The Cost of Living is Crushing Us

The squeeze on household budgets is becoming tighter by the day. From New York to London, Berlin to Tokyo, families and businesses alike are feeling the pinch. The COVID-19 pandemic was only the beginning; now, a relentless surge in the cost of living is driving millions to make hard choices about their daily lives. Prices for essentials—food, electricity, water, housing, and fuel—continue to rise, hitting the poorest the hardest.

For young people, the situation is particularly dire. The cost of living is outpacing wages, leaving many unable to afford even the basics. In major cities across the world, high rents have forced young adults to remain in their parents’ homes well into their late twenties and early thirties. The dream of financial independence feels increasingly unattainable. In countries like Spain and Greece, where youth unemployment hovers around 30%, even graduates struggle to find stable work.

The housing crisis is not just a problem of affordability—it’s reshaping how people live. In cities like Berlin, Paris, London, and New York, rent consumes a staggering portion of salaries, leaving little room for savings or future planning. With financial strain comes a mental health crisis. Anxiety and stress over money and uncertainty about the future are becoming common struggles for young people trying to navigate adulthood in an economy that seems stacked against them.

Families, too, are buckling under the weight of rising costs. Childcare expenses have skyrocketed, making it difficult for parents to balance work and family life. Grocery bills continue to climb, forcing many to cut back on nutritious food options. Experts warn that these financial constraints will have long-term health consequences, as diets shift away from fresh, healthy options toward cheaper, processed foods.

But why is this happening? At its core, inflation is the culprit. It’s the silent force eroding purchasing power, making the same paycheck cover less with each passing month. Inflation is not just a single phenomenon but can be traced to three main causes:

1. Demand-pull inflation – This occurs when demand outpaces supply, driving prices higher. It’s often seen in booming economies, where increased wages and employment lead to higher spending.
2. Cost-push inflation – Rising production costs—whether due to higher wages, energy prices, or raw materials—lead businesses to pass these expenses onto consumers.
3. Monetary inflation – When too much money is pumped into the economy without a corresponding rise in goods and services, the excess cash fuels price increases.

Yet, beyond economic theory, there is a deeper issue at play—the structure of the capitalist system itself. In theory, the free market determines prices, ensuring that goods and services go to those who can afford them. But in practice, this often means that wealth accumulates in the hands of a few, while those on lower incomes are left struggling.

One of the most pressing issues is the privatization of natural resources. Many governments have handed control of essential resources like energy and minerals to private companies, depriving the public sector of the ability to finance services like healthcare, education, and transportation. As a result, people are forced to turn to expensive private alternatives, deepening financial strain.

Compounding the problem, wages have stagnated in many industries, while living costs continue their relentless rise. In some countries, monopolies and price-fixing further exacerbate the crisis. High-interest loans and credit dependence only add to the burden, trapping people in cycles of debt.

At its core capitalism is failing, the cost-of-living crisis is not just about numbers—it’s about people. It’s about the mother who skips meals to ensure her children are fed. The graduate with a degree but no job prospects. The family forced to choose between heating their home and paying rent. The crisis is real, and without systemic change, it will only deepen, shaping the future in ways that societies may struggle to undo.

Written by Rizwan Abu Huthaifa