that if your wages are not rising with your cost of living, you are getting poorer and poorer every year.

Don’t measure it by CPI, PPI or any other ridiculous stat. Measure it by what you and your family spends money on. Gas, groceries, childcare, insurance, housing. If all of those prices are rising and your income is not rising as fast as those prices, your wealth and your prospects at wealth are decreasing over time.

This is why the average first time home buyer age is now 40! (Yes for the first time ever). That is crazy. If there were one stat to encapsulate why the American dream is dead, it might be that.

The American Dream and the middle class is what drove America to be so great. It is what drove my parents and my wife’s parents to want to immigrate here.

The feeling that the majority of Americans feel now is that of hopelessness. That hopelessness is driven primarily from their lower standard of living due to lower wages relative to inflation.

I’ll write more about this topic in the future but I don’t want to make it too long.

If you want me to get into more details about the problems, let me know.

But for now, please just remember this. Internalize it. Tell your friends and family. Burn it into your soul.

If your wages are not rising with your cost of living, you are getting poorer and poorer every year.

Alex Kim
CEO of NookLocal