The author's point is that decades of wage stagnation combined with tremendous inflation in big ticket items (housing, healthcare, education) have made it impossible for the bottom 80% to save. That cohort will be perpetually broke because of housing, healthcare, and education. The other 20% won't notice the difference.
Rent? Enjoy annual increases that eclipse your wage growth.
Bought a home with rented money? You still have to pay the mortgage even if you get laid off. You still owe the same amount even if property values tank. If you deplete your savings you might face foreclosure, which, compounded with a down market could wipe out your equity. Most home"owners" don't understand these risks.
Major illness or emergency? Your insurance plan is tied to your job. A full time job in a competitive field at a generous company will get you decent, affordable coverage. A full time job at a company that's circling the drain or is focused on shareholder value will get you expensive coverage that doesn't cover much. A part-time job means you get to look for health insurance on your own, a process that confounds even healthcare economists, and the quality of your options varies greatly from state to state. This is where you'll eventually end up anyway, since you'll be too sick to work. Your company will find a way to fire you. Once you deplete your savings, you might qualify for aid, but not much.
Your parent/uncle/niece/unmarried SO needs money to treat a chronic illness? Government assistance won't cover everything. Neither will crowd-begging or their savings. Or yours.
Have young kids? Daycare costs $15k-30k per year. Kindergarten is only 4-5 hours a day, elementary school is 6-7 hours. One parent can only work part time--very, very close to home, or drops out of the workforce for 10+ years. This destroys their career and lifetime earnings.
Kids want to go to college? Financial aid is "need based". Live on the coast where your salary is high but so is the rent on your modest home? Too bad, need is not regionally adjusted. Are you poor and broke? OK, you have a need. Decades ago your child would receive grants, now they'll receive grants and loans. Hopefully you planned and parented well so they go to an in-state state school, otherwise they end up shackled to a mountain of debt.
Frugality won't save you. Don't be stupid and live way beyond your means, but a latte a day doesn't matter. The most important thing is to get in the top 20% on one salary and hope you stay there.
Rent? Enjoy annual increases that eclipse your wage growth.
Bought a home with rented money? You still have to pay the mortgage even if you get laid off. You still owe the same amount even if property values tank. If you deplete your savings you might face foreclosure, which, compounded with a down market could wipe out your equity. Most home"owners" don't understand these risks.
Major illness or emergency? Your insurance plan is tied to your job. A full time job in a competitive field at a generous company will get you decent, affordable coverage. A full time job at a company that's circling the drain or is focused on shareholder value will get you expensive coverage that doesn't cover much. A part-time job means you get to look for health insurance on your own, a process that confounds even healthcare economists, and the quality of your options varies greatly from state to state. This is where you'll eventually end up anyway, since you'll be too sick to work. Your company will find a way to fire you. Once you deplete your savings, you might qualify for aid, but not much.
Your parent/uncle/niece/unmarried SO needs money to treat a chronic illness? Government assistance won't cover everything. Neither will crowd-begging or their savings. Or yours.
Have young kids? Daycare costs $15k-30k per year. Kindergarten is only 4-5 hours a day, elementary school is 6-7 hours. One parent can only work part time--very, very close to home, or drops out of the workforce for 10+ years. This destroys their career and lifetime earnings.
Kids want to go to college? Financial aid is "need based". Live on the coast where your salary is high but so is the rent on your modest home? Too bad, need is not regionally adjusted. Are you poor and broke? OK, you have a need. Decades ago your child would receive grants, now they'll receive grants and loans. Hopefully you planned and parented well so they go to an in-state state school, otherwise they end up shackled to a mountain of debt.
Frugality won't save you. Don't be stupid and live way beyond your means, but a latte a day doesn't matter. The most important thing is to get in the top 20% on one salary and hope you stay there.