The impact of inflation on our lives

Foreword

Have you ever had such an experience? On a weekend after hard work, you drive to the supermarket and are shopping for ingredients for the next week's meals, when you suddenly find that some items on the shelves have quietly raised their prices. 

For example, the Kirkland brand of milk, which was original $4.23 a gallon, is now $4.70 a gallon. Doesn't look like much, right? But after you've settled for the same amount of ingredients at the counter as you did last week, you realize you've spent 10% more of your budget than you did last week. 

Just after you left the supermarket unhappily and came to the parking lot to drive home, you found that the car was going to run out of gas. So, you went to the gas station you used to go to. Guess what? Gasoline's price has also gone up, and by a lot. You hurriedly look up your salary slip from your phone, which has not been raised for years or even decades. At this time, you are like a frog cooked in warm water, and you realize it with hindsight. 

There is absolutely something wrong with this society.

So. What causes inflation?

There are many causes of inflation, but for now, the biggest one has to do with the COVID-19 pandemic. According to Hernan Moscoso Boedo, a professor of economics at the University of Cincinnati, the COVID-19 pandemic and subsequent supply chain disruptions, combined with the easy monetary and fiscal policies caused by the pandemic, have led to persistent inflation.

Hernan Moscoso Boedo, Ph.D., associate professor of economics at the University of Cincinnati Carl H. Lindner College of Business.

He said in the interview, “The Fed is now trying to control the consequence of increasing the money stock by raising interest rates, and they have a tough job there because they want to balance controlling inflation versus stopping the economy too hard. The risk there is getting into a recession while they're trying to control inflation."

Translating the above words in human language is that the incompetence of government management has led to the expansion of the epidemic, thus hindering people's work. And people who are unable to work under home quarantine will naturally have no wages. To keep people under home quarantine alive, the government has to print more dollars to financial aid them. However, the value of the dollar does not come out of thin air but is created by the hard work of working people in the real industry (non-financial industry). When the number of banknotes exceeds the actual value that people produce, the banknotes themselves naturally depreciate.

Current situation

According to the U.S. Bureau of Labor Statistics, the consumer price index for consumers in all cities rose 9.1% in the 12 months to June 2022. Domestic food prices rose 12.2%, and energy prices rose 41.6% over the last year. In the energy category, motor fuel prices (including all types of gasoline) rose 60.2% year over year. Electricity prices rose 13.7%; natural gas rose 38.4%.

In contrast, looking at people's median wages (average wages don't count, because that's not representative of the proletariat at large. The presence of capitalists makes the average number inflated) is not optimistic. According to the U.S. Bureau of Labor Statistics, in the third quarter of 2022, the median weekly earnings of 120.2 million full-time salaried workers in the U.S. was just $1,070. Although this was 6.9% higher than the same period last year, it was still less than the increase in inflation.

How do people react?

Inflation is inevitable and unstoppable in today's society, at least in a capitalist society. But people can still respond to it and improve our situation. Since the cost of the means of subsistence inevitably rises, it is only natural that we workers (even mental workers are considered workers) who do not master the means of production demand a rise in wages. The means of struggle are varied, including but not limited to protests...and strikes.

Of course, strikes are an extreme resort. If we are not forced into a desperate situation, it is not recommended to use this method to expand our rights. Because in capitalism (or a revisionist society in a socialist guise) a strike is a risky move that is not welcome by the bourgeoisie and bureaucracy. If there is no action plan, cohesion, or proper operation, people may easily pay the price of political, economic, and even...well, life.

Map data from IRL SCHOOL Labor Action Tracker.

That being said, there are still ongoing strikes every year across the country. According to Cornell University's Labor Action Tracker, there have been 180 strikes involving 78,000 workers in the first six months of 2022 so far, a considerable increase from the 102 strikes involving 26,500 workers in 2021.

However, the increase in strikes remains small from a macro perspective. Since most of us are still not forced into the predicament of being unable to feed ourselves, which provides the ground for our tolerance of the status quo.

In response to the interviewee's request for privacy, the following random interviews on the streets do not attach the interviewee's portrait.

• (Encountered by chance at the gate of GW supermarket) Ms. Zhang: Inflation? Are you kidding me, does this even need to be asked? Is there anything on the market that doesn't go up in price? Even my husband's favorite squid is more expensive than before... um, how much? Anyway, what used to cost a few dollars a box now costs more than a dozen dollars a box. What else could it be if it wasn't inflation? Forget it, let's not talk anymore, I'm still rushing home to cook. (translated from Chinese)

• (Encountered by chance in a Costco parking lot) Ms. Kristin: If you ask about the impact of inflation... it does have an impact on our family. Hmm... quite a lot. For example, have you ever bought Kirkland brand pistachios at Costco? No? You should try it...ahem, anyway, my grandmother likes to chew on these nuts. It used to be cheap, like $15 a bag, but now it's almost $20 a bag. (She looks at the receipt slip in the shopping cart) Oh, $19.49 a bag to be exact. Did this help your project?

• (Encountered by chance at the 76 gas station) Mr. Mason: Inflation happens every year, and so does the price of oil and the price of cigarettes. They go up and down from time to time but gradually rise up eventually. (He inserts the gas gun into the gas filler of the car) Does it affect my life? Of course, but there's nothing we can do about it, isn't it? All we can do is try our best to adapt to this environment. 

Afterword

I chose to talk about this topic mainly because I think this social issue has broad implications for most of us. No matter what level or field it is. Down to everyday items and gasoline energy, up to virtual reality devices and computer accessories. When I realized that even the rice and vegetables I eat every day were starting to rise in price, I thought this social issue was worth talking about.

References

https://www.uc.edu/news/articles/2022/07/uc-economics-professor-explains-why-inflation-is-persisting.html

https://www.bls.gov/opub/ted/2022/consumer-prices-up-9-1-percent-over-the-year-ended-june-2022-largest-increase-in-40-years.htm

https://www.bls.gov/news.release/pdf/wkyeng.pdf

https://www.theguardian.com/us-news/2022/sep/26/striketober-unions-strikes-us-october

https://striketracker.ilr.cornell.edu/