Jeff Swope felt the first spurt of anger bubble up when he learned in February that his landlord was raising the rent on the empty two-bedroom apartment next door by more than 30%, to $2,075 a month.
Though Swope, a 42-year-old teacher, and his wife Amanda Greene, a nurse, make $125,000 a year, they couldn’t handle that steep a rent increase—not alongside the student loans and car payments and utility bills and all the other costs that have kept growing for a family of three. “The frustration—it was always a frog in the boiling water type of thing. I’d always felt it, but on a basic level. Something’s always brewing,” says Swope, from his modest apartment, where Atlanta Braves bobbleheads compete with books for shelf space. “We looked at the rent increase, and it was like, OK, this is ridiculous. I was like, ‘What the???’”
For Jen Dewey-Osburn, 35, who lives in a suburb of Phoenix, the rage arose when she calculated how much she owed on her student loans: although she’d borrowed $22,624 and has paid off $34,225, she still owes $43,304. (She’s in a dispute with her loan servicer, Navient, about how her repayments were calculated.) She and her husband know they’re more fortunate than most—both have good jobs—but they feel so stuck financially that they can’t envision taking on the cost of having children. “It’s just moral and physical and emotional exhaustion,” she says. “There’s no right choices; it feels like they’re all wrong.”
The exasperation of Omar Abdalla, 26, peaked after his 12th offer on a home fell through, and he realized how much more financial stability his parents, who were immigrants to the U.S., were able to achieve than he and his wife can. They both have degrees from good colleges and promising careers, but even the $90,000 down payment they saved up was not enough when the seller wanted much more than the bank was prepared to lend on the home they wanted.
Abdalla’s parents, by contrast, own two homes; his wife’s parents own four. “Their house probably made more money for them than working their job,” he says. “I don’t have an asset that I can sleep in that makes more money than my daily labor. That’s the part that kind of just breaks my mind.”
Middle-class U.S. families have been treading water for decades—weighed down by stalled income growth and rising prices—but the runaway inflation that has emerged from the pandemic is sending more than a ripple of frustration through their ranks. The pandemic seemed at first as if it might offer a chance to catch up; they kept their jobs as the service sector laid off millions, their wages started climbing at a faster rate as companies struggled to find workers, and they began saving more than they had for decades. About one-third of middle-income Americans felt that their financial situation had improved a year into the pandemic, according to Pew Research, as they quarantined at home while benefiting from stimulus checks, child tax credits, and the pause of federal student-loan payments.
But 18 months later, they increasingly suspect that any sense of financial security was an illusion. They may have more money in the bank, but being middle class in America isn’t only about how much you make; it’s about what you can buy with that money. Some people measure that by whether a family has a second refrigerator in the basement or a tree in the yard, but Richard Reeves, director of the Future of the Middle Class Initiative at the Brookings Institution, says that what really matters is whether people feel that they can comfortably afford the “three H’s”—housing, health care, and higher education.
In the past year alone, home prices have leaped 20% and the cost of all goods is up 8.5%. Families are paying $3,500 more this year for the basic set of goods and services that the Consumer Price Index (CPI) follows than they did last year. Average hourly earnings, by contrast, are down 2.7% when adjusted for inflation. That squeeze has left many who identify as middle class reaching to afford the three H’s, especially housing. In March, U.S. consumer sentiment reached its lowest level since 2011, according to the University of Michigan’s Surveys of Consumers, and more households said they expected their finances to worsen than at any time since May 1980.
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“The mantra has been: Work hard, pay your dues, you’ll be rewarded for that. But the goalposts keep getting moved back,” says Daniel Barela, 36, a flight attendant in Albuquerque, N.M., who is exquisitely aware that his father had a home and four kids by his age. Barela and his partner made around $69,000 between them last year, and he feels as if he’s been jammed financially for most of his adult life. He lost his job during the Great Recession and, after a major credit-card company raised his interest rate to 29.99% in 2008, he had to file for bankruptcy. “No matter what kind of job I’ve held and no matter how much I work, it never seems to be enough to meet the qualifications to own a home,” he says.
