The “middle-class squeeze” refers to the crunch many families are feeling due to economic changes over the last decade. Everyday expenses have been on the rise and purchasing power has decreased, especially for people in the middle class. In many cases, people feel like they just can’t keep up anymore. Here we’ll look at 11 items that everyone could afford 10 years ago that you might have trouble affording now.
1. Groceries
While inflation is going down, the price of everything is still going up. One place where many middle-class families are feeling the crunch is at the grocery store. In 2021, inflation was at its highest at 7%. Now, the annual inflation rate is sitting at 2.6%. It has slowed down, but prices are still much higher than they were pre-pandemic.
If you are someone who is struggling to afford groceries, there are some things you can do to decrease your bill at checkout. Switching to generic brands can help you trim costs. You might also consider couponing and shopping the sales. What’s most important is to go in with a budget and a plan. This will help you stick to what you can afford and decrease food waste.
2. Dining Out
Because the price of food has gone up, many restaurants have also had to increase their prices. Eighty-two percent of restaurant owners in the United States said that they upped prices in 2023. That includes your daily coffee. Starbucks reported a 4% increase in the average bill at their shops in the last quarter of 2023. As a result, many lower-income individuals and families are choosing to cook at home rather than eat out. It simply isn’t affordable to pay for someone else to make your meal. While people are choosing to save over spending money eating out, this could have long-term negative impacts on the restaurant and hospitality industries.
3. Utilities
In several Facebook groups, I’ve seen local families complaining about the increase in their utility bills, especially the electric bill. There have been some reports of prices increasing 3x as much as they previously paid. This is putting pressure on middle-class families. In 2022, electric prices went up 14.3%, which was twice the rate of inflation. As more people feel the squeeze of these rising prices, many middle-class individuals are looking for ways to save. In many cases, this means cutting back on other expenses. So, they aren’t spending as much on other purchases that might stimulate the economy.
4. Transportation
Inflation has a significant impact on transportation costs for middle-class families. The rising fuel costs, vehicle prices (both new and used), insurance premiums, and overall operational expenses all have an effect on the cost of transportation. Even if you decide to use public transit or ride a bike, you’ll pay more for items to be shipped or see increases in ride-share prices. Something that was affordable 10 years ago seems like it’s bleeding people dry today, especially in the middle class.
5. Housing
From August 2023 to August 2024, home prices went up 3.9%. The middle class is feeling the squeeze here too. If you didn’t own your home before the pandemic hit, it feels like you may have missed your chance for many Americans. It has become incredibly hard to save money if you are renting. My rent went up about $600 per month over the last four years. Many families have decided to opt for smaller homes with more affordable rent prices in less desirable areas just to keep a roof over their heads. More often than not, they are delaying homeownership or putting it off altogether. Just 10 years ago, buying a home wasn’t that far out of reach.
6. Healthcare
Like everything else, the cost of healthcare has been impacted by inflation. Medical services, supplies, and medications have all gone up. These increases are passed on to the patient through higher out-of-pocket expenses and insurance premiums. In some cases, it’s too much for middle-class families to bear. They aren’t able to access quality healthcare because it’s simply not affordable. God forbid they need some kind of prescription medication or necessary surgery. The costs are astronomical. As a result, many middle-class families are emphasizing physical and mental health to avoid going to the doctor altogether. While this isn’t ideal, it’s the only option for some people.
7. Education
Most middle-class families utilize the American public school system. Inflation has unfortunately put a lot of pressure on public school budgets, ultimately decreasing access to quality education. When it comes to higher education, the average tuition has increased by about 5.5% in the last year. As something that was already out of reach for many middle-class families, higher education has become somewhat of a luxury. Unless you’re able to get scholarships or grants, many people in this income bracket are forgoing college so that they can afford basic necessities.
8. Technology
You can’t really get by without technology these days. And guess what? Prices are soaring in that industry as well. Inflation has an impact on the raw materials needed to make laptops, cell phones, and other tech gadgets. While many middle-class individuals need technology to be able to get by, many of the products have become inaccessible from a price standpoint. Case in point: the price of a smartphone. Ten years ago, you could get a smartphone for about $287. Today, prices tend to be closer to $1,000 for the latest phone. It’s nearly impossible to keep up without going into debt.
9. Entertainment
There have been a lot of complaints about the price of entertainment in recent years as well. Prices of movie and concert tickets have gone through the roof. To see a movie in theaters, you’ll pay around $11.90 per ticket, sometimes more if you’re going at a popular time of day. The average ticket price for a concert sits around $123.25, which is a 34.3% increase from just five years ago. Never mind going out, even if you decide to stay in and stream some of your favorite shows or movies, streaming prices are up too. Middle-class families are finding it harder to keep up with the skyrocketing prices.
10. Clothing
As mentioned above, inflation has had a significant impact on the price of raw materials. As a result, clothing prices have gone up as well. For middle-class families, buying brand names was always a luxury, but now it’s almost not an option. More people are opting to shop at thrift stores or secondhand consignment shops.
11. Travel
Travel plans have also been impacted by inflation. Prices for hotels, airplane tickets, and other travel-related costs have gone up. Although airplane ticket prices have gone down since the pandemic, other costs have ballooned significantly. This means no more family vacations or choosing locations closer to home to explore. They might also look for ways to save through rewards credit cards and other travel hacks. However, many middle-class individuals are traveling far less than they used to.
Facing Middle-Class Struggles
The middle class has experienced a lot of challenges in the last decade. Inflation has put a strain on everyone’s finances, but this income bracket is feeling it. They aren’t traveling, they aren’t spending money on new technology, and they are doing everything they can to just afford the necessities. While it has created resilience and innovation in some cases, many people are wondering when this “squeeze” will let up.