Inflation – How it Hurts

Inflation is taking people’s money for a lot of reasons. Prices have gone up on everything, such as for food, gas, and even clothing. But what is inflation? Inflation is the rate of increase in prices over a given period of time. Inflation can increase the prices of goods and services. Inflation is typically a broad measure, such as the overall increase in prices, or the increase in the cost of living in a country. The most well-known indicator of inflation is the Consumer Price Index (CPI), which measures the percentage change in the price of a basket of goods and services consumed by households.

There are 3 main causes of inflation which are: demand-pull, cost-push, and inflation expectations. There are many disadvantages of inflation. Inflation can reduce the real value of savings, which might particularly effect old people who live on savings. It also makes it harder for families to survive on a fixed income. This can lead to an increase in homelessness and crime. Inflation also has an impact on international trade. Higher inflation leads to lower international competitiveness, leading to fewer exports.

Inflation is really hurting people in our community. Some students reported that their families have been “stressed out” trying to keep up with rent and bills, since household costs have risen. When asked which products they have noticed going up, students reported, “Arizonas are now $1.50, they used to be 99 cents.” Students reported prices increasing on everything from chips, pizza, even McDonalds, “everything is more expensive.”

When asked, will prices go back down, Mr. Harris (Scholar Life coorindator) stated, “it’s unclear whether inflation will go back down. There are a lot of prices which are set due to government systems. Eggs have quadrupled in the past 2 years due to inflation and even COVID. Some items may go back down, like gas. It was at $4.50 a gallon, then went back down due to the people making statements about it. Inflation was at 2% at one point, then at one moment it was at a 9-10% high. At this moment it’s at 6.5% but certain items will reduce in price.” 

At the end of the day we don’t know if prices will go back down, and when that might happen. So for now, the best advice people have is, “save your money. Only spend when you have to. Don’t waste food or other products.”