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 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. They also need adequate food to feed the family, serviceable clothing, and reliable transportation.
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” these 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. … 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 considered fast food 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 new leadership in California and at the national level.
Ron Fink writes to the Sun from Lompoc. Send a letter for publication to letters@santamariasun.com.
This article appears in Jun 13-23, 2024.
“Is my family’s standard of living any better than it was four years ago?”
Are you kidding me?
During the second quarter of 2020 (four years ago), the U.S. economy retracted by over $2 trillion. 14.6 million private sector jobs were lost. Most of the economy was shut down. Tens of thousands of Americans were dying from COVID. In fact, the life expectancy for the average American dropped by nearly two years in 2020, Trump’s last full year in office.
Trump’s response to this cataclysm was to debate government scientists about a wide variety of issues. At one point, he told us that we should drink bleach or shine a UV light down our throat to stop the virus. He lauded hydroxychloroquine and ivermectin, both shown to be ineffective against COVID in tests.
At another point, the president himself almost died from COVID, saved only by the intense response to the virus by the best physicians in the world (something most of us are not privy to).
Moreover, Trump was partially responsible for the pandemic, having ignored warnings from the Obama administration about viruses coming from Asia and defunding the infectious disease team that was tracking such things and were on the ground in China before they were defunded in 2018.
Trump defunded several scientific teams so that the government could give Trump and his wealthy billionaire cronies a multi-trillion dollar tax cut (which added $8.1 trillion to the national debt at a time when we should have been paying down debt).
Today, wages are advancing faster than inflation, Americans are traveling more than they ever have, prescription drug prices have come down and the nation is finally rebuilding its tattered infrastructure.
As for me personally, my investment portfolio has seen nothing but growth since Joe Biden came into office, with the Dow Jones Industrial Average up more than 25% in the last four years.
Do we really want to return to the chaos of Donald Trump, with constant headlines about the latest outrageous thing he said: kowtowing to Putin in Helsinki, calling white supremacists “very fine people,” labeling our nation’s soldiers as “suckers” and “losers” or his contention that most of the immigrants who come to America are from “shithole countries.”
Really Ron, that’s the nation you want to live in?