The Deeper Affordability Crisis

The other day on Fox News, Kevin Hassett, President Trump’s chief economic adviser, termed the affordability crisis “a myth.” This echoes Trump’s repeated claims that cost-of-living concerns are a hoax. But as far too many working Americans can attest, the daily pocketbook struggle is no myth. Trump’s war and his scattershot tariffs have increased the cost of living in ways that are up close and personal, such as the price of gas at the pump and food at the grocery store.

However, there is a longer-term affordability crisis, which deserves more attention. While wages on average have almost kept pace with prices on average, the averages don’t tell the real story of people’s lived experience.

The cost of the basket of purchases that allow a decent standard of living has gone through the roof. Those include housing, health care, higher education, child care, and to a lesser extent, food and transportation. The falsely reassuring averages, published monthly by the Bureau of Labor Statistics and duly reported by the press, don’t capture these deeper realities.

Researchers left, right, and center have confirmed these trends. The respected Urban Institute publishes an American Affordability Tracker. The most recent update, published in April 2026, reports, “Since 2017, average earnings have grown about 43 percent nationwide. Over the same period, home sale prices have increased 81 percent and rents 54 percent. The lowest-cost Silver health plan on the Affordable Care Act Marketplace has risen 77 percent.”

Oren Cass, a conservative with populist leanings, publishes a Cost of Thriving Index. According to that index, in 1965 a median man working full-time needed about 43 weeks of wages to cover a year of food, housing, health care, transportation, and education for his family. By 2023, that had increased to 62 weeks. For a median woman, the figure increased from 59 weeks to 72 weeks.

David Howell, an economist at The New School in New York, has done extensive research disaggregating recent wage trends. Howell and his co-author Jan Gnaedinger will be publishing their results in December. In an interview, Howell told me that the share of jobs with pay levels that allow a decent standard of living has been steadily falling for four decades.

Here’s the punch line: All of these trends antedated Trump. Even if the Democrats take back Congress next week and win the presidency in 2028, end Trump’s war, lower the price of crude oil, and restore Trump’s budget cuts, all of those trends will still be there.

Young people are especially whacked, between the costs of rentals, the burden of college debt, and the low pay for entry-level jobs. That’s why the percentage of twenty-somethings who have moved back in with parents is at record levels. Almost half of recent graduates pay interest only on college debt and do not pay down principal, so the debt extends for decades.

All of these deeper trends are the reason why so many working-class people and increasing numbers of middle-class people don’t trust either political party—because neither party prevented them from occurring or is addressing them in more than a token way now. That helps explain why so many working people, in desperation, turned to Trump and looked for racial scapegoats.

So while Trump’s culpability for the worsening inflation since he launched his war on Iran certainly needs to be central to the Democrats’ 2026 campaign narrative, the deeper crisis should be as well. And if Democrats are fortunate enough to get another turn governing, they need to get serious about solutions.

Each of these elements needs a somewhat different remedy, but each remedy is radical. For instance, while there is a vogue for cutting red tape for housing construction even at the expense of environmental safeguards, no amount of permitting or zoning reform will substitute for serious federal funding.

In the case of health care, what’s needed is major de-commercialization combined with Medicare for All. We also need to end the debt-for-diploma system for higher education entirely, and to have universal publicly financed pre-K and child care.

And of course the other side of the equation is better wages, which will require both labor law reform, much higher minimum wages, and federal job creation. All of that radical reform, in turn, will require serious taxation of the rich to produce the needed revenue.

In short, real change means a program for our time at least as radical as Franklin Roosevelt’s New Deal was for his time. Otherwise, long after Trump is gone, Democrats will have no more credibility with working people than they had in 2016 when Trump was first elected.