Even if people Barela’s age, who make up much of the middle class today, earn more money than their parents did, even if they have college degrees and their choice of jobs, even if they have a place to live, an iPhone, and a flat-screen TV, many are now sensing that although they followed all of American society’s recommended steps, they somehow ended up financially fragile. “Our income supposedly makes us upper middle class, but it sure doesn’t feel like it,” says Swope. “If you’re middle class, you can afford to do fun things—and we can’t.”
TIME talked to dozens of people across the country, all of whose incomes fall in the middle 60% of American incomes, which is what Brookings defines as the middle class. For a family of three, that means somewhere between $42,500 to $166,900 today. Here’s what we heard:
“The American Dream is an absolute nightmare, and I just want out at this point.”
“It’s really discouraging. I’m losing hope. I don’t know what to do.”
“We did what we’re supposed to do—but we’re just so cost-burdened.”
“It’s the most money I’ve ever made, but I still can’t afford to buy a home.”
“I’ve put down roots here. I don’t want to be forced out.”
Many mentioned resentment toward their parents or older colleagues who don’t understand why this younger generation don’t bear the hallmarks of the middle class, like a single-family home or paid-off college debt. “Boomers could literally work the minimum-wage job, they could experience life—go to national parks or have children and own homes. That’s just not possible for us,” says Julie Ann Nitsch, a government worker in Austin who, when the home she rents goes up for sale in May, will no longer be able to live in the county she serves.
They have a point. Homeownership has become more elusive for each successive generation as real estate prices have outpaced inflation. More than 70% of people ages 35 to 44 owned a home in 1980, according to the Urban Institute, but by 2018, less than 60% of people in that age group had bought a place to live. The soaring value of owner-occupied housing, which reached $29.3 trillion by the end of 2019, has created a divide, enriching the older Americans who own homes and shutting out the younger ones who can’t afford to break into the market.
Millennials and younger generations came of age in the worst recession in decades, entered a job market where their wages grew sluggishly, and then weathered another recession at the beginning of the pandemic. Through it all, costs continued to rise. Median household income has grown just 9% since 2001, but college tuition and fees are up 64% over the same time period, while out-of-pocket health care costs have nearly doubled. Just half of all children born in the 1980s have grown up to earn more than their parents, as opposed to more than 90% of children in the 1940s. Both millennials and Generation X have a lower net worth and more debt when they reach age 40 than boomers did at that age, according to Bloomberg.
Their worries matter for the larger American economy. As Joe Biden said in 2019, “When the middle class does well, everybody does very, very well. The wealthy do very well and the poor have some light, a chance. They look at it like, ‘Maybe me—there may be a way.’”
If the middle class is feeling left out of one of the strongest economies in decades, when the unemployment rate is at a historic low, it’s a grave sign that social discord is coming. Right now, there’s no Great Recession, no tech meltdown, no collapse of complex real estate investment products to explain away why things are tight. On the surface, the economy looks buoyant. But like Swope’s slowly cooking frog, lots of middle-income earners are realizing that they’re in hot water and going under. “It’s not like this volcano came out of nowhere,” says Reeves, the Future of the Middle Class Initiative director. “To some extent, we’ve seen these long-term shifts in the economy like sluggish wage growth and downward mobility. It can take some time for the economic tectonic pressure to build sufficiently—and now the volcano is erupting.”
The costs of all three H’s have soared over the past few decades, but it’s the cost of housing—usually the largest and most crucial expenditure for any family—that is fueling so much of the current discontent. Housing prices have climbed steadily for decades, with the exception of a dip from 2007 to 2009, but growth reached a fever pitch in the past year. Few places are immune; more than 80% of U.S. metro areas saw housing prices grow at least 10%. In the Atlanta metro area, where Swope and Greene live, the median listing price is $400,000, up 7.5% from last year. (They think they could afford a house that costs $300,000.)
