this post was submitted on 09 Jul 2024
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72
US workers in debt to buy groceries - 'I had to downgrade my life' (www.bbc.com)
submitted 4 months ago by yogthos@lemmy.ml to c/news@hexbear.net
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[–] came_apart_at_Kmart@hexbear.net 17 points 4 months ago (2 children)

“We’re on the right track,” says Sarah Foster, who follows the economy for Bankrate.com. “Wage growth has slowed, price growth has slowed but, you know, prices are slowing at a much faster rate than wages.”

good god, what a tortured statistic to hang your hat on. prices are going up, but slower. wages are going up, but slower. and the rate of slowing for prices is faster than the rate of slowing for wages, on average. so, it's a good "direction" we're moving in, on average. of course, it's awesome that they pull a quote from an advertiser for insurance products and personal lines of credit.

how about: interest rates are insane and basically everybody is accessing unsecured lines of credit to cover ballooning rents/costs of living, so the juice they are paying just to stay fed and in a shelter is going to hit them like a hammer.

[–] Assian_Candor@hexbear.net 10 points 4 months ago (1 children)

Payday loan apr is like 120% or something, feel really bad for that lady using them to buy food, it's the definition of unsustainable

[–] came_apart_at_Kmart@hexbear.net 9 points 4 months ago (1 children)

yeah that lady's situation is super depressing. payday loan places should be banned outright and small, short term lines of credit should be issued by the postal service at like cost. but the short term loan industry lobby is apparently one of the most potent forces on the hill, so I guess we're gonna have to loot them all, nationalize their holdings, and burn down their houses before roasting their bodies in the ashes because they made reform impossible.

so sad.

[–] GrouchyGrouse@hexbear.net 3 points 4 months ago

The money tree caterpillar should be shot by the NKVD

[–] freagle@lemmygrad.ml 6 points 4 months ago (3 children)

Interests rates are not historically insane though. My parents bought a home when mortgage interest rates were in the mid 10s. The interest rates aren't the problem. It's the ratio of the cost of living to wages that's gotten to insane levels.

[–] porcupine@lemmygrad.ml 8 points 4 months ago* (last edited 4 months ago)

the problem with interest rates was abruptly jacking them from 2% to 7% when there's barely any houses for sale, and every "starter" house that comes on the market in my area lists at nearly triple what it sold for a few years ago. it means that anyone that bought or refinanced property during the worst of the COVID pandemic will get a life changing wealth transfer paid for by everyone that doesn't own property.

someone who bought a $100k house with 20% down and a 2% interest rate in 2021 would pay $20k cash and around $126k total over 30 years. someone trying to buy the same property today at $300k with 20% down and a 7% interest rate would be paying $60k cash and around $635k over 30 years.

every realtor I talk to says the same thing: "this is just the way things are now. it's not going to get better. you can either buy now and struggle for the rest of your life, or wait and be priced out of the market forever."

[–] came_apart_at_Kmart@hexbear.net 8 points 4 months ago

yeah, wages, housing inventory, housing prices compared to wages, public sector spending on social programs, stable employment, and consumer good inflation were all different back then too. one might say the fundamental material conditions of those earlier times were less bleak for workers.

which is why boomers all bought houses even at 7%.

borrowing 2-3x your salary at 7% is way different than borrowing 8-10x at 7%.

the rapid spike in interest rates is completely kneecapping already struggling people, because taking on debt hurts much worse in a credit crunch.

[–] Tunnelvision@hexbear.net 3 points 4 months ago

Yeah that home also only cost like $20,000 which is basically nothing.

[–] freagle@lemmygrad.ml 14 points 4 months ago

I really think there's a bourgeoning crisis here but there's just not enough solidarity for everyone to see it happening to everyone. There are farmers in my area charging $8 for a dozen eggs. I don't think they're getting rich, I think they're desperate and some are choosing to make money from the rich because the masses don't have enough money to keep the farmers in business.

It's getting to the point where nearly every new person I meet is in some form of financial decline. Meanwhile there's a capital glut.

[–] peeonyou@hexbear.net 14 points 4 months ago

25% inflation outpaced the historic 20% raise in wages?

uhhhh

who here is making 20% more since the pandemic?

[–] EmoThugInMyPhase@hexbear.net 7 points 4 months ago

But… what about the jobs created? What about the stock market!