I am not psychologically comfortable with the idea of leaving paid employment if I have any debt whatsoever. I need to get rid of all debt before I retire.
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Agree. We needed to get rid of all debt before retiring for our peace of mind. One of the people profiled in the article retired early and has a $1400 monthly mortgage.
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I think getting the definition of upper middle class is important. Moreover, everyone is impacted by inflation at every level. Whether they are struggling depends on what part of life they are in and what their job/house/college/other major costs are. Even people who have lots of disposable income can see prices have risen sharply on nearly everything.
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No doubt there. How much one is impacted will depend upon if their income has risen proportionately to what they spend.
With that in mind, Iād expect retirees on a fixed income to have the biggest problems - that and those who didnāt get wage increases.
Yes. My Dad is really struggling. Heās 86. Retired young and is very healthy. But you know social security isnāt a great safety net. He still owns his own home and thatās expensive. Taxes are crazy. He doesnāt want to do a reverse mortgage or something to increase income. He feels every blip of oil prices and restaurants increasing.
On the other hand we are upper income, my spouse got a great raise ( I think 8% this year) and I raised my fees. Still, itās hard to pay college in full and prices have risen on some crazy things. Iām sure the 8% isnāt enough to keep up. Iād say inflation has raised most prices 30%.
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This is where one canāt always use percentages effectively. An 8% raise on a 100K income is 8K. A 30% increase on a loaf of bread costing $2 is 60 cents. Yes, it bites into the budget, but how many loaves of bread does one need to buy? 8K will cover a lot of them.
Percentages correlate the most on the big ticket things like mortgages/rent and cars.
Itās part of why reducing taxes across the income ranges donāt give the same results. A 10% decrease only gives the person paying 3K, $300 extra. The person paying 100K gets 10K. One can buy a heck of a lot more with 10K than $300, esp since ābasicsā like that $2 loaf of bread take up more of the lower wage earnerās budget to begin with (usually).
The fact that we (personally) buy so little definitely helps us even with prices increasing.
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Yes, totally agree if you use bread. But 30K and 300K also buy other things. But I think mostly everything ( except mortgage and car payment) have gone up for us. The little things, the big things all of it. Whether 30K or 300K, most of us are going to spend it or invest it. We are at the part of life where most is being spent ( college years). College has gone up. I didnāt check last years price but the 8% got eaten up.
Hey, Iām thankful. I really am. I think it would be downright scary to be in an income bracket where I had to make serious food choices. Lots of people are there now.
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Ditto. Iām thankful for it daily and have worked to keep various charities in our budget to try to help others who arenāt.
The other helpful thing for us is our income āincreasedā significantly when our last kid graduated collegeā¦ All three are self-supporting on their own now. We pay for them to join us on some trips if they want, and we also feel thankful that we can do that.
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https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=100&year1=202106&year2=202206 says that CPI from June 2021 to June 2022 went up 9.06%.
Of course, what you buy could be more or less affected by inflation than the mix represented by the CPI.
The āupper middle classā is probably less likely to be benefiting on the income side than some others. Lower income workers who upgraded from $8 per hour to $15 per hour jobs are some of the better known beneficiaries ā of course, their increased pay is an embedded cost in a lot of services that most people buy. Businesses that have fewer supply chain problems than their competitors are probably benefiting if they can now sell product at higher prices due to reduced supply because their competitors cannot ship product.
People with fixed rate debt also benefit as inflation reduces the principal of the debt.
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Looking forward to those days. Our plan is to pay as we go. Can do that. Inflation does make it harder because it takes away discretionary income. But compared to most, weāre in great shape.
The food bank by us has more consumers and less food. Always happens in recessions/Covid/bad weather. It can get scary for people.
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The day I sit around and commiserate with people about how the price of eating out is gotten too expensive and that the price of gas is so high, etc is the day I will find new people to be around.
Have none of you ever been poor? I will say I was lucky enough that when I grew up we didnāt have the electric or the water turned off, but there were some tough times. Mom used to go grocery shopping on Thursday afternoons because she knew the check wouldnāt clear fast enough until Dadās check was deposited on Fridays. Eating out at a restaurant was only for special occasions.
Letās face it the average age of the posters here has to be around 50. Most are professionals. Most own our home on fixed rate mortgages. Probably refinanced to something under 3%. So if you arenāt moving the housing bubble didnāt affect you. So $0.60 more for a loaf of bread isnāt affecting anyone.
