The upper echelon of American society has no problem with affordability. Consumption, which is 70& of GNP grew by a 4.3% annual rate in the third quarter of 2025. Some people obviously are not worrying about the cost of groceries. They’re spending money on airplane flights, hotel stays, concert tickets and fine wines. No need to worry about the price of groceries here. So let’s not talk about “everyday Americans” who are sweating over the cost of bananas and eggs or even gas. The fact is that the upper 20% of Americans, some 60 million people, are carrying the US economy because they are doing most of the spending while the lower 20% are barely getting along. The “everyday Americans” meme shoves everybody into the same box which belies the truth. So when we talk about those who are struggling in this economy let’s be clear that we are talking only about the lower 50%, approximately of Americans. Let’s also be clear that we are not talking about the upper 20% in terms of wealth and income who are doing just fine … even better than just fine. In the words of the NY Times: “in a country as large and wealthy as the United States, the top 20 percent constitutes well over 60 million people — more than the entire population of many major nations. And bank balances, tracked by large institutions, show how that more affluent cohort of Americans is helping lift key economic barometers.”
So where is the dividing line in the so-called K-shaped economy. Paul Krugman in his Substack blog says this: “So let me suggest a measure that may get at the general sense of declining social inclusion: the ratio of incomes at the 60th percentile of the income distribution, currently $106,000, to incomes at the 95th percentile, currently $336,000. The cutoffs are arbitrary, partly reflecting easily accessible data. But the 60th percentile is probably a good placeholder for people who are middle class but not affluent, while the 95th percentile may be a good indicator of the very affluent.” So according to Mr. Krugman, the 60% of the people who are making $106,000 or less are middle class but not affluent. Are these the so-called “everyday Americans”? I’d say that cut-off point is too high. According to Google, consumer spending “is generally up this holiday season (late 2025), with projections and early data from Visa, Mastercard, and the National Retail Federation (NRF) suggesting growth of around 3.7-4.2% year-over-year, surpassing $1 trillion. Holiday spending over $1 trillion? Growth in the American economy up approximately 4%? This dos not sound like an economy where people are hurting due to the cost of groceries.
Well, let’s look at the income of people at the 40th percentile of the American economy, those earning $62,200 or less. This is about double the poverty level for a family of four. I would say these are the Americans who do sweat the small stuff in terms of providing for their families. So let’s be honest; let’s not talk about affordability for those doing better than this despite Mr. Krugman’s generous assessment that affordability issues start at the 60th percentile.
Democratic pundits need to get real. When they talk about “everyday Americans,” they are not talking about themselves for sure. They are talking about the lower 50% or so of Americans in terms of income and wealth. And most American at that level have little wealth so we are talking about income. And let’s be clear that the upper 50% of Americans have no problem whatsoever with affordability. In fact they are paying hundreds if not thousands of dollars for concert and sports tickets and taking a few trips a year to exotic destinations. They at least have enough money to fly to Grandma’s house for the holidays and bring presents. Let’s not lament the plights of those people and lump everybody into the same category. Affordability is really a class based issue.
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