Your standard of living is defined as the degree of wealth and material comfort available to a person or community. Your quality of life is similar, the standard of health, comfort, and happiness experienced by an individual or group: the things that are needed for a good quality of life.
Inflation is a general increase in prices and fall in the purchasing value of money; this condition can lead to a lowering of your family’s standard of living.
To understand what constitutes “health, comfort, and happiness,” we need to define the difference between needs and wants in life. Every family needs a warm, dry place to live and electricity, drinking water, and waste disposal to have an adequate shelter. They also need adequate food to feed the family, serviceable clothing, and reliable transportation to get them to and from work.
Each of these “needs” costs money, and when inflation occurs, it can impact how you satisfy your wants. Wants include the “finer things in life,” such as a trip to the water park, a movie ticket, tobacco or alcohol, and cellphone upgrades. You don’t “need” any of these things to survive, but some are nice to have.
Inflation can impact both your standard of living and your quality of life. In December 2022 the Harvard Business Review put it this way: “Inflation is defined as a rise in prices across an economy, and in 2022 it has emerged as one of the biggest threats to global prosperity. When prices rise unexpectedly, money doesn’t go as far as it used to, which can trigger demands for raises which then cause more inflation. When prices rise really quickly, the basic functioning of an economy can break down. For example, in periods of “hyperinflation,” people rush out to spend money the moment they get paid, because every hour they wait to spend means higher prices” (“What Causes Inflation?” Dec. 23, 2022).
It hasn’t changed in 2024. A good example of inflation can be demonstrated by the size reduction of many products while the prices either remain the same or have slightly increased. I have an old coffee can from a couple of years ago; the weight was 33 ounces. A newer one of the same brand I bought last week was a little more expensive, but only weighs 26.8 ounces. Almost all other products have also reduced their size, so we spend more for less.
How do rising wages also contribute to rising costs of goods and services? For example, the recent California mandated minimum wage increase for certain fast-food restaurants resulted in reduced staffing and price increases. The people working there had their hours reduced or they lost their jobs to make up for the increase in labor costs, and consumers paid more for their products.
Thus, both the workers and their customers suffered because of a shortsighted government mandate. Many fast-food joints simply closed when their “loyal customers” could no longer afford a burger and fries. This had an impact on both the businesses and the quality of life for the families and their kids who liked fast food and considered it a treat.
Meanwhile a similar mandated wage increase for health care workers in government facilities was “delayed” when Gov. Newsom found out it was going to impact the state budget. You see, politicians don’t care whether you can afford a hamburger, but if it impacts the government budget they panic.
Many think the current rapid rise in inflation is caused by the government’s reactions during the COVID crisis. Shutting down large sectors of business, pumping billions into the economy to “stimulate” it—or as some say “compensate” the population for the inconvenience of their actions—created a rise in costs as supply couldn’t meet the demand and prices went up.
In November there is an election. Only registered voters can make choices, and all of you, no matter what your political party affiliation is, will have a chance to choose a leadership team. If we keep electing people from the same political party that’s in power in California now, we can’t expect anything to change; we’ll still get less and pay more for it.
The biggest question you should be asking yourself before voting is: “Is my family’s standard of living any better than it was four years ago?” I am guessing that at your house, just like mine, the answer is “no.”
If that’s the case, then we need a new political leadership team in California and at the national level. Δ
Ron Fink writes to New Times from Lompoc. Send a letter for publication to letters@newtimesslo.com.
This article appears in Jun 27 – Jul 7, 2024.
Well we have actual data that real wages have grown faster than inflation over the last 14 months and that California added thousands of fast food jobs last month alone, and that the US it outpacing all other developed countries in basically every economic indicator, but Ron Fink held two coffee cans in his hand and one was lighter than the other, so are you really better off?