Also short staffed is just code for I donāt know how to run a business. Or just an excuse to provide less/crappy service. The only reason a house doesnāt sell is because it is priced too high. The only reason a business canāt hire people is because they donāt pay enough. And the first person that says well people donāt want to work can go to he-double hockey sticks. Because they have been saying people donāt want to work for over 100 years. That is a fact. And if your business canāt absorb the increased cost of labor then you donāt have a viable business.
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Indeed, inflation is reducing the principal of that fixed rate mortgage without any effort by the borrower.
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Lots of assumptions here. My spouse runs businesses. He has open positions available paying more than 175K. Guess what, not all positions can be filled. Esp in knowledge industries. Same for line cooks, not many want to do the job ( at any price).
Same going down to the restaurant/fast food level. In some cases, yes, pay more and get someone. But a small restaurant canāt pay people a huge hourly without going out of biz. And knowledge workers arenāt always available esp in industries which are growing really fast. Try to hire in lots of areas by me and you can pay $$$$$ for a job like installing solar panels and still not find someone. Our geothermal guy said he could not find people who work hard labor any more. He was paying as much as a plumber (over $100/hour). Thatās a lot, imo.
If youāve run a business and never had issues with shortages, great. Iāve run several businesses and so has my spouse and itās a tough thing to gauge.
Isnāt that what this thread is talking about?..;0. I donāt know what else weāre doing.
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If you canāt get labor then you donāt have a business. It is that simple. Everyone has a price and the quotes about not getting anyone at any price is BS. Go find a current line cook and offer him more money. Many will come.
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Leaving the place they already work at short staffed? What does that solve?
There truly is a limit to how much people will pay for a burger.
But yes, I grew up considerably less than wealthy, esp since my parents divorced and each ran a household instead of one household with two (teacher) incomes. Itās why I have as much empathy as I have for those actively trying to do something to better their lives regardless of where they come from. I have less empathy for those sitting on their rear ends complaining.
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Well, Iām not in the restaurant business.
But, you can actually have a great business and not be abel to get people. Every business owner knows this. In fact, needing more people means your business is doing well.
We have loads of friends who own all types of businesses and everyone is having trouble getting workers. Lots of different industries too. You can easily look it up. Happening in every state. Raising wages might work at McDonalds. But if you need someone with expertise or to do something unpleasant you likely wonāt find them at any price. Ask someone who owns a business who canāt hire right.
This constrains the economy to and reduces GDP. Lots of articles out there on the reasons. I think its partly lots of people retired during Covid and many people are working from home. Also unemployment is under 5%. So people are already working.
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Many went out on their own doing gig stuff and found they donāt care for the rat race.
Hence, why immigrants got many of these jobs throughout history. They needed something and were willing to do practically anything from building train lines to slaughterhouse work to housekeeping. People who can do other things usually prefer to (not always, but usually).
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My daughterās office had a meeting about their wages not keeping up with inflation and they were all promised that it would be reviewed and to āstick it out.ā I donāt believe that the company will come through. She just passed her 4 year mark this week, and her 401k vests at 5 years. I think she will then leave, and I think the employer knows that other companies are paying more. She also makes significantly less than a male engineer who has the same job, and the employer knows that too. Sheās at the lower end of the UMC this article talks about. Just bought a house (and certainly feels the pinch for every piece of tile, every bucket of paint, every 2x4 she buys). Unlike retired people making ~$100k, she does have to buy work clothing, gas, dog food, buy stuff for her house.
I think employers are going to see employees leaving for higher paying jobs if they canāt keep up with the pay and benefits, from low level hires to executives.
I agreed to another year of Americorps and we do get paid a stipend, but it isnāt even minimum wage. I do it because I wanted to volunteer, but I really can leave and get paid a lot more with an entry level wage. It is tempting to just get a job that pays $25/hr (min wage here is $15.87 and almost all jobs pay more than that).
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Sound good, Iām thinking of getting a job and do nothing to get paid. Thereās a vacuum I need to fill it.
The general trend right now in technology firms ( East and West Coast) is to boost wages and benefits like stock options (preemptively) to keep key employees from leaving. At the same time, bad economic news means that many are trying to move quickly before the economy goes into full recession. Itās mostly mid tier employees who havenāt benefited as much from higher incomes and still have huge student loans. I wonder if other industries are also facing preemptive demands for raises given how high inflation is.
Lots of these young adults are in the UMC by the 75-135K definition. Most in tech are in higher income categories but living in HCOL areas, they are not doing great.
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