The rising prices are driven by a legion of forces, including a lag in building in the wake of the Great Recession, a rise in short-term rentals, speculation by institutional investors who own a growing share of single-family homes, a shortage of construction materials, and labor and supply-chain issues. They’re exacerbated by growing demand from families looking to spend the money they’ve saved, boomers who are aging in place rather risking life in a facility during the pandemic, and millennials anxious to start a family.
The recent scramble to buy homes has been well documented, but in many places, renters are in a worse position than buyers. Rents rose almost 30% in some states in 2021, and are projected to rise further this year. David Robinson, 37, was born and raised in Phoenix and now lives with his girlfriend and three children in a modest three-bedroom apartment in Maryvale, which he considers a low-end part of town. In September, their rent went from $1,200 a month to $2,200, with extra fees, after, he says, “some property-management company based out of Washington [State]” bought the building. His rent now represents about 50% of his income as a utilities surveyor.
“It’s kind of hard to do anything with your family,” he says. “After buying clothes, food, and [paying] the other bills like electricity, water, stuff like that, the financial cushion wears really thin. I’m pretty much working to pay someone else’s bills.” He crosses his fingers that their cars hold out a little longer, not to mention their health.
Amanda Greene, Jeff Swope’s wife, knows that feeling. She owes $19,000 on her Toyota Corolla, which she downgraded to after her Jeep Cherokee died unexpectedly. And before she married Jeff and went on his health plan, insurance for herself and her 7-year-old daughter through her employer cost $1,400 a month. Greene covered only herself, and paid out of pocket for her daughter. She has a condition that requires extensive testing, and is still paying off thousands of dollars that her insurance didn’t cover.
Medical costs have typically risen faster than inflation over the past two decades, propelled by the increased cost of care and more demand for services due to the aging population. National per capita spending on health care in 1980 was $2,968 when adjusted for inflation; by 2020 it was four times that. The pandemic compounded the challenges, as many people lost jobs and the insurance that came with them. More than half of adults who contracted COVID-19 or lost income during the pandemic also struggled with medical bills, according to a survey done by the Commonwealth Fund.
Higher education, the third H, has also become steadily more expensive as the cost of college grew and federal funding for public universities plummeted. As prices rose, more students took out loans. Average student-loan debt in 2020 was $36,635, roughly double what it was in 1990, when adjusted for inflation. Families struggle for decades to keep up with payments. Greene thought she was setting herself apart when she went to a private college to get a degree in nursing. Now she owes $99,000 in loans, while her two sisters who didn’t go to college are debt-free.
For many college graduates, the pandemic provided some relief, when the CARES Act paused payments on federal student loans. Suddenly, people had money to pay their other bills, and saw what life would be like without crippling student debt. Greene watched an app on her phone as her loans paused at $99,000—and stayed there. She’s dreading when payments start up again.
All told, the three H’s—rent, health care, and higher-education loans—take up a growing share of Swope and Greene’s take-home pay. Add necessities like food and utilities, and they have months when they write their rent checks without having enough money in their checking account. (Swope gets paid monthly.) They don’t eat out. They switched to generic grocery brands. Although they both work full time, Swope is considering picking up a part-time job.
Some economists argue that the parlous state of the middle class is being disguised by poor accounting. Eugene Ludwig, the former comptroller of the currency in the Clinton Administration, says the CPI distorts the real economic picture for lower- and middle-income Americans because it counts the costs of discretionary items such as yachts, second homes, and hotel rooms. By his calculations, the cost of household minimal needs rose 64% from 2001 to 2020, 1.4 times inflation. In March, the Ludwig Institute for Shared Economic Prosperity released a report that suggested housing prices had actually risen 149% (the CPI put it at 54%) and medical costs were up 157% (vs. the CPI’s 90%).
