Over the last few years, and particularly in 2022, inflation has increased the cost of living across the United States. Whether it’s your gas bill, clothing costs, or your weekly grocery bill, it’s likely that you’ve felt the strain that inflation has put on day-to-day living.
Gen Z has been especially impacted by inflation. With some of Gen Z still being in college and some recently graduated, they aren’t making the same money that older generations may be. They also can’t really afford to own their own homes, opting instead to rent with roommates. Not to mention, even figuring out how to have a night out and have fun can literally break the bank now.
The Inflation Reduction Act, which was passed by the Senate on August 7 with a 51-50 vote, is intended to reduce inflation by “lowering energy and health care costs for families and by helping to bring down the deficit.” The House is expected to vote on the bill on August 12 and, if it passes the House vote, will go to President Biden’s desk to sign into law. Here’s what you need to know about this bill, and what impact — if any — it could have on Gen Z.
How is the Inflation Reduction Act going to reduce inflation?
The bill has a few main points, which some experts say won’t tackle inflation for at least a couple of years. Shai Akabas, the director of economic policy at the Bipartisan Policy Center, told NPR that by reducing the federal deficit, promoting the production of certain goods, and limiting price growth of select prescription drugs for Medicare patients, they intend for this bill to lower inflation. However, Akabas did add that it’s not likely to see a huge impact right away.
The bill also includes $430 billion to tackle climate change and invest in clean energy technologies, as well as lower costs for health insurance. It intends to make sure larger corporations are paying their fair share of taxes, and even offer tax credits for individuals who switch to cleaner energy sources.
But what does this mean for Gen Z college students?
Though many consumers are feeling the brunt of rising inflation, Gen Z, and particularly recent college grads, are having to face the same costs as their older peers with less to back them up. Picture this: You’re a recent college grad with about $28,950 in student loan debt (the national average) and are being told to make a budget and everything will be fine (it may not be fine, but it is still helpful!). Meanwhile, inflation is at an all-time high (the Consumer Price Index increased 8.5% in June), the cost of living is going up, and starting wages are still below what you need to survive. So any attempt to tackle inflation is a good move, even if it could take a while to go into effect.
Not to mention, Gen Z has been trying to fight climate change and get presidential administrations to pay attention for literally years. So, knowing that this bill has intentions to “lower greenhouse gas emissions by 40 percent from 2005 levels by 2030” could be a step in the right direction — though the bill does have some critics, with environmentalists claiming that it doesn’t do enough to stop the production of fossil fuels.
Either way, if the Inflation Reduction Act does pass in the House, it could take years for us to see its larger impacts.