Elon Musk’s recent comments about Americans needing to endure “hardship” as part of federal spending cuts evoke strong reactions. While the proposed austerity measures aim to reduce the national debt, their potential effects on the average worker could mirror the consequences of similar policies enacted in England a decade ago. If those results are any indication, the hardships Musk refers to might disproportionately impact those who are already struggling to make ends meet.
England’s experience with austerity offers a cautionary tale. Beginning in 2010, the government implemented deep cuts to public spending, particularly in social services, education, and housing programs. While the policies reduced the national deficit, they also led to widespread economic and social upheaval. Homelessness surged by 165% between 2010 and 2018, a direct result of slashed housing benefits and reduced support for vulnerable populations. For the average British worker, the austerity era brought wage stagnation, job insecurity, and a steady decline in public services.
In the United States, Musk’s endorsement of fiscal austerity raises similar concerns. Federal budget cuts would likely impact programs that provide a safety net for millions of Americans, such as Medicaid, food assistance, and housing subsidies. Without these supports, low-income families could face increased evictions, food insecurity, and difficulty accessing healthcare—issues already exacerbated by rising living costs. Just as England’s cuts to housing programs contributed to its homelessness crisis, similar measures in the U.S. could leave countless Americans without stable shelter.
For workers in industries reliant on federal spending, such as construction, infrastructure, and public services, austerity could mean reduced hours, layoffs, and limited opportunities for job growth. In England, the public sector bore the brunt of austerity, with workers experiencing a decade of real-terms pay cuts due to wage freezes and inflation. If similar policies are enacted in the U.S., American workers in essential services like education and healthcare could face similar financial strain, further exacerbating existing worker shortages in these fields.
Austerity policies often lead to a decline in overall economic productivity. In England, the anticipated economic growth from austerity never fully materialized. Instead, the country experienced stagnant productivity levels, which economists have linked to reduced public investment and declining consumer spending. American workers, already grappling with inflation and wage disparities, may find themselves caught in a similar cycle of economic stagnation, with fewer opportunities to improve their financial situations.
England’s austerity era serves as a reminder that the human cost of budget cuts can outweigh the fiscal benefits. While billionaires like Musk may view such measures as a necessary step toward economic stability, the burden often falls on those least equipped to bear it. For average workers, “temporary hardship” could mean enduring years of economic instability, declining public services, and increasing inequality.
Rather than repeating the mistakes of England, U.S. policymakers should carefully consider the long-term consequences of austerity measures. Investments in job creation, affordable housing, and robust social services could provide a more sustainable path to fiscal health, ensuring that economic recovery does not come at the expense of the most vulnerable.
