64 Time May 9/May 16, 2022
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 com-
plex real estate investment products to
explain away why things are tight. On
the surface, the economy looks buoy-
ant. 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 le-
gion of forces, including a lag in build-
ing 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 al-
most 30% in some states in 2021, and
are projected to rise further this year.
NATION
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 buy-
ing 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 fin-
gers that their cars hold out a little lon-
ger, not to mention their health.
Amanda Greene, Jeff Swope’s wife,
knows that feeling. She owes $19,000
on her Toyota Corolla, which she down-
graded to after her Jeep Cherokee died
unexpectedly. And before she married
Jeff and went on his health plan, in-
surance 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 re-
quires extensive testing, and is still pay-
ing off thousands of dollars that her in-
surance 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 in-
flation; by 2020 it was four times that.
The pandemic compounded the chal-
lenges, 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 plum-
meted. As prices rose, more students
took out loans. Average student- loan
debt in 2020 was $36,635, roughly