65
double what it was in 1990, when ad-
justed for inflation. Families struggle
for decades to keep up with payments.
Greene thought she was setting herself
apart when she went to a private college
to get a degree in nursing. Now she owes
$99,000 in loans, while her two sisters
who didn’t go to college are debt-free.
For many college graduates, the
pandemic provided some relief when
the CARES Act paused payments on
federal student loans. Suddenly, peo-
ple had money to pay their other bills,
and saw what life would be like with-
out crippling student debt. Greene
watched an app on her phone as her
loans paused at $99,000—and stayed
there. She’s dreading when payments
start up again.
All told, the three H’s—rent,
health care, and higher- education
loans—take up a growing share of
Swope and Greene’s take-home pay.
Add necessities like food and utili-
ties, and they have months when they
write their rent checks without hav-
ing enough money in their checking
account. (Swope gets paid monthly.)
They don’t eat out. They switched to
generic grocery brands. Although they
both work full time, Swope is consid-
ering picking up a part-time job.
Some economists argue that the par-
lous state of the middle class is being
disguised by poor accounting. Eugene
Ludwig, the former comptroller of the
currency in the Clinton Administra-
tion, says the CPI distorts the real eco-
nomic picture for lower- and middle-
income Americans because it counts
the costs of discretionary items such
as yachts, second homes, and hotel
rooms. By his calculations, the cost of
household minimal needs rose 64%
from 2001 to 2020, 1.4% faster than in-
flation. In March, the Ludwig Institute
for Shared Economic Prosperity re-
leased a report that suggested housing
prices had actually risen 149% (the CPI
put it at 54%) and medical costs were
up 157% (vs. the CPI’s 90%).
“We found that while people in
2001 maybe did have just a little bit
of discretionary spending, by 2019 as
a comparison, many households did
not, particularly the ones with more
children,” says the Ludwig Institute’s
executive director, Stephanie Allen.
(The pandemic made tracking these data
too unreliable to estimate discretionary
spending since then, she says.)The sTress and anger people in
their 30s and 40s feel is spilling over
into their relationships with their par-
ents’ generation. Today, a family in the
U.S. making the median household in-
come would need to pay six times that
income to buy a median-price house.
In 1980, they would have needed to
pay double. But many boomers don’t
seem to have much sympathy for their
children’s predicament. Jeff Swope’s
father was able to support a family of
three on a social worker’s salary, and
bought a house in Sandy Springs, Ga.,
for around $50,000. His mother sold it
last year for $255,000, and that buyer
sold it in March for 30% more than that.
Swope, on the other hand, graduated
from college with a marketing degree in2003, and got a job selling Yellow Pages
ads. When that business disappeared
with the proliferation of online search
engines, he waited tables and got a sec-
ond degree so he could teach. He grad-
uated in 2008 in the midst of the Great
Recession and supported himself by
working as a trivia host and taking what-
ever teaching placements he could find.
He didn’t get an entry-level pub-
lic school teacher job until 2013. Even
now, his income, $55,000, wouldn’t
be enough to support a family. He and
Greene applied for preapproval for a
mortgage but haven’t heard back. He
feels stuck. “It’s kind of like, you’re not an
adult unless you have a house,” he says.
“The older generation looks down on
you because they just don’t understand.”
One of the things it’s harder for
some folks to grasp are the ripple ef-
fects of structural changes that werejust beginning when they were younger.
The decades-long decline of unions, for
example, has made it harder for work-
ers to negotiate better wages and ben-
efits. Swope is not in a teachers’ union,
because Georgia doesn’t allow for col-
lective bargaining for public educa-
tors, which is one reason the average
public school teacher there made 5%
less in the 2020–2021 school year than
in 1999–2000, when adjusted for in-
flation. In Massachusetts, a state with
strong teachers’ unions, the average
public school teacher’s salary grew 19%
over the same time period.
Across the nation, a job with
health care and other benefits is be-
coming harder to find. There are at least
6 million more gig workers than there
were a decade ago. Even revenue- rich
companies like Google and Meta out-
source such functions as cleaning, food
service, and some tech jobs, excluding
many of the people who work in their
offices from the benefits of full-time
employment.
At the same time, the unabated
rise of automation and technology has
meant that ever more employers want
workers with a college education. About
two-thirds of production supervisor
jobs in 2015 required a college degree,
according to a Harvard study, while only
16% of already employed production su-
pervisors had one.
Flight attendant Daniel Barela’s fa-
ther Daniel Barela Sr. can’t understand
why his children are struggling. When
he first moved to Albuquerque in 1984,
he was making $5.40 an hour as a custo-
dian. He doesn’t have a college degree,
but he worked his way up at his com-
pany and bought the house where Dan-
iel grew up. He and his wife now own
nine properties around New Mexico.
“My generation—we didn’t end the
week at 40 hours,” he says. “It started
at 40 hours if you wanted to be success-
ful, and we did whatever it took. This
generation —at 40 hours, they’re ex-
hausted. They don’t call it the Me Gen-
eration for nothing.”
The elder Barela has a pension, which
people in his role wouldn’t receive today.
And he acknowledges that housing is
more expensive than it was when he
was buying real estate. But he’s also been
surprised how hard it is to find someone‘It can take some
time for the
economic tectonic
pressure to build—
and now the volcano
is erupting.’
—RICHARD REEVES