As Americans Make Less, Food Prices Continue To Soar
Household incomes in America are falling. In fact, according to Politico, “Income for American families declined more in the years following the economic recession than it did during the official recession itself.”
During the recession, which economists say lasted from Dec. 2007 to June 2009, the median annual household income fell by 3.2 percent, from $55,309 to $53,518, according to a report authored by two former U.S. Census Bureau officials. But in the post-recession period from June 2009 to June 2011, the figure fell by 6.7 percent, from $53,518 in June 2009 to $49,909 in June 2011.
This is bad, but what’s worse is that even as household incomes fall the things we buy are getting more expensive. Including food:
Stable food prices have been a silver lining in the weak economy. That is changing fast.
The U.S. Agriculture Department on Tuesday said it expects retail food prices to increase 3.5% to 4.5% this year, after climbing just 0.8% in 2010, the slowest rate since 1962.
The midpoint of the new USDA outlook signals the sharpest acceleration in the food inflation rate from one year to the next since 1978, and makes the increase itself the biggest since 2008, when prices rose 5.5%.
There are a lot of things you and I can do without if they get too expensive. For instance, inflation in consumer electronics might be inconvenient because it would mean you couldn’t buy that new iPad or phone you had your eye on, but those are things you can live without.
Food, unfortunately, isn’t something we can live without. Which isn’t to say that there’s not some elasticity in that market. For instance, we could eat out less. And a lot of us are carrying a few extra pounds. But keep in mind that being able to eat out, and eat what we want, now (not to mention being able to buy an iPad if you want one) speak to our quality of life.
If things get more expensive thanks to inflation, and if we can afford fewer things because our wages are shrinking, we have a lower quality of life.
Tags: Economy, Inflation
