Hoosiers In Debt, Not Getting Ahead

 'You've got to work at McDonald’s all day': This young Indianapolis man owes $36K on a car loan — but can barely make that in a single year. The Ramsey Show offered him a reality check

The problem:

Dylan revealed he has more than $70,000 in total debt. Of that, $36,000 is from a car loan and another $3,700 is from a personal loan he took to pay rent while between jobs. However, the most shocking piece of Dylan’s debt pile is a student loan of $32,000 that he acquired after just one semester in college.

“Wait, one semester? On Mars?” Delony asked incredulously.

To be clear, Dylan’s debt burden isn’t extraordinary. The average student loan debt is $37,718, according to the Education Data Initiative. However, that’s usually debt students have racked up after completing their program and graduating.

Dylan said he attended a private Christian school in Minneapolis. Tuition for some of these institutions can be tens of thousands of dollars per year, so it’s possible for a young person to rapidly accumulate his level of debt.

Dylan’s situation highlights how millions of Americans have accumulated a total of $1.74 trillion in student loan debt over time.

 The solution offered:

Co-host Rachel Cruze recommended a “scorched earth” debt reduction strategy for Dylan, which means quitting his job because it doesn’t pay enough — and then working multiple jobs and long hours to reduce his debt.

Dylan said he earns roughly $36,000 in a combination of base salary and commissions as a car salesman. That’s not enough to manage his debt burden.

“Your car salesman days are over,” Delony said. “You’re not good at that.”

Instead, Delony recommended that Dylan work at McDonald’s, deliver pizzas and work as an Uber driver. Cruze, meanwhile, said he should sell his car, move back in with his parents and work relentlessly to pay down the remaining debt.

“I would be working 80 hours a week,” she said.

According to Indeed), non-manager roles at McDonald’s locations in Indiana tend to fall between $9 and $12 an hour. Pizza delivery drivers in the state earn an average of $15 an hour, per Ziprecruiter. If Dylan were to make $12 an hour working 80 hours a week, he could potentially earn just shy of $50,000 (before taxes). Saving a significant chunk of that could help him pay off his debt in a few years.

Working long hours or multiple jobs isn’t unusual. In fact, nearly 8.4 million Americans held multiple jobs as of November 2023, according to the Federal Reserve Bank of St. Louis.

“You’re not going to have a life,” Cruze warned. But the grueling effort should be worth it to get out of debt while Dylan is still young.

I am semi-retired. I work to pay my rent and to socialize. Prison worked to shed me of my debts, except for student loans. I do not date, I do not try to keep with the Joneses. This annoys my oldest sister. Henry David Thoreau's opinion means more to me. I spend my free time in writing (and not getting enough of that done). If the economy depended on me, we would be in a depression. I gave up on paying off my student loads while in prison; that relieved me of a lot of the stress that underlay my depression. From what I have seen, I cannot imagine how anyone younger than me, without the benefit of my Social Security benefits, can get ahead of poverty in this state. I cannot see why anyone with an education wants to stay here. When I was an attorney, I lived off the post taxes income of my clients. The less income they had, the less likely I had to make a living. Now, we have a shortage of attorneys. The economic focus of this state's leaders has been on low-paying jobs requiring less education, fewer skills. I have long thought the political purpose is to create a citizenry lacking in the exudation that might challenge the political order. Well, we reap what we sow.

Consider Niki Kelly's A worker shortage is plaguing every industry, and here is why from The Capital Chronicle:

 I am not an economist, so I reached out to the experts to try to break it down. Both Matt Will at the University of Indianapolis and Michael Hicks at Ball State University cautioned, though, that there isn’t one answer.

Partisans want to latch onto one reason that fits their narrative. But it’s a more complicated picture than that.

 Will said the direct answer is a smaller share of people are participating in the workforce. Before the pandemic, 63.4% of people in the U.S. were participating. That is now down to 62.7%, which equates to about 2.4 million people who are no longer working.

So why aren’t they working? Will said one factor is child care. A lack of access, whether that’s not finding any open seats or not being able to afford them, has kept some parents at home — preventing them from working.

Another issue is that many people have simply decided to accept a lower standard of living. Perhaps during COVID-19, they lost their job and spent more time at home with their children and families. They realized they could live on less, and are now choosing a lower standard of living with a higher quality of life, Will said.

Hicks focused more on wages driving workforce availability and said Indiana’s average weekly wages for all employees is substantially lower than the national average by about a quarter. And that isn’t made up in the cost-of-living differential.

He said in the private sector businesses have had to increase wages to meet or exceed inflation. This is causing a recent national rebound, as evidenced by a decline in help wanted ads.

But Indiana’s wages have remained low: “Most businesses are not psychologically prepared for the wages they need to pay,” Hicks said.

Similarly, in the public sector, wages are the primary reason for a shortage. He said teachers are making less than they were in 2000 in inflation-adjusted terms. This is despite lawmakers putting more and more money into the system.

“Plenty of people want to teach but it pays so poorly it’s one of the least viable occupations today,” Hicks said.

Neither economist offers any good solutions.

As I see it, any solution requires politics, and those politics means the goring of sacred Hoosier oxen. It will mean changing the culture here that prizes the under-educated population as fodder for low-paying jobs. It will mean asking who has benefitted from creating and maintaining that culture. Republicans have run this state for the duration of my life; they will not want to ask these questions. Not that I think Indiana Democrats want to rock the boat all that much. Therefore, Indiana will continue in its slide into pauperdom.

 sch 12/16