Can you live in California on a $60,000 a year household income? Living the middle class lifestyle in California on $60,000 a year.
Can you live comfortably in California making $60,000 a year? It really depends on what you define as comfortably. We should note that the median household income in the US is $50,000 and in California it isn’t much higher. California gets a notorious rap of being an expensive state but this is if the entire focus is on coastal regions. There are many areas where homes are actually affordable given current interest rates. Yet many people struggle to get by. You have many households pulling in $100,000 or more a year and they speak as if it were an act of poverty. Yet they choose to live in areas like San Francisco and spend up to their income levels. It is very feasible to live in California on $60,000 a year but not how many would expect. People are feeling the withdrawals of our debt based addiction and California is a prime example of this.
What does Detroit say about the working class in the US? City has lost over 25 percent of its population since 2000. People take scrap metal from old buildings to export to China.
One of the biggest examples of the US eroding its working class is through the example of Detroit. The city of Detroit has lost a stunning 25 percent of its population between 2000 and 2010. Poverty is rampant with 3 out of 5 kids living below the poverty line. It is a startling revelation of what can happen to what was the fifth biggest city in the United States and now is merely a shell of itself. There is a documentary, Detropia which grimly shows dilapidated buildings while many tear out scrap metal to sell on the open market. You also hear from citizens trying to make sense of what is occurring. What is stunning is the population of Detroit is now back to levels last seen in the first half of the 1900s. A town built around big US automakers reflects what a country can look like when it loses a big part of its manufacturing base in pursuit of low wage capitalism. The rust belt gives us a clearer perspective as to why we have 47 million Americans on food stamps while the stock market inches closer to record levels.
Are we missing critical inflation data with the CPI? How the government over time has altered the CPI to under report inflation.
Most Americans realize that their standard of living has decreased. Many realize today that their dollars do not go as far as they once did. We try to reflect this data via the Consumer Price Index but over the last few decades, this index has been adjusted to suit the needs of those producing the data or more to the point, those in power. A measurement is only as good as its ability to accurately produce valuable data. The CPI has been altered many times over the last few decades and we’ll discuss how this measure no longer reflects real underlying inflation. You need only look at your underlying budget to realize that somehow, your money is not going as far as it once did. Yet the CPI data tells us that inflation is hardly any concern in the current economy. Let us examine a little bit of history with the CPI.
Income Based Repayment plan cementing inflated higher education costs for graduate school: How new IBR Pay as you Earn plan will be a big win for graduate students and keep college costs high. Student debt to hit $1.8 trillion in 2020.
It is interesting that the two segments in our economy mired in debt, housing and higher education, were largely inflated courtesy of easy access to debt. New rules on how students pay back their student debt including the Income Based Repayment plan ironically will keep prices inflated. The new program dubbed “Pay as you Earn†reduces the cap on loan payments from 15 to 10 percent of a borrower’s income and accelerates loan forgiveness from 25 to 20 years. As we will highlight, this will largely aid in keeping prices inflated especially in graduate schools since the government will provide a subsidy to this cohort. It is interesting that the fastest growing debt segment of the economy after the recession has come in student debt. Instead of looking at the issue comprehensively, it is likely that we will continue to push this bubble until it pops.