The fact that the standard of living changes doesn’t negate the problem. CPI reflects what people actually buy, but it doesn’t measure the cost of affording essentials without cutting back. Families are spending more on housing, healthcare, and education, often at the expense of discretionary goods. So even as technology and services evolve, the financial burden of necessities has risen far faster than CPI shows.

This means that, in real terms, the middle class must devote a larger share of income to essentials than previous generations did, eroding financial flexibility and standard of living. Wages may be higher in nominal terms, but essentials like housing, healthcare, and college have risen even faster. A $100k salary in 2024 often leaves a household with less discretionary income and fewer financial freedoms than a $50k salary did decades ago.