In the wake of the Reagan era, a profound shift occurred in our economic landscape. Since the 1980s, core living expenses—housing, education, healthcare, childcare, transportation, and food—have dramatically outpaced wage growth. While median home prices have increased by over 160% since 2000 (more than doubling relative to income), college tuition has risen nearly 1,200% since 1980², and healthcare costs have grown at twice the rate of general inflation, median household incomes have grown by only about 30% in the same period.
To put this in concrete terms: if a typical family in 2000 earned $50,000 and could purchase a $150,000 home (a price-to-income ratio of 3:1), by 2022 their income might have grown to $65,000, but that same house would cost $390,000 (a ratio of 6:1). What was once the cornerstone of middle-class stability—homeownership—has become increasingly unattainable, forcing more people to either take on crushing mortgage debt or remain permanent renters in a market where rents have also skyrocketed, increasing by over 70% in the past decade alone.
The urban housing crisis that Ezra Klein and Derek Thompson examine in their book Abundance illustrates this problem perfectly. In 1950, the median home price was 2.2 times the average annual income; by 2020, it had risen to 6 times. This radical disconnect doesn’t just price young people out of homeownership—it fundamentally alters cities themselves. Where does the local barista live in Silicon Valley? How about the teacher, the firefighter, or the nurse? Cities that were once engines of economic mobility have become engines of exclusion. As Klein and Thompson note, when housing is unaffordable, cities may still function as centers of innovation but fail in their historic role of providing pathways into the middle class. The wealthy and high-skilled can still afford to live there, but ordinary workers are priced out, destroying a traditional avenue to economic advancement.
This widening gap isn’t random chance but the predictable outcome of an economic system whose core features—from tax policy to financial deregulation to corporate governance—systematically channel gains upward while distributing costs downward. It’s not that shadowy figures gathered in a room to design inequality, but rather that the combined effects of thousands of policies, court decisions, and market structures have created a game where debt is the central mechanism keeping the whole system running. When wages can’t keep up with costs, debt becomes the bridge—student loans for education, mortgages for housing, credit cards for daily necessities—ensuring that even as people fall behind, the payments keep flowing upward. It’s a game where someone has to lose for others to win. And if you’re wondering who the designated loser is in this arrangement, just look at who’s drowning in debt while being fed the mythology of the American Dream to keep them playing. As legendary poker player Amarillo Slim observed, “Look around the table. If you don’t see a sucker, get up, because you’re the sucker.”