We know how tough the economy is right now, with unemployment rates being high, the cost of goods and services escalating; when did a martini start to cost $15 or $12 for a glass of wine, $8 for a beer or a gallon of gas at $3.69. These costs go up $0.25 here, $0.50 there until one day you look at your bill and say “Holy shitake mushrooms Batman, I just paid $12 for a glass of wine!” WTF? Then of course there is my annual favorite, the fact that natural gas is always in short supply every winter in New England. Every year winter comes and every year there is a shortage? Hmm, is there something going on here.
You betcha! (What ever happened to that Tina Fey look alike anyway?) We are bombarded by the government and the media that there really is no inflation, that productivity improvements have kept costs down, that technology keeps making items more and more affordable. Well here are the headlines for you. We have been squeezed by the ever growing gap between real wages, defined as the income of an individual after taking into effect the impact of inflation on purchasing power.
Here is what has happened to real wages in the US over the last 10 years. A 39.8% increase but lagging well behind the increase in expenses as you will see below:
Look at the increased costs of Energy, Medical Care and College Tuition and Fees. Energy cost increases have been just staggering and are likely to get much worse over the next few years. Medical costs, up 60% over the time period, but once we build in the reduction in coverage, the increases in deductibles, the co-pays and the amount covered by procedure, the impact on your wallet is far greater than what is represented in the graphic. And how about education costs. If you have kids, you know the pain here and every year it goes up, never down. Right there with the increase in energy.
So here is the problem; quality of life. With all of these costs continuing to escalate, regardless of how great a budget manager you are, as the allocation of the pie continues to shift to these necessary expenses, the remaining funds for that vacation, savings account, new car, clothing of just enjoying the little pleasures in life goes down, resulting in more stress in finding ways to increase income/cut costs, less frequently going out with friends and family and overall less fun. And this chart does not even include the increase in federal and state taxes, property taxes and all of the other consumption taxes that we pay.
These trends are very well established and continuing. For many Americas they have already passed the breaking point and for many others the breaking point is on the horizon. “Help me Obi Wan Kenobi, you are my only hope.” Princess Leia
“There has been a great disturbance in the force.” Obi Wan Kenobi
How do we stop this madness?
2 thoughts on “While You Were Asleep…..”
Hi Steve, I agree with your consternation over prices – although after recently moving back to NE Ohio from SW Florida, I can say I was delighted to see a wine list with many choices at $15 per BOTTLE as opposed to the glass.
When looking at the “big 3” in your post (energy, transportation, and medical) I have to admit I suspect our big government ponzi scheme is manipulating our economy for their own benefit, but I dont think the numbers you’ve shared don’t tell the whole story. A person’s lifestage and personal choices directly affect the impact of these increasing costs. A long time ago, some told me “to be rich, want less”. I can’t say I’ve exactly embraced this, but then again, I am in my prime earning years in a progressive industry where my real wages have outpaced the trend. In my experience, those most affected by the gap you point out are either those in the twilight of their best earning years or those who live an aspirational lifestyle they can’t afford. I contend that for every 4 Escalades on the road, there are 3 people behind the wheel who can’t afford it!
I am reminded of a tenant I had once who had trouble paying me his rent because “the gas bill is too high” – while he had the thermostat at 78.
The search for a reliable method of producing energy from renewable resources is more urgent today than ever before. Did Nikola Tesla truly invent a “free energy device”?