WSJ headline: The Upper Middle Class Is Getting Squeezed
Sub-headline: The first two years of the pandemic were good for the group’s savings and investments, but 2022 isn’t
By Dion Rabouin | Photographs by Dina Litovsky for The Wall Street Journal
July 25, 2022 5:30 am ET
https://archive.ph/FCUZj
Mark Yu had a profitable pandemic. Like many Americans, he added to his savings and pulled in big gains from the stock-market rally. He purchased a house in his new hometown of McAllen, Texas, then a duplex and an eight-unit apartment complex in Cleveland.
But 2022 hasn’t been so kind. His expenses have grown because of higher costs for gas, groceries and the dog food for his four German shepherds. The value of his stockholdings is shrinking. He is sending more money back to his family in the Philippines to help them cope with rising prices there. A cracked foundation in his new house cost tens of thousands of dollars to repair.
Mr. Yu, a 33-year-old who has lived in the U.S. since 2014, is now taking on credit-card debt and typically working seven days a week. Previously, he was socking away as much as $3,000 a month into a brokerage account. This year, a couple-hundred is the most he had been able to muster and he hasn’t put anything in for the past three months.
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Kern Barrow retired in 2018 as a physician assistant. Last month he returned to work part-time, driving vehicles for a car-rental company three days a week, so he could stop making withdrawals from his declining retirement accounts.
“During the pandemic I saved a lot, was able to bank a substantial amount of money,” said Mr. Barrow, 69. Now, “I’m drawing on that savings this year more than adding to it.”
Mr. Barrow has also cut back on driving, all but cut out restaurants and shopping, and is now less generous with his granddaughters, ages 12 and 16. He also traded in his Dodge Challenger for a hybrid sedan to save on gas.
They tell us 70% of households live paycheck to paycheck. They are the ones most squeezed by rising gas and grocery costs. If that budget includes a significant savings program, yes, that too will be squeezed. But of course not like for those who find inflation takes food off the table or causes them to lose their home or car. Homelessness is expected to rise.
There is also the wealth effect. When stocks are doing well those with big paper profits are likely to spend more on extras like vacations or luxuries.
Declining stock market reduces paper profits. That tends to impact things like yacht sales or luxury vacations. And that can result in layoffs in some industries.
They tell us 70% of households live paycheck to paycheck. They are the ones most squeezed by rising gas and grocery costs. If that budget includes a significant savings program, yes, that too will be squeezed. But of course not like for those who find inflation takes food off the table or causes them to lose their home or car. Homelessness is expected to rise.
Food Banks nationwide are experiencing a rise in their visits. From May of this year:
WSJ headline: Food Banks Are Serving More People Again as Inflation Squeezes Budgets
Sub-headline: Higher costs and supply-chain problems are straining organizations as they look to meet rising demand
By Talal Ansari | Photographs by Sylvia Jarrus for The Wall Street Journal
May 2, 2022 6:30 am ET
https://archive.ph/SrFJu#selection-215.0-225.174
Food banks are straining to meet growing demand caused by rising food prices, which are pinching budgets for households and the organizations themselves.
Forgotten Harvest, which serves the metro Detroit area, said demand increased 25% to 45% since December in different areas it serves. In March alone, demand rose 30% compared with the previous month.
Christopher Ivey, a spokesman for the food rescue, says metro Detroit is at the front of the bell curve, experiencing economic ripples before they hit other parts of the U.S.
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