“We found that while people in 2001 maybe did have just a little bit of discretionary spending, by 2019 as a comparison, many households did not, particularly the ones with more children,” says the Ludwig Institute’s executive director, Stephanie Allen. (The pandemic made tracking these data too unreliable to estimate discretionary spending since then, she says.)
The stress and anger people in their 30s and 40s feel is spilling over into their relationships with their parents’ generation. Today, a family in the U.S. making the median household income would need to pay six times that income to buy a median-price house. In 1980, they would have needed to pay double. But many boomers don’t seem to have much sympathy for their children’s predicament. Jeff Swope’s father was able to support a family of three on a social worker’s salary, and bought a house in Sandy Springs, Ga., for around $50,000. His mother sold it last year for $255,000, and that buyer sold it in March for 30% more than that.
Swope, on the other hand, graduated from college with a marketing degree in 2003, and got a job selling Yellow Pages ads. When that business disappeared with the proliferation of online search engines, he waited tables and got a second degree so he could teach. He graduated in 2008 in the midst of the Great Recession and supported himself by working as a trivia host and taking whatever teaching placements he could find.
He didn’t get an entry-level public school teacher job until 2013. Even now, his income, $55,000, wouldn’t be enough to support a family. He and Greene applied for preapproval for a mortgage but haven’t heard back. He feels stuck. “It’s kind of like, you’re not an adult unless you have a house,” he says. “The older generation looks down on you because they just don’t understand.”
One of the things it’s harder for some folks to grasp are the ripple effects of structural changes that were just beginning when they were younger. The decades-long decline of unions, for example, has made it harder for workers to negotiate better wages and benefits. Swope is not in a teachers’ union, because Georgia doesn’t allow for collective bargaining for public educators, which is one reason the average public school teacher there made 5% less in the 2020–2021 school year than in 1999–2000, when adjusted for inflation. In Massachusetts, a state with strong teachers’ unions, the average public school teacher’s salary grew 19% over the same time period.
Across the nation, a job with health care and other benefits is becoming harder to find. There are at least 6 million more gig workers than there were a decade ago. Even revenue-rich companies like Google and Meta outsource such functions as cleaning, food service, and some tech jobs, excluding many of the people who work in their offices from the benefits of full-time employment.
At the same time, the unabated rise of automation and technology has meant that ever more employers want workers with a college education. About two-thirds of production supervisor jobs in 2015 required a college degree, according to a Harvard study, while only 16% of already-employed production supervisors had one.
Flight attendant Daniel Barela’s father Daniel Barela Sr. can’t understand why his children are struggling. When he first moved to Albuquerque in 1984, he was making $5.40 an hour as a custodian. He doesn’t have a college degree, but he worked his way up at his company and bought the house where Daniel grew up. He and his wife now own nine properties around New Mexico.
“My generation—we didn’t end the week at 40 hours,” he says. “It started at 40 hours if you wanted to be successful, and we did whatever it took. This generation—at 40 hours, they’re exhausted. They don’t call it the Me Generation for nothing.”
The elder Barela has a pension, which people in his role wouldn’t receive today. And he acknowledges that housing is more expensive than it was when he was buying real estate. But he’s also been surprised how hard it is to find someone to help him fix up one of his rental properties for $12 to $15 an hour. “It’s not just my kids. I see it in other kids—they just don’t want to work,” he says.
This frustrates his son to no end. He’s put in long hours to work his way up in the aviation industry and still can’t even qualify to own a home. Whenever he gets a raise, he says, health-insurance premiums and other costs go up the same amount. It’s not just his imagination. According to the Ludwig Institute, a teacher and an ambulance driver in Albuquerque would make $77,000 a year, which is higher than the U.S. median income of $67,000—but they’d still have to go $6,000 into debt to meet their minimum adequate needs every year.
