are you aware of inflation?

[97guns]

im not talking about government supplied numbers because according to them there is no inflation, just wondering how the rising costs of goods has affected you and if you've even noticed it.

just a few years ago you could buy sirloin steaks for $2.99, now i see nothing less than $4.99. the price of everything is getting pretty high and wages are not increasing. a friend of mine works in the produce department for a grocery store and he is seeing people grumble about pricing and actually weighing the stuff they buy, they didnt care about the weight before but now with apples at $1.89/lb they are weighing everything.

and companies are reducing package sizing to keep prices down and unchanged, sure you can still buy a bag of fritos for 2/$5 but they are like 9oz now, i ate a Ho Ho the other day and i can swear it was much smaller than it was when i was a kid

[avil_saver36]

im not talking about government supplied numbers because according to them there is no inflation, just wondering how the rising costs of goods has affected you and if you've even noticed it.

just a few years ago you could buy sirloin steaks for $2.99, now i see nothing less than $4.99. the price of everything is getting pretty high and wages are not increasing. a friend of mine works in the produce department for a grocery store and he is seeing people grumble about pricing and actually weighing the stuff they buy, they didnt care about the weight before but now with apples at $1.89/lb they are weighing everything.

and companies are reducing package sizing to keep prices down and unchanged, sure you can still buy a bag of fritos for 2/$5 but they are like 9oz now, i ate a Ho Ho the other day and i can swear it was much smaller than it was when i was a kid

Yes, I used to buy Sirloin on discount deals at $2.99/lb back in 2008/09. It's impossible now. I have given up on eating steak, so no idea of what it costs in my local store now.

I could get boneless chicken for $1.99/lb. I can still find it with the local store brand at $2.99/lb but it's mostly at $3.49 or $3.99/lb now.

Milk has remained at nearly $3.50/gallon for about 3-4 years now.

Bread is about 30-40% more expensive.

In the short term, eggs have gone through the roof. I used to buy 30 eggs of store brand at $4.49, and just a week ago, they were at $7.49. However I heard there is a short term shortage of eggs.

We have a lot of Asian stores around and produce is at least 25% cheaper than the regular supermarkets. We have started shopping there. Overall, we have reduced meat intake and switched more to grains. That's kept our grocery budget very low compared to the average household. Our ethnic cooking uses a lot of grains anyway, and we are discovering new tasty recipes all the time.

The government inflation numbers are largely a joke. By definition, they exclude food and energy anyway, two of the biggest essentials of any family.

In the long term, people will have to reduce the meat intake to make things affordable. Less meat intake will free up more land to grow grains, which are vastly cheaper and can feed 10 times as many people.

[feh]

The observations above are anecdotal. Very easy to come to the wrong conclusion using such "evidence".

The numbers reported by the government are accurate. You just need to be aware of what is being measured.

[disneysteve]

I'm well aware of inflation. feh is correct about the government numbers. You need to understand what they track. Unfortunately it doesn't include real things that real people spend money on every day.

The smaller package sizes drive me nuts. I wish they would keep packages the same and just raise the price. Very frustrating especially if you are trying to follow a recipe. When something used to be 16 oz and now it's only 14, but the recipe calls for 2 cups, you're screwed.

So yes, despite government numbers, inflation is alive and well and quite clearly causing our money to not go nearly as far as it used to.

[marvholly]

As I recall the gov does NOT include the prices of volatile/seasonal items in the inflation index. Of course, food & gasoline are a BIG % of our spending.

How often does one sign a new apt lease/buy a house? How often does one buy a car? Cothes? Shoes? These are all couple times a year to once or twice in a lifetime purchases. Food & gasoline are at least bi-weekly or weekly purchases but excluded in the gov's calculations.

[scfr]

Yes, I'm aware of inflation on several levels.

When I calculate my net worth, I adjust the value of my home by the CPI-U so I do an on-line search for government data regularly.

I own some individual TIPS and periodically revisit whether or not I want to buy more.

