The income of middle-class reached its highest level in 2016. America may be getting back on its feet but it remains to be seen if the policies of President Donald Trump can pull them up higher or bring them down again.
According to Washington Post, the average household income last year was $59,039, a 3.2% increase from 2015. It was also the second consecutive year that income recorded gains. The Census Bureau added that poverty rate dipped by as much as 12.7%. All signs point to an economy on the verge of returning to its healthy state before the financial crisis and recession happened in 2007. More Americans have availed insurance last year, which means that they are making better decisions when it comes to their finances.
However, issues such as wage gap still exist. Asians are making $81,000 per year, the whites $65,000 while the African Americans only earn $39,490. Trump vowed to cut support for the Affordable Healthcare Act which could result in more uninsured Americans. He also promised more jobs but the numbers reflect otherwise.
Fewer jobs were created during his first few months in power compared to the jobs created in the last few months of former President Barack Obama. The effects of the revised tax system, trade deals, and infrastructure projects have yet to be felt.
If the middle-class income has increased, then why is it that they are still struggling to buy a house? It may have been a case of changing priorities. Per Wired, the rising costs of houses and rents make it hard for middle-class families to afford them. “A family that makes $100,000 can’t afford to buy a house in most US cities,” says lawyer Mechele Dickerson, an expert in housing and middle class.
Economists also consider the “Airbnb effect”, a term used when landlords charge higher rates for short-term rentals. As a factor. The definition of an “affordable” home has clearly changed. Those who are looking for affordable one for first-time buyers and those who are looking for a reasonable upgrade do not have many options.
The Fiscal Times revealed the reason why developers are shying away from building affordable housing: rising cost of materials and labor. Experts claim that first-time buyers are still strapped with loans and credit issues. The rising income of middle-class families, if sustained, can help solve this issue.
In the end, there are small victories that need to be celebrated. However, challenges still remain and they threaten to wreak havoc if they won’t be dealt soon.
The bear’s eye view of two bear markets
The Dow Jones’ 200 count closed the week at 25. During the sub-prime mortgage crisis it peaked at 82 on...
The winners of the Online F10 FinTech Hackathon 2020
This year's F10 FinTech-Hackathon Zurich - the largest FinTech-Hackathon in Europe - had to be run online due to the...
Large-scale testing is the only way to reduce the spread of Covid-19
As the World Health Organization calls on countries affected by the coronavirus epidemic to test more, rapid diagnostic tests are...
How to pivot your small business strategy during the COVID-19 crisis
Creating a coronavirus crisis management plan for your business allows you to pivot your marketing strategy so you can offer...
The pandemic is just the trigger of an inevitable recession
So is the bear over? Many are proclaiming the bear dead because of this past week’s 20% plus rally. But...
- Biotech6 days ago
Hemarina offers its oxygen carrier molecule to fight the COVID-19 pandemic
- Crypto7 days ago
Could the sale of $11.3 million XRP by MoneyGram affect the Ripple Hodler?
- Business7 days ago
The COVID-19 pandemic is a catastrophe for the world’s economy
- Featured7 days ago
How did Pearl Harbor affect the Dow Jones?