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Rising living costs are the biggest barrier to economic mobility for 60 per cent of Americans, while nine out of ten say food and grocery expenses are putting pressure on their household finances, according to a report by the McKinsey Institute for Economic Mobility.
The report said affordability pressures are affecting people's ability to plan for the future, pursue education, change jobs and make long-term investments, potentially limiting their chances of improving their economic position. The research, based on a survey of 30,000 Americans, found that two-thirds identified greater financial security as their top aspiration, regardless of race, income or where they live. By far, the rising cost of living was the number one thing people cited60 percent of Americans said thats the thing getting in the way of them achieving their dreams, JP Julien, a partner at McKinsey, said in the report. Food and groceries emerged as the most widely reported source of household financial pressure, ranking ahead of housing, fuel, healthcare and education costs. The report also highlighted differences across life stages. Young adults were more focused on careers and income and were more likely than other respondents to identify mental health as a barrier to progress. Parents were particularly concerned about the cost of living and opportunities for their children, while people approaching retirement prioritised saving for the future. The report also found that community connections were linked to a greater sense of control over one's future. People who felt strongly connected to their communities were twice as likely to say they had a say in the direction of their lives and three times as likely to feel in control of their future. The reality is that affordability pressures change how people imagine their future, Diana Ellsworth, a senior partner at McKinsey, said, adding that rising costs can make people hesitant to change jobs, pursue education or make other long-term investments. The report called for action to make essential expenses, including housing, food and childcare, more affordable, while ensuring families have sufficient income. It also stressed the need for more reliable pathways into good jobs and opportunities for career progression. McKinsey said employers, educators and policymakers could support economic mobility through skills-based hiring, paid training, apprenticeships, flexible work arrangements and stronger community institutions. (ANI)
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