Why You Should Join the #MillionStudentMarch: Cost of Living
On November 12th, the Million Student March will be held on campuses across the nation. There are now over 75 marches scheduled, with many more to come! To find your local event and sign-up, visit studentmarch.org.
We have three demands:
- Tuition-Free Public College
- Cancellation of All Student Debt
- A $15 Minimum Wage for All Campus Workers
Angry Millennials fully endorses these demands and each week, we will cover one major reason why every young person across the country should be in the streets on November 12th. Last week, we focused on how both the minimum and median wages for American workers have been stagnant for the past forty years, despite massive productivity gains and technological advances. While this in itself justifies the demand for a $15 minimum wage, it only tells half the story. This week, we will focus on how the costs of our goods and services have increased at a rate far above wages and inflation. In other words, our Cost of Living.
HEALTHCARE
Despite the gains of the Affordable Care Act, which has helped millions of people get insured, the cost of medical services and medication continues to rise each year. According to a new study by the Center for Medicare & Medicaid Services (CMS), healthcare costs are predicted to rise by 5.8% each year through 2024, up from 4% during the period after the Great Recession. From 1990–2007, this annual increase was even greater: 7.3%. The issue here is obvious, as articulated by Tom Getzen:
“Is what we’re paying for health insurance premiums going to go up faster than wages? That’s really the problem. Every forecaster I know says eventually that excess has to stop.”
While he is correct that rising health insurance premiums are an issue, the affordability of prescription drugs is another major stressor on stagnant American incomes. The same CMS report also finds that prescription drug costs soared 12.6% in the past year. A recent Consumer Reports survey found that respondents paid an average of $39 out of pocket for medication, while 10% indicated that they paid $100 or more.
If our wages are stagnant, how can we pay the rising costs of medical services and prescription drugs?
The Consumer Reports survey found that among those who experienced a price increase, 1 in 4 were unable to afford their medical costs, 21% missed a major bill payment, and 18% were unable to afford gas for their car. What other sacrifices did they make due to rising drug costs?
This chart really shows the desperation of everyday Americans when the costs of necessary prescriptions is unaffordable in one of the most advanced nations on Earth. 24% of those who experienced a price increase skipped filling a prescription and 18% did so without consulting their pharmacist or physician. The same percentage also took an expired medication or cut pills in half without consulting their pharmacist.
While there are a myriad of proposed solutions which would help combat the rising cost of healthcare premiums and prescription drugs, an increase in our minimum wage to $15 per hour would help alleviate these issues that are causing sick people to cut corners and limit their medicine intake.
HOUSING
If you live in a major metropolitan area, such as New York City or San Francisco, you are probably aware of the rising rents in our nation’s urban areas, far outpacing our incomes. According to a report released by Zillow this past April, rents have increased by an average of 4% since last year. In some cities, such as San Francisco, Denver, and San Jose, this increase was over 10% from the year before. Svenja Gudell, senior director of economic research at Zillow, understands just how unsustainable these dynamics are:
“This is here to stay. We will continue to see rental increases, and affordability will worsen before it gets better. Income hasn’t kept up with rental increases. You are having to spend much more your monthly income on rent and it’s a concern. It’s a national concern.”
This helpful chart from Forbes illustrates the rental increases found in this study. Take a look at how many major cities are above the 4% average in rental increases:
What is the reason for this increase? In an earlier article, we examined how home-ownership rates are very low among Millennials, but this trend isn’t just true among young people. The US home-ownership rate is at a 48 year low among all age groups. Thus, demand for renting properties is high, causing the spike in rent payments:
According to the Wall Street Journal, economists consider a household cost-burdened when at least 30% of its income is going straight to rent. As you can see from the above chart, this is now the average rather than anomaly in the United States, which is a huge problem for low-income Americans and the shrinking middle class. In the words of Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley:
“Rents have skyrocketed so much and incomes haven’t kept pace, so we have an affordability crisis in some of our major metropolitan areas for the middle housing market.”
CHILDCARE
The cost of childcare is very important in an economy where many low-income parents have no choice but to work multiple jobs with unpredictable shifts. Unfortunately for them, even these costs have skyrocketed in recent years. A new report from the Economic Policy Institute, finds that high-quality childcare is out of reach for most families earning the minimum wage in every single state:
Even in states with the lowest cost of childcare, such as Arkansas, Tennessee, and South Dakota, a parent working full-time at a minimum wage job would need to spent over 30% of their annual income on child care for their 4-year old. This also assumes that the parent is working 40 hours a week, 52 weeks a year, which isn’t the case in many of these positions. Cities such as New York City, Chicago, and Washington D.C. have instituted universal Pre-K precisely because these costs are out of reach for low-income families.
Infant care also shows a similarly bleak picture:
In each state, parents earning the minimum wage would have to spend at least 32.2% of their yearly income to pay for care for their infant while working long hours to raise a family. How can anyone making the minimum wage afford this?
Even as a share of median income in many metropolitan areas, EPI found that childcare costs for two children were well above the 10% Affordability Standard set by the US Department of Health and Human Services (HHS):
This one final chart, created by Emily Cohn at the Huffington Post, shows that both the price of both childcare and college tuition have literally skyrocketed off the charts compared to other goods and services. Here we also see that while the price of appliances and personal computers are falling below the median income, the cost of hospital services, unleaded gas, and energy are all out of reach for many families.
The cost of many services essential to the health of our friends and families are quickly rising, while our wages have been stagnant for generations. Millions of people are working multiple jobs just to make ends meet, while struggling to take care of their families. We are worth more, and need a $15 minimum wage across the country, especially in cities where renters are paying much more than 30% of their income to rent. No, we aren’t being greedy in thinking we deserve more, we are simply trying to keep pace with the rising costs of our lives.
Our education system is broken, and we are paying higher tuition each year for an education which is increasingly not helping us in the job market. However, we can’t give up. Students across the country must fight for a $15/hour minimum wage to rise the income of all workers. We must eliminate the tuition of public universities to provide an opportunity for all members of our society to obtain a higher education regardless of income. Finally, we must abolish student debt, because a large percentage of our generation has been robbed of our economic futures.
This isn’t impossible. We start on November 12th at the Million Student March. Sign up and find your local event at StudentMarch.org.
We are more than our degrees and job titles. We are not a loan. The time has come for us to stand up and fight back!
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Originally published at www.angrymillennials.com on October 22, 2015.
