Inflation to Blame for Young Adults Asking Parents for Cash: Kevin O'LearyMenu iconSearch iconBusiness Insider logoBusiness Insider logoAccount iconAccount iconClose iconChevron iconAccount iconShare iconFacebook IconEmail iconTwitter iconLinkedIn iconLink iconSave Article IconAngle down iconClose icon
Many young Americans are hitting up their parents for cash because they can't afford the basics following historic inflation, Kevin O'Leary said.
A recent Pew survey found that 59% of parents with children aged 18 to 34 said they helped their kids financially. Only 45% of young adults said they were completely financially independent from their parents.
O'Leary was asked about the survey on Fox News this week. "This is all about affordability," the "Shark Tank" investor said.
The O'Leary Ventures chairman, nicknamed "Mr Wonderful," underlined the painful impact of historic inflation in recent years.
"Affordability got much tougher in rent, and protein, and gas, and all kinds of other issues," he said. "But the average wage in America barely budged."
Annualized inflation surged as high as 9.1% in June 2022, and has remained north of 3% in recent months, above the Federal Reserve's target rate of 2%.
However, real or inflation-adjusted wages for the median American worker only increased by 1.7% between 2019 and 2023, government data shows.
Even so, many people have seen slimmer pay increases, and purchase items that have risen in price faster than the headline inflation rate.
"You've got this massive squeeze on a whole cohort of people," O'Leary said. "This cohort is in trouble because they got whacked by some hardcore inflation that has not gone away."
Several experts have sounded the inflation alarm, citing it as one reason why more and more people are falling behind on their credit-card payments, tapping their nest eggs, and putting away less money each month.
McDonald's CEO Chris Kempczinski told analysts this week that consumers earning $45,000 or less are feeling "pressured" by high prices, and cut back on the fast-food chain's products last quarter as "eating at home has become more affordable."
The inflation headache has been worsened by the Fed's campaign to relieve it. The central bank has raised interest rates from nearly zero to more than 5% in recent years.
Higher borrowing costs discourage saving, hiring, and investing, which can help ease upward pressure on prices. But they've also raised people's monthly payments on their mortgages, car loans, and credit cards, when they're already facing higher food, fuel, and housing costs.
"This has been a particularly tough jolt" for young Americans over the last three years, O'Leary said.
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