A rise in consumer prices has some people in Pennsylvania worried about whether they’ll be able to afford the cost of food soon.
“I feel like inflation is through the roof and I’m terrified,” a Pennsylvania resident said, according to Real Clear Politics. “I can hardly afford the same food I bought a year ago.”
Consumer prices, which include the cost of food, rose at a 5% pace year-over-year in May. That was followed by increases up to 5.4% in June and July. Though the increase slowed to 5.3% in August, this is the fastest that inflation has risen in 13 years, according to CNBC.
Economists predict the factors causing inflation are temporary and should ease as the economy slowly improves.
The rise of consumer prices has had an impact on “real wages,” which measures income after accounting for inflation. Real wages dropped by nearly 2%, on average, in June compared with 2020.
“In June, consumer prices jumped 0.9% from the previous month and 5.4% over the past year – the biggest increase in 13 years, the Labor Department said,” Fox Business reports. Average hourly earnings in July 2021 were 4% higher than July 2020 and 0.4% higher than June 2021.
Some believe government spending during the pandemic has contributed to the rise in consumer goods.
Adam Millsap writes for Forbes that government subsidies increased demand.
“The result is higher prices that disproportionately harm the working poor and middle class,” Millsap said. “The companies with subsidized offerings get richer, while these higher prices increase demand for larger subsidies. The cycle repeats, and costs head skyward. Subsidies are why the average cost of attending a four-year college or university rose by 497% between 1986 and 2018, more than twice the rate of inflation. A substantial body of research shows that universities respond to increases in state and federal subsidies by cutting their own aid, raising tuition or fees, or all the above. This forces many middle-class students and families to take on debt to pay for school.”