Yes, it is better. As a retiree, the market is important to me for my present and future income and it has been going gangbusters. Further, the higher wages and historically low unemployment have been good for my working family and friends. The dark cloud over all this is the extremely unaffordable cost of housing locally. But that is the result of decades of bad decisions by local governments and won’t be affected by any presidential election.
My standard of living is without a doubt better than it was 4 years ago. The biggest drain on my finances is my cost of housing ($2000 per month for a 1 bed!) but that is a result of generations before mine putting their property value ahead of their community and making it impossible to create any meaningful growth to housing inventory. Hopefully that changes soon, the greatest threat to our state’s economy isn’t rising minimum wage or cost of services, its that decades of anti-growth policy have made it prohibitively expensive to even lie your head down at night.
The high price of housing is a direct result of the ‘not here’ residents and elected officials denying development not to their liking.
Those with paid off mortgages now find selling to downsize is more difficult with high interest rates causing buyers to balk.
Sometimes a Council or Board member may not like the color scheme and vote against a project for that reason alone. Prohibitive zoning and complicated, possibly outdated, building codes also hold back projects.
New material that might allow rents or prices to be lower are not “according to Code” and rejected.
Codes written long ago do not allow for new materials, types of fixtures or utilities and ways of building. A ban on gas lines in buildings may backfire in the future.
There is also the water shortage brought home to us all during the recent drought which may continue in the coming year. No one knows if one year of rain means future years will have rain as well.
The state and other elected officials refusal to allow or actually build desalination plants to supply the water needed by an ever growing population is shortsighted and must end. There is no other way to meet California’s water needs.
Such plants could help supply other states with needed water raising money for California.
Desalination plants could provide secure well paying jobs to boost California’s economy.
Desalination, like nuclear power, is the future and we must embrace them now. We cannot base decisions on the past. We must look forward to the future for the young people of today. Let’s not fail them.
High inflation is a lot harder on those on a fixed income. If you are fortunate enough to work for the government, or be in a powerful union which keeps pumping up your wages, inflation is no big deal, but if you are unable to increase your income to keep up with the soaring costs, you have a real problem.
While I agree with Mr. Donegan for those who are retired on fixed incomes (they’ve made their bed, so to speak), the fact is that wages have been outpacing inflation for the last year for ALL workers, not just government employees or union laborers.
https://www.epi.org/blog/average-wages-hav…
https://www.axios.com/2024/02/05/wages-out…
By the way, costs have stopped “soaring” and the Federal Reserve is slated to make an interest rate cut in September.
Of course, I fully expect to be down voted for stating the facts.
Simple way to build affordable housing….build it yourself….the major expense is labor….just buy materials and get after it…
Also…where do we put the 1000000 legal immigrants that come here evey year??….imagine all the virgen land we need to plow under to house the 10 or 12 million illegal aliens that have come here since Biden opened up the bordef…..do we really want the whole country urban areas overrun and turned into a new York or a LA urban style….I think k you democrats would say yes
@Michael Smith: While the average may be rising, that is not ALL employees. The self-employed and people living off of their savings do not get raises, and they are falling behind. The fact that others are enjoying rising incomes does little to help those who do not.
You can try and convince us all how good we have it under Biden, but a trip to the store or gas station tells us otherwise. And with California brainfarts like the rise in the minimum wage of fast food workers, inflation is going to get a lot worse.
Mr. Fink, If you really want to see the quality of your (and all of our) lives drop like a rock just try re-electing the Orange Elephant for another 4 more years. BTO’s song “You Ain’t Seen Nothin Yet” comes to mind. Trump is the REAL DEAL – a wannabe dictator that will own this County if you let it happen. Not an exaggeration, just a fact that is laid out in Project 2025. At that point, you will only wish that inflation is the only issue to resolve. Trump will turn this Country upside down. Just wait & see. BTW – Biden needs to leave the White House as well, the sooner the better because (yes) he is in serious mental decline and now apparently in denial about it. Great combo of candidates we have, don’t you think?