'Affordability' is no joke, but more than prices

The topic of affordability reminds me of a favorite doo-wop song from the 1950s: “It Ain’t the Meat (It’s The Motion).”

As for as the current subject, “it ain’t the affordability, it’s the income.”

The affordability debate has focused on prices, but affordability also depends on wages. Today’s affordability crisis actually stems from the long-term suppression of workers’ pay – especially when comparing the growth in workers’ income to the growth in productivity (and therefore profitability).

President Trump isn’t having it. At a Cabinet meeting this month, he dismissed the concern, saying, “The word ‘affordability’ is a con job by the Democrats. The word ‘affordability’ is a Democrat scam. [The word] doesn’t mean anything to anybody.”

He told a different story during the 2024 campaign when he promised to end inflation and make housing, energy and consumer goods more affordable. But thanks to tariffs, Department of Government Efficiency (DOGE) cuts, reckless spending and sheer incompetence, the regime has exploded the national debt and budget deficit, inflation has gone up since he took office in January, unemployment has increased, consumers are seeing higher prices at food stores, small businesses are seeing increased costs of operating, and more Americans believe Trump has been worse for the economy.

This month will see another result: holiday shopping. A Price Waterhouse Cooper survey shows that U.S. consumers plan to spend about 5% less in seasonal spending compared to last year – the biggest decline in five years, and the global accounting firm of Deloitte forecast that overall holiday shopping will grow between 2.9% and 3.4% compared to 2024’s increase of 4.2%.

Those aren’t outliers. The Conference Board reported that its Consumer Confidence Index declined to 88.7 in November from 95.5 in October – a 7.1% drop. Over the last five years, according to Gallup’s Economic Confidence Index. Americans’ confidence in the economy has fallen from a positive of 40 to a negative 30.

A Fox News Poll on Americans’ views on affordability shows public perceptions of what has “increased a lot” – 24% of us think that of gas, 60% say that of groceries, and 42% think housing costs have increased a lot.

That’s logical since in the last 10 years, according to the Bureau of Labor Statistics, the price of gas has increased 33%, groceries (“food at home”) is up 66%, and housing (for existing homes) is up 44%.

Moreover, economics journalist G. Elliott Morris of the news site “Strength in Numbers” this month reported that Americans’ concerns about affordability go beyond just price, as people worry about fairness, the possibility of getting ahead, and economic inequality.

It’s not new either.

“For more than four decades, employers have been actively suppressing the wages of working people, so that corporate managers and owners can claim an ever-larger share of the income generated by what workers produce,” says Heidi Shierholz of the Economic Policy Institute. “Government policies facilitated these efforts.

“Policymakers allowed labor standards such as the minimum wage to erode (and reduced enforcement of the standards we do have), blocked adequate protections for workers’ right to organize and promoted macroeconomic policy that allowed unemployment to remain too high for long periods, undermining workers’ leverage.”

There are areas where government could enact affordability policies:

*  stronger labor laws,

* a higher minimum wage,

* macroeconomic policy that keeps unemployment low,

* a stable social safety net that keeps families out of poverty when they lose a job or get sick, and

* (although setting prices results from several factors) enforcing existing anti-monopoly regulations could help discourage price-gouging.

 

Improvements in these areas are popular, too. For instance, unions are as popular as they’ve been in decades, and Americans overwhelmingly back higher minimum wages.

“What policy can do is ensure that the labor market delivers rising incomes, through better labor standards and collective bargaining rights, through macroeconomic policy that helps ensure a full-employment economy and boosts workers’ leverage, and through social policies that fill the gaps the market leaves behind,” Shierholz says. “As lawmakers grapple with the cost of living, they need to remind Americans – again and again – that pay is a policy choice. Making life more affordable means not just lowering prices where possible and necessary, but raising wages. True affordability comes when working people earn enough to cover the costs of living with dignity and security.”