More people should be talking about this. The costs of my basket of *essential* expenses is inflating at a much higher rate than CPI. The following expenses have increased by double digit percentages this year (and health care premiums are expected to increase by double digit expenses next year): car insurance (increased despite no changes to coverage, no claims, and no tickets); property taxes (proposed double digit tax increase later deferred for one year by the town after reassessment caused consternation and a near riot on Facebook); food (I do not track detailed items, but examples include beef, chicken, eggs and other essentials); energy (heating, cooling, electricity); and health care premiums (proposed double digit increase).
Employers use CPI as the basis for pay increases. Prior raises have been 2.5%, slightly lower than the "official" rate of inflation per CPI (which is an inaccurate measure for my expenses) and well below the cost increases on my essential expenses. The loss of purchasing power is tangible and consumers need to be vigilant about where they spend their money in this environment. Especially single people, as you suggest, who do not have the economies of scale that come from a dual-income couple sharing a residence.
The aforementioned expenses would be equivalent to the low end of Maslow's hierarchy of needs. Food, shelter, energy, health care and auto insurance premiums are essential items. One could also argue that wi-fi and cell phones are essential in today's increasingly digitally dependent environment.
The best a citizen can do is shop around for better rates, but there is no avoiding these expenses. Substitution is an option for some items, like food, but not an option for health care premiums. Our "competitive" markets are increasingly oligopolies, which reduced consumer choice and increases the pricing power of these companies. The car insurance premium expense is a particularly annoying example. These insurers pay top dollar to advertise during the Superbowl or other major sports events and employ highly visible spokespeople and star athletes (such as Kansas City Chiefs quarterback Patrick Mahomes and his coaches and teammates, for example). The consumer pays for this in their premiums.
Companies also use stealth price increases to drive growth on consumer products by keeping the price the same while cutting the amount of product delivered. Remember when a beverage used to be 12 ounces (now 11.2)? This stealth inflation is sneaky but pervasive.
Loss of purchasing power due to inflation is indeed one of the largest threats to the consumer economy. Your suggestions are good ones.
Wow, thanks for your amazing and in-depth comment!
Yes, there should be more people discussing this problem.
I saw a video at the end of last year or the start of this year of someone on TikTok showing the prices of what the person bought from Walmart the year before and the year after. The prices increased by at least 100%, if I remember correctly, for the same items.
More people should be talking about this. The costs of my basket of *essential* expenses is inflating at a much higher rate than CPI. The following expenses have increased by double digit percentages this year (and health care premiums are expected to increase by double digit expenses next year): car insurance (increased despite no changes to coverage, no claims, and no tickets); property taxes (proposed double digit tax increase later deferred for one year by the town after reassessment caused consternation and a near riot on Facebook); food (I do not track detailed items, but examples include beef, chicken, eggs and other essentials); energy (heating, cooling, electricity); and health care premiums (proposed double digit increase).
Employers use CPI as the basis for pay increases. Prior raises have been 2.5%, slightly lower than the "official" rate of inflation per CPI (which is an inaccurate measure for my expenses) and well below the cost increases on my essential expenses. The loss of purchasing power is tangible and consumers need to be vigilant about where they spend their money in this environment. Especially single people, as you suggest, who do not have the economies of scale that come from a dual-income couple sharing a residence.
The aforementioned expenses would be equivalent to the low end of Maslow's hierarchy of needs. Food, shelter, energy, health care and auto insurance premiums are essential items. One could also argue that wi-fi and cell phones are essential in today's increasingly digitally dependent environment.
The best a citizen can do is shop around for better rates, but there is no avoiding these expenses. Substitution is an option for some items, like food, but not an option for health care premiums. Our "competitive" markets are increasingly oligopolies, which reduced consumer choice and increases the pricing power of these companies. The car insurance premium expense is a particularly annoying example. These insurers pay top dollar to advertise during the Superbowl or other major sports events and employ highly visible spokespeople and star athletes (such as Kansas City Chiefs quarterback Patrick Mahomes and his coaches and teammates, for example). The consumer pays for this in their premiums.
Companies also use stealth price increases to drive growth on consumer products by keeping the price the same while cutting the amount of product delivered. Remember when a beverage used to be 12 ounces (now 11.2)? This stealth inflation is sneaky but pervasive.
Loss of purchasing power due to inflation is indeed one of the largest threats to the consumer economy. Your suggestions are good ones.
Wow, thanks for your amazing and in-depth comment!
Yes, there should be more people discussing this problem.
I saw a video at the end of last year or the start of this year of someone on TikTok showing the prices of what the person bought from Walmart the year before and the year after. The prices increased by at least 100%, if I remember correctly, for the same items.