Gas Prices Up, Wages Down, Americans Caught in the Middle
With soaring gas and commodity prices and falling income, what are working Americans supposed to do?
by Bryce Covert
This week’s credit check: Median income fell by $5,261 in the past decade. The average price of gas is up 80 cents per gallon.
When picturing people who are so far into debt they can’t get on top of their bills, many likely see images of flat screen TVs, Escalades, and giant, unnecessary houses. But the sad truth is that one of the biggest reasons Americans carry $796.5 billion in revolving debt is that wages have stagnated while the cost of necessities rose. That’s particularly true now, at the end of a decade where wages actually dropped, 13.7 million people are unemployed, and prices are through the roof.
Gas prices are soaring. The average price is up 80 cents per gallon since January, up to $3.96. With Americans consuming about 140 gallons per year, that’s an extra $112 billion over the course of 2011 that consumers will have to shell out at the pump.
So is rent. It is too damn high. A new study came out recently that showed the level of renters spending more than half of their income on rent is the highest in half a century. That’s not just low-income people, either. “About 26 percent of renters — or 10.1 million people — spent more than half their pre-tax household income on rent and utilities in 2009,” the Washington Post reported. Under ideal circumstances, renters aren’t supposed to spend more than 30% of their income on housing.