Is there really an ‘affordability’ crisis?

 I love to eat out, but man is it expensive! I feel like you can’t get a decent dinner for two in any nice restaurant for under $125. 

My friends all agree. But then again, they’ve always agreed. As long as I can remember, I have complained about the high price of restaurants, travel, Broadway shows and concert tickets.  

People like me love to complain about high prices. This is nothing new. During the time of Diocletian — 700-plus years ago — citizens complained loudly about runaway prices for food, clothing and labor. In the 18th century, there were riots in England and France over rising food costs.

In the U.S., rising prices, the high cost of food and income disparity issues have been routine since the early 20th century. My parents complained about high prices. My grandparents complained. Now it’s my turn. 

So what’s so different today? The Internet and the 24-hour news cycle. 

Today, when someone complains about the high cost of living on Facebook, it gets seen by everyone they know, and propagated to who knows how many more according to their algorithm. And then there are the surveys generated by companies seeking like-minded souls on social media to sell their products. When they announce that their comprehensive, independent and completely objective research has found that consumers can’t keep up with inflation, watch out! Oftentimes they get the attention they seek — or at least the clicks.  

Face it — we in the media like clicks. There’s no shortage of surveys, polls, research and reports to satisfy that need. And right now, it’s about how “unaffordable” things are. 

But are things that unaffordable? I’d argue that this issue — like so many politicized issues — is a bit overblown. 

For starters, The Wall Street Journal recently opined that the country’s “affordability problem” is that wages aren’t keeping up with inflation and that the president’s recent efforts to put a ceiling on credit card interest, limit corporate buying of homes, buy up mortgage bonds and pressure the Federal Reserve to lower rates are — or will be — short of their objectives. 

This opinion is based on data from the Department of Labor. This is data that’s frequently revised and is proven to be unreliable, however. Instead of that dubious information, I pay more attention to what the two largest payroll companies in the country are reporting, with millions of employees in their data set. ADP and Paychex both say that wages over the year grew between 3 and 7 percent.

That’s well above inflation of 2.7 percent (also reported by the government, so buyer beware). It’s also above the historical median rate of inflation, which is also around 2.5-3 percent. And it doesn’t count the money made by the tens of millions of freelancers and side-giggers who are mostly spending their own time and effort freely to earn more money, renting their open space, driving Ubers and selling products on Amazon and Etsy. I believe people are making more than the government thinks they make.   

“Affordability” has a broad definition. The average price of gas is down significantly for most in this country — except for those who live in states that cripple their consumers with high taxes, fees and levies. (I think everyone knows which states I’m talking about.)

Both grocery prices and “sheltering” costs are up about 3 percent over the past year. The cost of clothes at Walmart and Target have not changed very much. So why do people feel like so many things are unaffordable? It’s not because of the things they need to afford. It’s the things they want to afford.

Yes, the price of a meal at a good restaurant is up significantly. A weekend in Vegas will set you back quite a bit more than it did a few years ago. Disney prices have skyrocketed. A simple cup of coffee (with the obligatory tip) will easily set you back $5 in most places. We all spend thousands every year on apps, streaming services, gourmet ice cream, pre-made food, late-night deliveries, craft bourbon, Taylor Swift tickets, bangles and beads, betting sites, organic food, expresso machines, golf clubs, baseball games and football season tickets. 

We don’t just buy a loaf of bread. We get the fresh premium bread from that terrific bake shop on the corner. We don’t get a veal parm at the pizza shop. We pay three times that amount to eat at a restaurant surrounded by other candlelit diners. We love our Botox and our BMW leases and our omakase and our smoothies. And then we love to work it all off at the local fitness center or at our Pilates classes. 

Good for us! This is life in America in the 21st century — a life much, much better than many in this world can enjoy. It’s a life that could only be dreamed about by our grandparents and their grandparents.   

But these are all extras. They are the perks of being an American in the 21st century. We spend our money on these things so that we can enjoy our short time here on earth. But by doing so, we put pressure on our cash flow. We create situations that make things “unaffordable.” And then, being human, we complain. 

This is not to say that there aren’t many people who legitimately can’t afford their daily expenses. But whenever I hear that from someone, I always like to know the details. Because once I find out what those “expenses” are, I can better determine what they need to afford, and what they just want to afford. Often, those two are significantly different.   

Gene Marks is founder of The Marks Group, a small-business consulting firm.

https://thehill.com/opinion/finance/5691609-wages-inflation-debate/