The inevitable has finally caught up with us: the American Dream is no longer affordable.
There have been warnings for years that ‘the dream’ was getting farther out of reach, and according to a study put together by USA Today, a six-figure income is required to achieve what most Americans strive for. To be exact, Americans need to earn $130,357 annually, which was arrived at by calculating the cost of a family’s essential expenses, some extras, and taxes/savings. Also of note, that amount is what is needed for the average family of four — two adults and two children.
If $130,000 seems like a lot, that’s because to the average American family, it is. Even with two adults working full-time, that can be a target income that’s simply out of reach for most families. According to the U.S. Census Bureau, median household income between 2008 and 2012 was $53,046 per year, less than half of what the USA Today study calls for. While the economy has been picking up steam as of late, it’s still drastically different than the climate that led to prosperous years for the middle class during the 1990s.
The biggest issue and the factor that is really putting the ‘American dream’ out of reach for the vast majority of people, is that the middle class simply doesn’t have the financial power they did before. The cost of living has been skyrocketing over the past ten or fifteen years. Just about every standard purchase — whether it be a home or a pound of hamburger — has seen prices jump dramatically. Not to mention healthcare and transportation costs.