Inflation is one of those tricky things to comprehend; why is the same milk that I bought yesterday for $2 now costing me $2.50? It's the same milk that was in the store; nothing has been improved about this milk, it hasn't become cheese, deliciously creamy cheese... no, nothing has been changed, so what happened?
From what I gathered from every news program attempting to explain it, inflation is caused by either an increase in demand or a decrease in supply, so either more people want to buy something, or there is less of it to sell. And that's it, those are the two main reasons, so when people blame other circumstances, if they cannot link it to either of those reasons, they are likely just making things up.
I get really annoyed when people with platforms will use inflation as a reason to further their own policies; maybe it's the millennials not investing enough, perhaps it's superannuation funds, maybe its too many tourists or too few; one of the most annoying things for me is hearing people blame these other reasons because I would be shocked if they actually care about inflation or if they have a legitimate reason to linkt the two.
Because it is a very serious situation, inflation is a killer. It threatens a lot of stability in the economy and regular people's lives. An average person can be put so far behind simply from not keeping up with inflation. Many more people, including maybe even you, are struggling to buy the day-to-day groceries they purchased earlier this year. The standard of living is dropping at the same time the cost of living is rising. AND WHAT CAN BE DONE? Is it the government that needs to fix this? Is the responsibility just on the regular person to somehow find more money to buy the basic staples? And by this, I am not referring to the newest sports can but things like sliced bread and cheese.
So as it has been explained to me, the simple theory is that governments try to limit a yearly inflation rate to as small an amount as possible and that wages will bump up a little bit ahead of it. But that isn't happening and that, in my opinion, is why this new inflation crisis is so dangerous.
Overall, people are worse off than their counterparts ten years ago, less paid, more in debt, and overworked; it seems to be, by most measurable factors, times are tougher, and we need to appreciate this. We need to understand that inflation will hit harder than it would normally have because of this. I heard an interesting thing about inflation in Belgium, and both the public and private workforces have their salaries pegged to inflation. As a result, workers are looking at a 12% increase in wages over the next two years. Meanwhile, the workforce overall is expected to get maybe 2-5% over two years here. And I say that overall because I heavily doubt that existing workers will pass on this increase and instead will be predominantly through 'new hires'.
So most likely, we will be left with this inflation, and many of these prices will be baked in, and we will have to get used to that. Get used to the fact that a head of broccoli now costs the equivalent of 30 mins work, the fact that houses prices are higher than ever, and if you were not on the property ladder before covid, it is now highly unlikely that you will be able to get on now. That's life; that's how it goes. Nothing more to be done… or is there?
Is there possibly something that can be done about inflation, about property prices? Is there a way for us to ensure that younger generations don't get left behind in a mad dash to buy anything connected to a patch of dirt? Maybe there are perhaps proper resources for building affordable housing (in a way that doesn't ghettoise said houses); maybe there is a way to ensure that all wages rise evenly so that people can buy the same groceries that they purchased before. I wonder what kind of country we would be if that were to happen. Would there still be the same divisions? Would people still demonise groups of people purely based on their socio-economic basis?
I don't think it's likely that we will live to see this world, but I think it's worth it to try.