Report: Americans Require Additional $11K+ for 2021 Living Standards
Americans Struggle to Maintain Standard of Living Amid Soaring Inflation
Americans are facing a daunting challenge this year - they need over $11,000 more to sustain the same standard of living they enjoyed at the beginning of 2021. The impact of soaring inflation has been revealed in an analysis of government data, which shows that the typical American household must spend an additional $11,434 in 2023 to maintain their quality of life.
Although the inflation rate has slightly slowed down since 2021, when it reached its highest levels in four decades, many American families are feeling the financial strain more than ever before. A CBS News poll conducted in September found that less than half of Americans, 47%, feel financially comfortable and have money left over after meeting their expenses. This is a decrease from 56% who reported the same in 2019. On the other hand, more than half, 53% of Americans, say they either have just enough or cannot meet their expenses, an increase from 44% in 2019.
Food, transportation, housing, and energy are the top categories that require additional spending, accounting for nearly 80 cents of every extra dollar spent. This analysis from Republicans on the Senate Joint Economic Committee highlights the significant impact of rising prices in these essential areas.
Furthermore, an analysis by the Ludwig Institute for Shared Economic Prosperity reveals that the average American fell short by nearly $14,000 in covering basic needs last year. The study found that about 6 in 10 Americans were unable to meet their basic needs in 2022.
While wages have seen some growth, they have failed to keep up with inflation. Government data shows that the average hourly wage has increased by 13.6% since January 2021, but inflation has outpaced this growth with a 17% spike.
Not all states are experiencing the same level of struggle with inflation. Colorado families face the highest expenses hike this year, needing an extra $15,000 per year to maintain their 2021 standard of living. On the other hand, Arkansas had the lowest expenses increase with an $8,500 hike.
In addition to everyday expenses, prices for holiday celebrations have also seen significant increases. The cost of a Thanksgiving meal for ten people has risen by an average of 14.7% compared to last year, and a staggering 25% compared to 2019. Halloween candy prices have also experienced double-digit inflation for the second consecutive year, spiking by 13% since October last year.
Furthermore, a report from the Alliance for Consumers estimated that the Biden administration’s rules and regulations may have added a $9,000 price tag for American homeowners due to price hikes in various products.
These financial challenges have taken a toll on public sentiment, with about 75% of people describing the economy as poor, according to a recent poll conducted by the Associated Press-NORC Center for Public Affairs Research.
As Americans navigate these difficult times, it is clear that the impact of inflation is significantly affecting their ability to maintain their standard of living.
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What are the main drivers behind the soaring costs that Americans are facing?
Rising inflation has only exacerbated this shortfall, making it even more difficult for Americans to make ends meet. Many are faced with difficult choices, such as cutting back on essentials or taking on additional, often unsustainable, debt.
One of the main drivers behind the soaring costs is the rising prices of food. The cost of groceries has increased significantly in recent months, putting a strain on already tight budgets. This is particularly concerning as food is a basic necessity that cannot be compromised on.
Transportation costs have also gone up, with gas prices hitting record highs. This has a ripple effect on other expenses, as increased transportation costs lead to higher prices for goods and services. This is especially impactful for those living in rural areas or those who rely heavily on commute for work.
Housing is another area where Americans are feeling the pinch. Rent and mortgage payments have soared, making it difficult to find affordable housing. This is further exacerbated by a shortage of available housing, leading to increased competition and higher prices.
Energy costs have also skyrocketed, with electricity and heating bills becoming a significant burden for many households. This is particularly concerning during the winter months when temperatures drop and energy consumption increases.
The consequences of this rising inflation extend beyond just financial strain. Many Americans are finding it increasingly difficult to save for the future or invest in their education or retirement. This not only hampers individual financial growth but also has long-term implications for the overall economy.
The government has taken steps to address this issue, including implementing measures to boost the supply chain and mitigate the impact of rising inflation. However, these efforts haven’t been enough to alleviate the burden on American households.
In conclusion, Americans are facing a significant challenge in maintaining their standard of living amid soaring inflation. Rising costs in essential categories such as food, transportation, housing, and energy have left many struggling to make ends meet. The financial strain is not only impacting individuals’ immediate well-being but also their ability to save for the future. It is crucial for policymakers to take further action to alleviate this burden and ensure that Americans can sustain their quality of life in the face of rising inflation.
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