This thought came to me as I was food shopping. So I know there are things that increase the price of certain items (beer, cigarettes, sugar tax – UK) but they also increase with inflation each year like other foods such as bread.
Apparently, the average inflation raise over the last 10 years in the US is 2.37% as of July 2023. So if it is the same in another 10-years, over the space of 20 years inflation would be 4.74%, if we say inflation is the same? And so on and so on. If it continues wouldn’t prices, for say, bread just end up getting higher and higher and be like $10-15+? And as wages don’t rise with inflation the same way foods do fewer and fewer people each decade could afford it?
Now this is just random thoughts I had when shopping and I am not making any comments on any politics. All I wanted to know is, is my thinking true that prices will just go up and up indefinitely decade-on-decade, why or why not? And I am an idiot so imagine I am 5.
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Edit: Went to sleep and woke up to about 300 notifications, thanks for your explanation to a Neanderthal like myself.
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In: 4366
Prices aren’t they only thing that changes, incomes also change over time. Consider the minimum wage in the US:
– 1940 $0.30
– 1950 $0.75
– 1960 $1.00
– 1970 $1.60
– 1980 $3.10
– 1990 $4.25
– 2000 $5.15
– 2010 $7.25
The rate of change in inflation and the rises in minimum wage don’t always match up, so there are times that your buying power shrinks. Right now is a good example, because the Federal minimum wage has stayed the same through some very inflationaryyimes
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