Produce prices have definitely increased, but there are some pockets of value where prices have not increased or have increased only every so slightly (spinach, small size avocados, grapefruit when in season locally, and bananas come to mind immediately). We shift what produce we eat to where we perceive the value to be (blueberries were very reasonable this summer, and so were raspberries sometimes). It took me awhile to get used to the higher milk prices, and I'm sorry to say that I still can't wrap my head around increased seafood prices.

I remember the period of time in the mid-70's when inflation in the US was high. What we see these days is nothing like it was then.

[corn18]

I wonder why we have not had any inflation spikes in the last 30 years or so?

[avil_saver36]

Food inflation is very real. I think it's 5%+ especially on meats.

Some foods like bananas (someone else noticed this) have become cheap - maybe there is a new market they are being imported from. However the general food trend has been up considerably.

I think energy will be cheap in the foreseeable future. Just now, my natural gas rate was marked down by a ridiculous 33% (yay fracking). My electric rate has also been locked in long term at a very low 8.7 cents a kwh and hasn't increased in years. I also think we will figure out how to harness renewables at some point.

Everywhere else, inflation is very low, because salaries are stagnated. As long as the deadlock continues, inflation will just not show up. The government is trying to push the salaries up ($15 minimum wage laws), but my fear is that the corporations will just automate the jobs. If too many people remain unskilled, inflation will not tick up. At some point, people need to be employed at increasing salaries to start the economy going, which is still not happening.

[corn18]

Inflation has been flat for the last 30 years and so has the real minimum wage (adjusted for inflation). A jump to $15 / hour would put things way out of whack. What this chart tells me is that the buying power of someone making minimum wage has remain essentially unchanged for the last 30 years.

What's more interesting is what is happening to the median income, not the minimum income.



Notice this data is adjusted for inflation, so the fact that it remains flat is not as interesting as the fact that the buying power remains the same over the last 30 years, but has decreased over the last 15 years.

This is also interesting:



So, I must be missing something with all the rhetoric about decreasing wages. Over the last 30 years, the buying power of a minimum wage salary and a median wage salary has essentially not changed (it's actually risen slightly).

[avil_saver36]

The stats on the income side mean absolutely nothing if you aren't taking debts in the equation.

Student debts in the last 7 years alone have increased something like 220%. Credit card debt has exploded. Healthcare costs are out of whack. I believe the student loans and healthcare costs are crushing the middle class. Healthcare costs are in particular being compounded by the fact that people today are much weaker and unhealthy than in the past.

Finally, the fact is that the net wealth of the world has increased tremendously, and there are ample charts that show that almost all the gains have gone to the so called 1%. At this point, the 1% already own the major corporations of the world. At some point in the future, they will own more, and the middle class will increasingly be at the mercy of their policies. The governments will be powerless.

In my view, the middle class incomes are a serious problem. At the same time, I don't know what policymakers should do to change the macro economic picture - I am not an economics person.

[disneysteve]

Healthcare costs are in particular being compounded by the fact that people today are much weaker and unhealthy than in the past.

Can you elaborate on what you mean by this statement, and what data you are basing it on? The average lifespan continues to climb, cancer survival rates are ever-increasing, death rates from most diseases are decreasing, medical innovations are always coming along to treat previously untreatable conditions. People are living longer healthier lives than ever, except you seem to be saying just the opposite.

[avil_saver36]

Can you elaborate on what you mean by this statement, and what data you are basing it on? The average lifespan continues to climb, cancer survival rates are ever-increasing, death rates from most diseases are decreasing, medical innovations are always coming along to treat previously untreatable conditions. People are living longer healthier lives than ever, except you seem to be saying just the opposite.

The average lifespan is higher because of early childhood immunizations and a drastic cut in the infant mortality rates. Other than that, people are way more obese, way more depressed, and are prescribed way more medications than in the past. Couple that with increasing diagnosis of children with down's syndrome, aspergers, ADD and God knows what else...I think we are sitting on a healthcare timebomb.

