An article which covers the subject of “real inflation” in America which as everyone knows far exceeds the “official” inflation rate of 2%.
The situation is the same in NZ — everyone in Waikanae knows the rampant annual KCDC rates increases well above the official inflation rate (presently 1.5%), but it’s not confined to that: last month we got a shock when this year’s insurance renewal arrived — $2,921 just for the house and contents (and we’ve only made one claim in 13 years for $1,300…)
While working on a story on inflation and shrinkflation, I quickly zeroed in on the concept of “workarounds” as an alternative, perhaps superior, way to gauge the true state of our economy. I define workarounds as the changes individuals or families (or businesses) must make in their daily living to adapt to a world of rising prices. If nothing else, these examples, taken in the aggregate, challenge the conventional wisdom that inflation is “low” or “contained,” or that the economy is just fine, thank you.
As decades have passed, the list of workarounds families have utilized to deal with rising prices has rapidly grown.
Women and mothers entering the workforce in massive numbers – the disappearance of families where one income was sufficient to maintain a “constant standard of living” – might be the earliest and most important workaround on my list. Other trends from this expanding list include:
Shoppers switching to less expensive store or private-label brands, families “substituting” hamburger or chicken for steak, buying from “value” menus, couponing, shopping at discount or “dollar” stores more often, buying in bulk to get the lowest unit-cost (think Costco), buying more items at yard sales or from Internet swap meets, “cutting the cord,” cancelling the land line, getting fewer haircuts per year, taking clothes to the dry cleaners less often, cutting out the maid service or paying for it fewer times each month, attending sporting events less often (here, here, here and here), going to the movies less frequently, playing golf or hunting less frequently, dropping out of country clubs and civic clubs, going to the dentist less often, cancelling newspaper and magazine subscriptions …