**Inflation Has Unmasked the Depths of Our Affordability Crisis**
**by Ezra Klein, The New York Times, July 17, 2022**
**The numbers are startling. The median home price in 1950 was 2.2 times the average annual income; by 2020, it was six times average annual income. Child care costs grew by about 2,000 percent — yes, you read that right — between 1972 and 2007. Family premiums for employer-based health insurance jumped by 47 percent between 2011 and 2021, and deductibles and out-of-pocket costs shot up by almost 70 percent. The average price for brand-name drugs on Medicare Part D rose by 236 percent between 2009 and 2018. Between 1980 and 2018, the average cost of an undergraduate education rose by 169 percent. I could keep going.**
**We papered over the affordability crisis with low prices for consumer goods, soaring asset values that kept richer Americans happy, subsidies for some Americans at certain times and mountains of debt: housing debt and student-loan debt and medical debt that kept the working class semi-afloat. But none of this addressed the core problem. For far too long, the prices of the things we need most have been growing far faster than inflation....** [end quote]
Services that must be provided by local labor (construction trades, education, medical care, child care) increased dramatically in price. Goods that were produced by low-cost foreign labor or automation were suppressed in price relative to American labor-made goods (causing the loss of millions of U.S. production jobs).
This article has many examples of ways to reduce costs in many parts of the system.
But it doesn’t address the fact that any goods and services produced by American labor will be higher than globalized low-cost sources. And many services (e.g. elder care) can only be provided by local, hands-on labor.
The high inflation experienced by middle-income families is because so many necessary services are inflating rapidly.