Sure, we are living longer, but the life expectancy will taper off and may even fall a little. As for being happy, I think happiness is subjective.

I do apologize though that I don't have hard data to back my inferences. If you do a web search, you will find people in both groups - just like you do for climate change discussions.

[97guns]

i try to beat inflation by stocking up on stuff if i find it cheap, i still have around 10# of bacon that i bought for .99/lb and im eating yogurt and heads of lettuce that was 3/$1, when i was eating more bread i would go to the day old bread store, i like to shop discount grocery stores in my city

[disneysteve]

The average lifespan is higher because of early childhood immunizations and a drastic cut in the infant mortality rates.

If you do a web search, you will find people in both groups - just like you do for climate change discussions.

You can find people who believe in all kinds of nonsense on the internet so that isn't a very strong argument for anything.

Lifespan is higher for many reasons. You listed just a couple. Oddly, however, you then mention prescribing more medications as if it's a bad thing. What do you think is keeping people alive who would otherwise have died 10 or 20 years ago? Five years ago, hepatitis C was considered incurable. We now have medications that are showing greater than a 95% cure rate. So folks who might otherwise have developed liver cancer and died from their hep C are now being cured and living normal lifespans. Cancer treatment is dramatically better than it was a generation ago and the death rate reflects that.

You mention obesity. I'll agree that obesity is a tremendous problem, but even that isn't causing the deaths that you might expect. Why? Because of those medications you mentioned as well as interventional procedures. We're now able to better treat the obesity-related diseases and keep people alive and productive despite their obesity whereas years ago, they just would have had a heart attack and died.

[avil_saver36]

You can find people who believe in all kinds of nonsense on the internet so that isn't a very strong argument for anything.

Lifespan is higher for many reasons. You listed just a couple. Oddly, however, you then mention prescribing more medications as if it's a bad thing. What do you think is keeping people alive who would otherwise have died 10 or 20 years ago? Five years ago, hepatitis C was considered incurable. We now have medications that are showing greater than a 95% cure rate. So folks who might otherwise have developed liver cancer and died from their hep C are now being cured and living normal lifespans. Cancer treatment is dramatically better than it was a generation ago and the death rate reflects that.

You mention obesity. I'll agree that obesity is a tremendous problem, but even that isn't causing the deaths that you might expect. Why? Because of those medications you mentioned as well as interventional procedures. We're now able to better treat the obesity-related diseases and keep people alive and productive despite their obesity whereas years ago, they just would have had a heart attack and died.

I will close the discussion about people's health trends since it doesn't have anything to do with the OP's original post.

I think my point about out of control healthcare costs is agreed upon. Tomhole put a bunch of graphs pointing that the real income of a household has remained relatively flat (actually even there is almost 8% drop). However when you consider healthcare, education and to a certain extent, even housing, those factors easily explain why the middle class is getting wiped out. Also, I second OP's observations on spiraling food costs. All of these are not measured by the government inflation index and are easily eating away most of the people's paychecks.

At the same time, the world collectively has become richer. The food production is at an all time high. We produce more goods, we have more ability to build, and as you pointed out, we have an ability to treat illnesses and make people live longer. On a separate note, people living longer with the same income and same earning span will also make them poorer BTW. None of the riches have made it to the middle class.

Considering all factors, a family earning a median income of $52K is poor/lower class in a majority of the country in my opinion. There is no way anywhere in this country that income can give you a middle class living unless you are really self sufficient to the extent of growing your own food and build your own house on a land you own.

In Maryland where I live, the median income is already $72K. Median! Ourselves - we feel far from rich - heck even comfortable. I have to budget very aggressively to ensure that we remain on the right path. Even one night of eating out or purchasing some clothes requires careful consideration. In my view, you are budgeting for basic life requirements such as food, clothes and sometimes even medicines, you are middle class - which we are at 3 times the stated median income of a middle class American.