Inflation - Many Americans Lost Ground in 2007
Flexo at Consumerism Commentary posted the latest inflation numbers the other day. I’d forgotten they were coming out until I read his post and then, later, saw articles in the paper.
Like you need to be told, inflation was up this past year - 4.1% to be exact. And that’s if you believe the federal government’s numbers, which I believe underestimate true inflation.
Take a look at the following figures for 2007 and see if you can spot what’s wrong with this picture.
Food +4.8%
Health insurance +10.1%
Gas +8.2%
Electricity +3.9%
College tuition +6.2%
Clothing -0.4%
Natural gas -1.4%
Average weekly earnings +0.9%
Awesome! The average person in the U.S. is getting poorer! (I say this because for the vast majority of Americans, non-wage income is miniscule.)
I gotta lighten up my posts. This is getting depressing.
January 18th, 2008 at 8:10 am
You’re right that true inflation numbers are much higher, the government acknowledges this but the challenge has been on how to calculate it properly. The current measure is mainly meant to be used as a benchmark to see how it changes over time. Even using this understated inflation number the median household income has been decreasing since about 2001. Its the first time since the 1920s where this has happened for this long. In the higher income brackets increases are far outpacing their historical norms and in the middle and lower they are decreasing. This leads to one obvious thing — a bigger and bigger wealth divide. The divide is now the largest its ever been in American history, the next closest was during the 1920s.