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Some personal anecdotes. I did undergrad 12yrs ago in a university in Southwest. My niece recently enrolled in the same program in the same school - the tuition
by mercy_dude 5y ago
Some personal anecdotes. I did undergrad 12yrs ago in a university in Southwest. My niece recently enrolled in the same program in the same school - the tuition my sister and her family are planning to pay for her is easily double of what I paid (or May be more if I count her cost of living such as university residence).
My sister in law has diabetes and the insulin prices they pay has also doubled compared to what she used to pay 10yrs ago until she moved to Canada recently.
I have been trying to buy a house for a while now and prices here in the area where I lived and live now have easily more than doubled (facepalm for not buying 5yrs ago). Same thing with rent in any average North American city.
These are the three most basic expenses a family in a first world country is expected to bear. All of them have easily doubled in the last 10yrs.
I am not sure in what way the Fed and their economists are measuring inflation but it sure as hell doesn’t quantify the hardship average families have these days especially when the wages haven’t gone up. I may be the lucky one working in tech but certainly my sister or the SIL’s family are not. Even for me the housing prices have easily outpaced my tech salary growth in the past few years where I am.
I just find the policy makers such as Fed are delusional when they say everything is fine because inflation is averaging 2%. You can come up with whatever number you want, but at the end if it’s disconnected from the economic reality and primary expenses for a family it doesn’t matter because your policies are just not going to affect the middle class as we have been seeing in past decade or so.
- slyall 5y agoThe three examples you cite, Education, Medicine and Housing are the three areas where prices have increased greatly in the last 20-30 years. There are very few others. Part of the problem with inflation calculation is giving the right weight to those.
- skyde 5y agoWell what % of your annual income are going to those. I agree luxury good should have a weight of 0 but Housing and Education is need by everyone and are a major part of where your salary go to.
- gizmo686 5y agoAccording to BLS data, drugs have had slower inflation than the CPI, averaging 1.59% since 2011: https://www.in2013dollars.com/Medicinal-drugs/price-inflation/2011-to-2021?amount=20 https://www.in2013dollars.com/Medicinal-drugs/price-inflatio... Insulin in particular has been a national contraversy around price increases, so I suspect its cost went up faster than the average drug. BLS claims that medical care overal inflated at an average of 2.74% annually since 2011, which is faster than CPI https://www.in2013dollars.com/Medical-care/price-inflation/2011-to-2021?amount=1000 https://www.in2013dollars.com/Medical-care/price-inflation/2... Education has been bad, at 10.84% https://www.in2013dollars.com/Education/price-inflation/2011-to-2021?amount=20 https://www.in2013dollars.com/Education/price-inflation/2011... Rent saw 3.21% https://www.in2013dollars.com/Rent-of-primary-residence/price-inflation/2011-to-2021?amount=1000 https://www.in2013dollars.com/Rent-of-primary-residence/pric...
- anm89 5y agoAnd consist of probably 80% of the fixed expenses of most people. So while the exact weight is up for debate, saying that inflation is incredibly high is a reasonable argument.
- jjk166 5y agoInflation is about money supply. If the price of insulin is high because your money is worth less, that's inflation. If the price of insulin is high because a pharma executive is stepping on your neck, that's not inflation. How much you spend on services provided by poorly regulated monopolies is irrelevant.
- _Microft 5y agoIn Germany, the inflation rate is calculated by looking at the development of prices of a set of goods that an average consumer would buy. That will include things like electronics that become cheaper all the time which skews the rate for people who do not buy these goods. It might be similarly done in the US? Edit: it seems so: https://en.wikipedia.org/wiki/Market_basket https://en.wikipedia.org/wiki/Market_basket
- logfromblammo 5y agoDoubling over 10-12 years is an average annual inflation rate of about 7% . It's not 2%, but it isn't 15% either.