As 2016 dawned, you may have gotten a flurry of red notices. (Just be glad they weren’t howlers like in Harry Potter.)
Costs are rising, but your income is probably not. It costs you to even breathe in a city like New York. So, you know 2016 is expensive. But do you know exactly why? Here are some possible reasons:
Rent is Ridiculously Expensive
Rent has steadily risen in recent times, especially in big cities. The mortgage loan crisis of 2008 plummeted property values, but not rent. The rent only went higher. It’s next to impossible to live in a big city without selling a kidney. There are multiple theories why rent in big cities is so expensive. High demand, inflation rates, and greedy realtors all play a role.
Entry-Level Jobs are Disappearing
In the current job market, it’s impossible to secure a steady job without an advanced degree or a fancy certificate from an Ivy League college.
Wages are Stagnating Almost Everywhere
If your job pays you the same that your father earned in the same position two decades ago, that’s not a good thing. Inflation has been rising. Ideally, wages should be rising with the inflation rate. But they haven’t. Wages have been stagnating across America and in many parts of the world for the past two decades. This makes day to day life very hard for most families.
Tax Burden is Increasing for Mid-Level Earners
Who can forget the taxes? The problem with the current tax system is that it puts undue burden on middle-income workers, while high-level earners take advantage of low rates, tax loopholes, and deductibles. Remember that wages are stagnating. A tax burden is not something that should be added to that list of worries. Overall, life is becoming more and more expensive for middle-class workers. The rich get richer, and the poor get poorer, as they say.
Everyone Wants Sky-High Profits
Most average earners know that everything nowadays costs an arm and a leg. Medical care, which is supposed to be a basic human right, puts many people in debt thanks to outlandish ER bills. Even the gadgets we depend on, like smartphones, are becoming more expensive. Part of the reason is greed. Corporations can manufacture gadgets like smartphones for extremely cheap prices in third world countries. However, the retail prices remain high so the profit margin also remains high. Greed is not good for low and middle-income folk.
There is not one reason why everything is expensive this year. But some of the above reasoning might explain why it is so.