Capitalism Isn't Working For Young People?
I’m only 23, but I feel like I have early-onset dementia. Last month, I swear that yogurt was $5. Today? $7. Maybe I’m hallucinating. But if I am, it’s the kind of hallucination that’s forcing me to cut back on groceries, to make choices about what I can and can’t afford anymore.
Then I get home, scroll X and Instagram, and see Trump saying the economy is doing great. The stock market is at an all-time high. GDP is growing. Economists are nodding along. And while I don’t trust anything Trump says, he might actually have a point this time. The numbers do look good on paper. So why does it feel like I’m barely hanging on in an economy that’s supposedly thriving?
Turns out, I’m not alone. And I’m definitely not hallucinating. Millions of Americans and Canadians are feeling this exact disconnect right now. Sure, we can blame some of this on COVID—supply chain chaos, stimulus checks that supercharged inflation, all that reduced our purchasing power. But that was nearly three years ago. What’s happening now is different, and a lot of it traces back to one policy that’s reshaping our daily lives: tariffs.
Here’s the crash course. A tariff is essentially a tax on goods imported from other countries. Whether tariffs are “good” or “bad” depends entirely on their purpose and who ends up paying for them. In Trump’s case, the tariffs implemented before and after Liberation Day in April have made imported goods more expensive for American consumers. In other words, we’re the ones paying for it. It’s been months now, and retailers are raising prices across the board. ELF Beauty, the makeup company, announced price increases in August, noting that hikes are “widespread across the industry.” This isn’t just about lipstick. It’s everything.
The numbers back this up. US inflation sits at 3% as of September. In Canada, it’s 2.4%. That might not sound dramatic, but inflation doesn’t hit everything equally. Coffee prices, for example, have jumped over 15% year-over-year according to some August reports, while beef and veal prices are up a staggering 13.9%. So while the overall inflation rate hovers around 2-3%, your actual grocery bill tells a very different story. That 2% target the Federal Reserve and Bank of Canada talk about? Your wallet is feeling way more than 2%.
Then there’s the job situation, which is quietly falling apart. The labor market is cooling. Unemployment is rising. And if you’re a recent grad like many of us? Good luck. Companies are freezing hiring because they’re uncertain about tariffs and trade wars. The US added just 22,000 jobs in August, way below expectations, and the unemployment rate climbed to 4.3%. And that number hides the real story for young people: the unemployment rate for 16-24 year-olds in August was 10.5%, more than double the national average. In Canada, it’s even worse, with the unemployment rate sitting at 6.9% after the October report.
Here’s something crucial economists want you to know: unemployment is what they call a lagging indicator. It tells us what already happened, not what’s coming next. Which means what you’re experiencing in the job market right now, the rejections, the ghosting after interviews, the entry-level jobs requiring five years of experience, that’s probably worse than what the data even shows.
Now for the really confusing part: the economy IS actually growing. US GDP bounced back after a first-quarter contraction, which was mainly caused by companies rushing to import goods before tariffs hit. Second quarter growth hit 3.8%, and that’s legitimately strong. Canada’s been more erratic, gaining a modest 0.5% in the first quater but then contracting 0.4% in the second quarter as the trade war with the U.S. slowed exports. The word to describe all this chaos is “resilient.” The economy is weathering the storm.
But what they’re not telling you on the news is that this growth isn’t shared equally. Not even close. Affluent consumers, the top earners, account for nearly 50% of GDP contribution. That’s the highest share on record going back to 1989. Data from the Bank of America Institute in September highlighted this split, showing that while spending for higher-income households grew 4.0% year-over-year, it grew just 0.6% for lower-income households. And investment in Artificial Intelligence (AI), while used to be a smaller part of the economy, is having an outsized impact on growth, with AI investment in building out data centers contributing almost as much as all consumer spending combined. In other words, the economy is being propped up by the outliers: the wealthy and Big Tech. Economists are calling it the “three A-pillars”: affluent consumers, artificial intelligence investment, and asset price gains. If any one of these pillars weakens, the whole thing could become unstable.
Look at the stock market if you want to see this play out in real time. The S&P 500 and TSX are both at all-time highs, driven almost entirely by AI spending pumping up the values of tech companies. The best-performing sectors? Tech and industrials, all powered by investment and growth in AI. The “Magnificent Seven” tech giants, Nvidia, Alphabet, Amazon, and the rest, are carrying the entire market. Nvidia just became the world’s first $5 trillion company. All that new equity wealth has boosted consumer spending, which accounts for about two-thirds of demand in the economy, but it’s also skewed everything toward the affluent. The economy is doing well. It just might not be doing well for you.
This is what economists are calling a “K-shaped” economy. Picture the letter K. The top line shoots up, thriving, while the bottom line drops down, struggling. Some households and industries are doing incredibly well. Others are barely surviving. And the gap between those two lines just keeps getting wider. If you live in the upper part of the K, things are, as one economist put it, “undeniably awesome.” But if you’re in the lower part, you’re stressed, things are at risk, and it feels like the economy is becoming more insecure every day.
This explains why young people are leading the resistance against the “everything is fine” narrative. Public support for Trump is dropping. Democratic leaders who campaigned on social policies like affordable housing won by big margins in Virginia and New Jersey. They tapped into the same anxiety over high prices that helped Trump beat Biden in the first place. Recently, Peter Thiel’s 2020 email1 has been circulating on the internet, saying that capitalism isn’t working for young people. And he’s right. Gen Z is the first generation who believes our economic prospects are worse than our parents’. We’re holding record levels of student debt, a crisis that now exceeds $1.7 trillion in the U.S. alone, going to universities only to discover we can’t find employment because companies are either freezing hiring or talking about how AI will replace our jobs.
It sounds gloomy because it is. But what gives me hope is that our generation is also increasingly financially literate and finance-savvy. We’re learning how to budget, save, invest, and plan for the experiences that matter to us, even in an economy that feels rigged against us. We’re having these conversations, sharing strategies, and refusing to accept the narrative that we should just be grateful the stock market is up.
So no, I’m not hallucinating. That yogurt really did go from $5 to $7. This is just the new economy where GDP grows, stocks soar, and our wallets still feel empty. Millions of Americans and Canadians are seeing the same thing, feeling the same squeeze. The question is what we’re going to do about it, and how this disconnect will shape the politics and policies moving forward.
Thank you for reading the Americano.
Tuesday, November 10th, 2025.
