Governments at all levels and various media agencies continually issue articles and reports outlining how expensive life has become. Whether it’s housing, education, healthcare or food, we are regularly warned that it’s become just too exorbitant to live without either a six-figure income or a two-person income household.
The most interesting aspect of this is the fact that we are regularly informed that inflation is tame and overall prices aren’t going up. However, the aforementioned is already an admittance that price inflation is here, it has been here for quite a long time and it won’t leave us anytime soon.
A great example of this is a new report released by the Demand Institute, a non-profit think tank run by the Conference Board and Nielsen, in which it highlighted that Americans are spending too much of their income on housing. According to a survey included in the report, approximately 40 million Americans spend around one-third of their income on housing payments, property taxes and other housing-related costs.
Indeed, there is a discrepancy, too, between renters and homeowners: the former spend nearly half of their income on rents, while the ladder spends nearly one-third. In the top 25 U.S. rental markets, the median rent for two-bedroom apartments range between $1,000 and $3,500.
Let’s see what $1,000 looked like in 1954? According to one calculator, it would cost just under $9,000 today. Or, $3,500 in the same year would actually be more than $30,000 today. That’s a cumulative inflation rate of 784 percent.
Housing prices have been going up as well since the economic collapse (see Federal Reserve chart below).
Meanwhile, another report issued by the Child Care Aware organization found that child care is eating up family budgets more than at any other time in history. Families can spend between 15 and 85 percent of their incomes on child care. In fact, child care can cost more than tuition and fees at four-year colleges in more than 30 states.
What about food prices? Well, as usual, food price inflation is expected to go up at least two percent next year – specifically, beef and pork prices are projected to rise significantly next year, even when they reached record highs this year.
There is no inflation? Huh? Tell that to the people who need food, shelter and child care. At least, consumers can save money on gas over the next few months…oh never mind, politicians already want gas tax hikes.
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