Is everything expensive… or am I just poor?
The financial plight of Americans since the Great Recession has been well documented, but a frequently overlooked economic trend has been wage stagnation. As this meme inquires, are goods becoming more expensive, or are we all just becoming poorer?
Let’s first look at the price of milk, bread, and bananas– three useful economic indicators of whether goods are becoming costlier, compared to inflation (which has averaged 2.1 percent) from 2004- 2014.
Milk: From May 2004 to May 2014, the price of milk increased from $3.37 per gallon to $3.74 per gallon. Accounting for inflation, which in 10 years should increase the cost of milk about 70 cents, it appears that milk has remained relatively cheap; in fact, it has undercut inflation.Bread: From May 2004 to May 2014, the price of bread increased from 96 cents per pound to $1.40 per pound. Accounting for inflation, which in 10 years should increase the cost of bread a little over 20 cents, it appears that bread has become somewhat more expensive.Bananas: From May 2004 to May 2014, the price of bananas increased from 49 cents per pound to 60 cents per pound. Accounting for inflation, which in 10 years should increase the cost of bananas a little over 10 cents, it appears that bananas have not become more expensive either.
So, in light of this, we should revisit the second question in the meme: are we all just becoming poorer?
The answer is yes.
According to the Economic Policy Institute, “the vast majority of U.S. workers—including white-collar and blue-collar workers and those with and without a college degree—have endured more than a decade of wage stagnation.” Predating the Great Recession (between 2000 and 2007), the median worker experienced slow wage growth of only about 2.6 percent per year, and from 2007- 2012 (during the recession) wages fell, which in essence, means that wages have remained flat.
So as far as this meme is concerned, we are all just poor.