The rising cost of living has a growing number of people worried. A new CNN poll released today indicates that nearly 40% of Americans are unsure that they will have enough money to pay their monthly bills. More Americans expressed concern about their household finances in this poll than they did during the Great Recession.
Poll data show that people with household incomes of less than $50,000 were most likely to report that they worried about having enough money to cover their regular expenses. Inflation, housing costs, transportation costs, and grocery bills were among those expenses people most often identified as rising beyond their means.
According to Moody’s Analytics, people spend on average about $925 per month more than they did three years ago to make the same purchases. Although inflation has nearly returned to its pre-pandemic levels, prices for most goods and services have not. While some commodity prices have returned to previous levels, a higher cost-of-living is likely to be a persistent artifact of high inflation rates between 2021 and 2023. At the same time, for the average worker, cost-of-living changes have been entirely offset by increases in real income of more than $1,100 during the same period.
More than one-third of working adults who responded to the poll say that they have recently had to find additional work. That percentage is substantially higher for respondents who identified as Black, Hispanic, and workers under the age of 50. At the same time, Americans are also cutting back on discretionary expenses to help stretch their monthly income.
Data firm Technomic, which charts restaurant costs, revised its original restaurant pricing projections downward last month. Initially, the firm predicted a 5.3% increase in year-over-year pricing, but in June revised that projection down to a3.7% increase.
Cost-of-living reductions most likely for lower earning households
That’s good because people in CNN’s poll indicated that one way they intended to reduce their cost-of-living was reducing their spending on restaurant meals. Among other areas likely to see consumer spending cuts were streaming services, entertainment, and other discretionary spending.
The national poll is significant because it identifies an earning threshold of $50,000. People who make more than that are more likely to have options to help them deal with rising cost-of-living factors. Those who make less than that aren’t in the same position. Taking on extra work to maintain their lifestyles, or downgrading their lifestyles to accommodate their reduced buying power are their most likely strategies.
It also underscores the need for community colleges to get very realistic about the earnings potential of their academic programs. Until people can count on a substantial return on their investment in higher education, classrooms are likely to remain empty.
Photo Credit: Christine Vaufrey, via Flickr
