United States economy may be reaching critical state

Posted Feb 26, 2024

By Benjamin Larkin

News Editor

The economic state of the United States is a cause for concern and could have a very real and noticeable impact on the lives of everyone in the nation within the near future.

In the United States there is a large disparity in wealth between the classes of American society that has reached a clearly unhealthy level. The lower 50% of households own only 2.6% percent of the total national household wealth, with most of this lower 50% 's wealth in assets that cannot be quickly or effectively converted into currency. Many struggle with high rents and living expenses that regularly require them to dip into their savings or rely on government assistance at both the state and federal levels with government aid programs, especially services for the elderly and disabled, becoming a quickly growing expense. 12.4 percent of Americans were recorded as living below the poverty line in a federal census in 2022 and that number may have increased since then with some states having much higher concentrations of poverty than others.

The United States official unemployment rate in 2024 was 3.7%, which seems like a manageable number or even an acceptable ratio, however, to be included in the unemployed population you have to fulfill three conditions which are being jobless, looking for a job, and being available for work. Anyone who cannot meet these conditions is not counted as part of the labor force, this results in a number not truly representative of the unemployed population within the United States. Because of these very specific conditions it is simply not viable to use the unemployment rate as a way to realistically judge how many American adults capable of working are without a job. 

Dependants and the non working population are also a major financial concern for the lower and middle classes as well as federal and state governments as they must be supported by their families, who cannot often not afford the expense, or survive on government assistance, which is often unable to fully provide for their needs including the supervision and living assistance required by the elderly or disabled or those suffering from addiction or mental health issues. If the US population experiences financial hardship the working population will also have to support those outside of the labor force which seems difficult or even impossible as many members of the working population report difficulty paying for essential services and goods such as rent, groceries, and transportation. Because of this situation the United States will have to make hard choices on how the non working population should be supported.

The homeless population is also a major concern when it comes to the population that must be financially supported, with the United States officially recording 653,100 people experiencing homelessness in Jan of 2023. Unfortunately, the system for determining the homeless population is also flawed, with many homeless people going unrecorded as they are either missed for the count or are not considered to be part of the homeless population, such as people who live in a car or people who consistently stay with friends, family, and acquaintances. Community level organizations in particular have often been able to find hundreds more homeless people in their own studies than are typically recorded for their counties and municipalities during the federal survey as families, friends, community leaders, and police and medical staff report the people they know experiencing homelessness which is often far more accurate than the official system of sounding out a few volunteer observers into every county. Areas with large minority and immigrant populations also experience severe undercounting issues and often issues official complaints about how their populations of day laborers, immigrant workers, and even people experiencing abject homelessness in harder to reach areas are completely ignored during the survey. In all there could be dramatically more homeless people in the United States than are recorded in the official survey but there has been no national effort to restructure the system of surveying to get more accurate reports leaving us unable to know how many people are really experiencing homelessness. 

Inflation is a major concern as well and has contributed to price increases in virtually every category including rent, groceries, transportation, electronics including cell phones, internet services, and more. While the official federal median wage increase is greater than the median rate of price inflation with 23 percent to 20 percent. However this median wage increase is disproportionately skewed towards the wealthier portion of the population which has experienced wage increases that far surpass the lower percentiles of the population. The median rate of inflation is also not fully representative of the realities in everyday life as some goods and services such a meat products or rent for apartments in some regions have gone up 33% or more since the pandemic which is a major concern for the population that lives paycheck to paycheck which is the vast majority of the lower percentiles and 55-63% of the United States population in total. Inflation has negatively impacted the more poor and vulnerable parts of our population to a much higher degree than it has affected the upper and middle classes and has wiped out the savings of many Americans, reducing their chance of developing generational wealth and lowering their standard of living to a state far below the official standard of living.

All of these factors have contributed to an increasingly large and poverty stricken lower class that have issues maintaining their day to day needs and who have nowhere to go if they were evicted from their apartment or home or lost it in a disaster. This population also lacks investments or real estate that could increase their wealth overtime and must support dependents as well, further impacting their finances. And I feel that this is a major problem that could spiral out of control if the economic situation worsened or government support was cut off or reduced.