#economy #wages #prices #PerceptionOfEconomy #EconomicData
The data show the economy is good, even robust.
But people don’t always see it that way. They see prices that are higher than a few years ago on almost everything.
So why the difference between data and perception?
First, almost everything costs more than a few years ago for a few reasons. First, some companies are trying to make up for their losses during the pandemic. Some may call that price gouging, but it becomes that only when prices stay up AFTER the losses have been made up.
Secondly, almost everyone is getting paid more than they were a few years ago. If you are not in this category, look around for other opportunities. They are out there, in many places.
To help pay for those higher wages, companies raise the price of what they sell or make.
There are certain categories of prices that have unique issues. Housing (rents and purchases) prices are up. There are lots of entities out there competing with individual families for housing. They buy properties for cash and rent them out at rents that are often unaffordable for many.
That takes many houses off the market for individuals, and raises rents for renters.
Auto insurance and repairs are another unique category. Today’s cars are a lot more complex than those from the past. What may look like a simple repair gets complicated because systems in the cars may have to be recalibrated. That could double or triple the cost of a simple repair.
The same could be said for home repairs. That may be why repair insurance companies have a market, and why auto and homeowner’s insurance in general have risen in price.
No matter who serves in the U.S. government, he or she can only do so much to bring prices down.
The good news here is that if you are making more money in your job, most data show that your higher pay is outpacing inflation.
That begs the question: would you prefer lower pay and lower prices, or the current situation? Before answering that, know that the data again shows price inflation coming down.
We may never see $1 a gallon gasoline again. Those pandemic prices, when no one was going anywhere, may not return unless there is another pandemic. No one wants that.
Food prices are also affected by distributors, who are raising their prices. Also, one has to consider climate issues that affect the growth of what we eat. If food can’t grow as well, or gets destroyed in storms, what is not affected is going to be more expensive.
Therefore, be skeptical of anyone who runs for public office who says he or she will lower prices.
There may be things they can do to mitigate inflation, but the government can’t subsidize everything, and it has limited ability to force producers and sellers to lower prices on what they make or sell. The main thing that will affect pricing is whether people buy things at the price charged. Some necessities have to be bought, but we may want to try to use less of those if we can.
The government can lower your taxes on certain things as one mitigation. But, the government can’t control pricing, nor do we necessarily want it to.
Certainly, your parents or grandparents paid less to live in their younger years than you do now. But, in that time, much progress has been made. Society, as a whole, has seen much improvement.
The betterment of society comes at a price. Most of us do not want to go back to the “good old days.”
Peter