People are bad with money.
Way back I was breaking even every month between income and expenses and my salary was maybe $40,000. I had a place of my own (mortgage), a car which I was financing (not leasing), cable tv etc.... It sucked I was saving nothing, but it's doable. After paying for income tax and all the taxes paid when you buy things, I cleared maybe what? $30,000? And I lived. Never had credit card debt either.
Decades later, I make 6 digits, have tons of money, and dabble in real estate.
The key though is that my spending habits have increased, but by far not at the same level of my income increase. That's how you save money.
If my income has grown, but I'm spending it all saving nothing, then my situation is no better than 20 year ago. The problem is that when people get pay hikes, some people spend all gains. On the other hand, some people bank it. Those are the people with big bank accounts, can but multiple properties (which increase your assets even more) and don't care if they get fired.
I can afford the most expensive cable and internet pack, but why pay for it if I don't use it? What's the most expensive Rogers cable bundle? $100? Add in movies and sports pack and it's probably $150. What's a good internet tier? $60-80? So add them together, tax and unit rentals and there's some people paying $200/mth. And that excludes cell phone service. And I bet many of these people don't make good salaries. I pay $40 for basic cable, $50 for unlimited internet and I own the router and cable box. Add tax and I pay $100/mth.
If I really wanted to, I can go buy a 7 series BMW for cash. But why would I? I drive a crappier car. Who cares. But there are some people scrambling to scrape up money so they can afford a 3-series BMW because it looks cool and they think buying a good import car it puts them up a step in the rat race. So be it, that's your choice.
There's a couple I know whose combined income is maybe $100,000 tops. Not great by any means, but they have no kids. As long as they don't blow their money they should be able to live fine. Instead they are broke living pay cheque to pay cheque. And last time I heard, they still rent! Why? Because they both buy tons of shit, and don't care about waiting for sales. They are the types of people who just go to the store and buy it. If they want to buy new clothes, they just go to the mall and buy it. Doesn't matter if it's regular price. I buy clothes too, and I only buy it when it's 30-40% off (or more if I'm lucky). And somehow they don't realize that two people in their 40s and living like they are broke isn't exactly a great lifestyle. If one of them gets fired, they are toast.
It's all about lifestyle and how much effort people want to put into saving money and looking for deals.