During the pandemic, Barela did have a taste of what life might have been like for his father. Since he was furloughed, and receiving unemployment benefits and stimulus money, he was able to pay off all of his debt, he says. Now that he’s working again, he’s back to using credit cards and living paycheck to paycheck.
It’s getting so Barela is feeling as if he should just fulfill his father’s prophecy and stop trying so hard. Toil hasn’t gotten him anywhere. Why put in more hours dealing with angry passengers for pay that will get eaten up by bills? “I think if anything, COVID taught us: Is it worth working to the bone over quality of life?” he says. “For myself, I will start to just sustain what I need to sustain, but I’m not going to bend over backwards to fulfill some corporate mantra.”
He—like Jeff Swope, and many of the other people interviewed for this story—direct much of their frustrations at the very rich, who accumulate wealth in investments, which when withdrawn are taxed at a far lower rate than wages. Widespread dissatisfaction and shrinkage in the ranks of the middle class has long been linked with political instability. In times of great economic inequality, the rich oppressed the poor or the poor sought to confiscate the wealth of the rich, leading to violence and revolution. But the presence of a middle class has helped America evade that conflict, says Vanderbilt University law professor Ganesh Sitaraman. That’s why he argues that “the No. 1 threat to American constitutional government today is the collapse of the middle class.”
It’s no coincidence that the diminishing faith Americans have in their institutions has mirrored the decline in the fortunes of the middle class. And President Biden, who has long fashioned himself as a champion of those in the middle, is nevertheless losing their support; only a third of people approved of his handling of the economy in a March NBC poll, a drop of 5 percentage points since January.
Some economists believe that the years following World War II were an anomaly—a period of unprecedented productivity growth and prosperity that will never be replicated. Millions of people went to college on the GI Bill, and wages shot up, allowing families to buy homes and cars and televisions.
That means that comparing middle-class workers with their parents may not be the most useful way to measure their economic state. If their childhoods were built in a period of exceptional economic growth, it’s no wonder that people like Swope and Barela feel left behind today. Moreover, previous generations kept many Americans, including people of color and women, from entering the workforce and from owning homes. “Some of the reasons middle-class Americans were able to do so well before is that they were excluding people from the labor market, and they had strong trade unions that got them higher wages than the market would have given them,” Reeves says.
Adjusting to the new world isn’t going to be easy. Reeves cautions families to compare themselves not with their parents’ generation, but instead with where they would be without the policy actions during the Great Recession and the pandemic recession. Where would the American economy be if the government hadn’t bailed out the banks and the auto companies? What if it hadn’t paused student-loan payments during the pandemic and sent out stimulus checks and child tax credits? If families could compare themselves with the counterfactual, they might not get so angry—and maybe their anger wouldn’t be as easily weaponized against whoever they think created their economic woes, whether it be people of different races, or Big Business.
A little while ago, after Jeff Swope found out about the rising prices in his apartment complex, he posted something in a Facebook group called No One Wants to Work that mocked all the businesses complaining about how they can’t find workers—while they’re offering minimum wage for terrible jobs.
“A nurse and a teacher with a 125k household income are about to not be able to not get ahead with any savings. It’s that bad,” he wrote. Some of the commenters blamed him for poor money management. They couldn’t sympathize with someone making a six-figure income and still struggling.
But many more of the hundreds of commenters felt something else—that they knew exactly what Swope was feeling. “My boyfriend and I have union jobs at a steel mill and are in about the same boat,” one wrote. Another, also a nurse, wrote that she and her husband, an engineer, were also living paycheck to paycheck. In the comments, their fury was unbridled. “Absolutely ridiculous that you can have two of the most important jobs out there and still barely afford to live,” another commenter said. “I hate this country.”
—With reporting by Leslie Dickstein/New York
Correction April 28: The original version of this story misstated the Ludwig Institute’s inflation estimates. It estimates the cost of household minimal needs rose 1.4 times faster than inflation between 2001 and 2020, not 1.4% faster.
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