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so if you're finding that you just do

not have enough money the middle-class

squeeze might be the problem how's it

going today guys welcome back to the

channel hope you're having a great day

so far so in this video today we're

going to be talking about a phenomenon

known as the middle-class squeeze and it

is one of the primary reasons why people

are in a situation today where they are

paycheck to paycheck or they have a ton

of consumer debt because they just can't

seem to afford to live and be a part of

the middle class and I'm sure you've

also heard before people claiming that

the middle class is disappearing this is

another one of the primary reasons why

people are saying this and I'm going to

show you guys exactly why that is today

so essentially the middle-class squeeze

has to do with two different economic

components number one we have wages or

how much people are making for their

labor on average and then number two we

have inflation and if you're not

familiar with inflation that is the

increase in prices or overall decrease

in buying power over a certain period of

time and an easy way to explain that as

bread is more expensive today than it

was 20 years ago or even a hundred years

ago because of inflation and so

essentially what we are seeing is that

wages are stagnating wages are

relatively flat while inflation is

increasing and it leads to this

phenomenon known as the middle-class

squeeze now we're going to go ahead and

analyze some numbers here in a little

bit but what I want to do first is give

you a visual example of what this looks

like and the best way that I could think

of this is by using a bucket so

basically think about it like this wages

are the amount of water that's being

poured into this bucket and then there's

a hole at the bottom where water is

leaking out and what we are finding is

that because wages are relatively flat

it's like the same amount of water being

poured into a bucket every single day

with a larger and larger hole being

drilled at the bottom because of

inflation you're spending more money on

clothing and gasoline and food at the

grocery store and so overall your buying

power is shrinking and shrinking so you

may not see the difference in your

paycheck because you're earning the same

amount of money but because of inflation

because of the increase

the prices and the deterioration of the

buying power your dollar is not getting

you as much as it was five or ten years

ago now in the past this wasn't a

problem at all because wages were

keeping up with inflation yes things

were more expensive but wages were also

increasing to offset that expense and

you didn't have this problem here of the

bucket shrinking in terms of the amount

of buying power that you have and one of

the most interesting things about the

middle-class squeeze is that it does not

seem to have the same effect on the high

income earners high-income earners are

still continuing to see growth of their

wages it is only for the most part this

middle class category that is seeing the

stagnation of their wages so it's

something that doesn't effect the higher

class or the upper class in the same way

that it affects the middle class so now

what I want to do I want to jump over

and show you guys the actual numbers and

what the middle-class squeeze actually

looks like and as we're going through

those numbers visualize this bucket

example to help you understand why it is

that people have less and less money

even though wages are staying about the

same all right so the first piece of

data I want to show you guys is the real

median household income in the United

States coming from Fred this is an

economic research part of the Federal

Reserve Bank of st. Louis and it's a

really good source for economic data to

give you an idea of you know what

exactly is going on and this depicts the

problem right here as you can see here

back in the 80s there was a period of

time where there was some decline but

overall we saw an increase in wages or

medium household income in the United

States now from 2000 to 2007 to 2008 era

it declined and then rallied again and

then we had a period of time where

median household income just declined

and now we are again in a period where

it has increasing but essentially

adjusted for inflation here the median

household income in the United States is

about the same as it was in 1999 as it

was in 2016 just slightly higher in 2017

so we went from having periods of growth

of median household income as we saw

here to basically stagnation in way

if not a decline and then this right

here is another key contributor to this

middle-class squeeze and that is the

fact that the price of college is

increasing almost eight times faster

than wages so when prices are increasing

the hole in the bottom of that bucket is

getting larger and larger with the same

amount of water going in you're going to

have less money or less buying power

overall and this right here is another

piece of data I want to show you guys

this is the house price index for the

United States so despite the fact that

wages have been flat for the better part

of the last 15 to 20 years the prices of

homes aside from what happened in 2009

have been on the increase and so it's

becoming harder and harder for people to

have enough money to purchase their

first home because wages are flat

college tuition is on the rise home

prices are on the rise and all these

different factors tied in together are

essentially what is causing the

shrinking of the middle class or the

middle-class squeeze alright so what I'm

gonna say about all this

is this right here if you are broke and

if you're finding that you do not have

enough money to pay for bills or

whatever lifestyle you're looking for

it's probably not your fault if you're a

part of the middle class because of the

middle-class squeeze but it is your

fault if you decide to do nothing about

it and what I mean about that is there

are ways to figure out how to make more

money you could learn different skills

and there are so many different ways to

make money today especially with the era

of the internet and so I'm gonna say

that you do need to figure out how to

make more money if you are a part of

this middle class that is getting

absolutely squeezed out and what's

interesting to me as well as that the

middle class today is very different

than what the middle class was you know

30 or 40 years ago today being a part of

the middle class means that your

paycheck to paycheck

you're in debt in most cases you have

student loans you have a very basic

living extensions and maybe you go on

one vacation per year if you are lucky

and if you do it's probably going on a

credit card you see 30 or 40 years ago

the middle-class meant that you had

great employment you had surplus income

you had emergency fund you had college

savings you were saving for vacations

you were not paycheck to paycheck

but affordable health care and so the

middle class today is like what the

lower class was thirty or forty years

ago it is not the same as it was back in

that point in time and it's really not a

desirable place to be at all at this

current day and age so anyways guys that

is gonna wrap up this video I thought it

was interesting to look at the

middle-class squeeze and understand this

unique problem let me know what you guys

think down in the comments section below

drop a like on this video if you enjoyed

it and subscribe if you are new to my

channel and as always I hope to see you

guys in the next video

#Best Education Page #Online Earning

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