By Autumn Spredemann
Oscar Taylor is scrambling to cover household expenses for the first time in his adult life.
“It has gotten so dismal that my wife is planning on looking for work after the new year,” said Mr. Taylor, owner of Barrett Rifles in Sioux Falls, South Dakota.
He said his wife hasn’t had to work a job since the birth of their first child nearly seven years ago.
Sioux Falls has additional challenges. The city has a population of about 200,000 people, and Mr. Taylor said it’s been hit by a “slew of layoffs.”
This is compounded by the “ever-increasing prices” of grocery staples like eggs, milk, and bread. Mr. Taylor says some everyday items have nearly doubled in price over the past few years, and wages aren’t keeping up.
The Taylor family isn’t alone in the struggle.
One survey noted 70 percent of Americans are feeling stressed about their personal finances. And an August analysis revealed that 54 percent of mothers have a hard time finding a job that accommodates the dual task of raising children.
“We have had to make the choice. Pay our bills or save money. We’ve obviously chosen to pay our bills, but had to stop contributing to our retirement fund for the time being,” Mr. Taylor told The Epoch Times.
It’s a decision many Americans now face: choosing near-term survival at the cost of their future.
One in every three U.S. workers says they’re “significantly behind” on retirement savings, according to a September Bankrate analysis. Nearly a quarter of Americans couldn’t contribute to their retirement savings at all in 2022 or 2023.
John Lin, owner of JB Motor Works in Philadelphia, said he’s felt the “downward trend” of the U.S. economy on multiple levels.
“As a small business owner, saving money has always been a bit of a challenge. But it’s certainly become much harder with the increased cost of utilities, rent, and other general expenses,” Mr. Lin told The Epoch Times.
“The pie has effectively gotten smaller, while slices needed from it have gotten bigger.”
Mr. Lin said that with the increased cost of car parts for his business over the past year, he’s been forced to increase service prices. But, he also sympathizes with his customers, since he’s in the same boat, paying inflated prices on everything from food to housing and utilities.
“Besides increased service costs, we’ve seen decreased customer visits as people now try to cut back on expenses and are more hesitant to invest in car repairs. As the owner, that directly affects my income stream and overall financial stability,” Mr. Lin said.
Small businesses are considered a barometer for measuring the economic health of a nation. The Biden administration announced more than 10 million applications for new small businesses between 2021 and 2022. Yet, as with most numbers, it doesn’t capture the reality for many business owners.
Last year, high inflation threatened to close 65 percent of American small businesses. Even with lower inflation this year, more than half of U.S. business owners say it remains their number one challenge.
“To be sure, the high inflation of the past 2-plus years has done lots of economic damage,” Mark Zandi, chief economist at Moody’s Analytics, posted on X, formerly Twitter.
Mr. Zandi said that in July this year the average American household spent $202 more than in July 2022 and a staggering $709 more than July 2021.
Research shows just 43 percent of U.S. adults have enough in a savings account to cover a $1,000 emergency bill. In August, 61 percent of adults said they’re barely making it between pay periods, according to a CNBC poll of 4,000 people.
Pennsylvania resident and owner of F&J Outdoor, Wendy Wang, can relate.
She said her household finances have become—as for many others—a source of worry. “The price increases in basic household items such as groceries and utilities have definitely thinned our savings and continue to exert pressure on personal budgets,” she told The Epoch Times.
“My business has certainly felt the sting this year. The increased cost pressures have influenced our profits and growth. We’ve had to adjust by re-evaluating our inventory and procurement strategies and exploring innovative methods to remain competitive in a challenging market.”
Mr. Taylor said he has also suffered a significant drop in his business this year.
“We have seen nearly a 50 percent decrease in sales when compared to the same time last year. I attribute this to people not having the extra cash and feeling more wary than ever to spend money on non-essential items.”
Concurrently, U.S. consumer credit card debt reached an all-time high in the second quarter of 2023 at $1.03 trillion. That’s a $45 billion spike between the first and second quarter this year.
Mr. Taylor believes there’s only one logical solution to this problem. “We need our wages to increase, at least with the cost of living. They’ve been stagnant for years now, while prices have skyrocketed. The math doesn’t add up.”
The affordable housing crisis adds another layer of burden to America’s growing economic woes. While the U.S. Government Accountability Office says housing is a “long-standing challenge,” it’s gotten harder since the end of the pandemic.
“The housing crisis is noticeable and touching many people’s lives,” Ms. Wang said.
“In fact, a few close associates have had difficulties securing affordable housing in recent months, which resonates with the problems that many Americans are currently facing.”
One study revealed more than 40 percent of renters qualify as “cost burdened” by housing, which is defined as an individual who spends more than 30 percent of their monthly income on housing. The news is equally dismal for prospective home buyers, who’ve witnessed house prices outpace wage growth in 80 percent of U.S. real estate markets.
Mr. Lin said some of his employees are facing housing issues.
“It has been challenging for them to cope with inflated house rents and prices,” he said. “Affordable housing is indeed a crisis.”
Chief economist at ADP, Nela Richardson, said, “Housing used to be thought of as the path to creating the middle class. If housing is becoming exclusive, what supports the middle class in terms of wealth creation?”
The overwhelming combination of factors has contributed to a sense of hopelessness spreading within the country.
This is reflected in a news poll showing more than half of surveyed Americans believe the economy is in a downturn or getting worse. In that same analysis, 59 percent of U.S. voters disapproved of how President Biden is handling his job.
Min HwanAhn, attorney and owner of the Law Office of Ahn & Sinowitz, told The Epoch Times he’s noticed a recent uptick in inquiries related to job loss, wage reduction, business closures, and bankruptcy filings. When factoring this into the U.S. economic outlook, he said, “This indicates that people’s financial situations have been heavily impacted.”
Nearly half of Americans think the economy will worsen in 2024, according to a Wall Street Journal-NORC survey.