Earning six figures — or buying a $1 million house — isn’t quite the same in a high-inflation era.
Why it matters: Fast-rising prices have turned a lot of adults into versions of their grandparents, bowled over by the high cost of [waves hands] everything.
- We’re all becoming that old person who says stuff like, “back in my day, a candy bar only a cost nickel.”
What’s happening: The average lowest wage that American workers with a college degree expect for a salary is $92,000, per a New York Fed survey, released Monday. That’s the highest level since they started tracking the number in 2014 when it was $70,000.
- For those with less than a college degree, it’s $60,000. (That’s equivalent to $30 an hour — or twice the $15 hourly minimum wage that’s been on activists’ agendas for more than a decade.)
- Meanwhile, the Federal Housing Administration recently announced it would back mortgages of as high as $1 million in high-cost areas. Critics called this “a McMansion” subsidy — but it’s more a reflection of soaring home prices, particularly in these expensive areas.
Zoom out: We form a lot of our feelings toward spending and our understanding of what things cost when we’re just starting out in adulthood, says Scott Rick, a professor at the University of Michigan’s Ross School of Business who studies financial decision-making.
- That sense “persists even when circumstances change.”
The bottom line: Our minds are still catching up with the ICC.