Recently the New York Times did an investigation into how the Department of Labor Statistics calculates inflation and average prices for basic goods. It is the estimates of the DLS that determines if the Federal Reserve will raise or lower interest rates. In other words, the formulas used by the DLS are of great importance to the federal government in determining the health of the U.S. Economy.
However, some have questioned whether their estimates truly reflect the reality of inflation and standard of living for the average American.
Additionally, take some time to check out the very in-depth chart that examines the increase and decreases in common goods and services. What is striking is that while basic foods have increased significantly in the past year: bread (14.7%), milk (13.3%), cheese (12.5%), and eggs (29.9%), the cost of entertainment has either been stagnant or significantly decreased: TV’s (-18.3%), computers (-12.0%), and video equipment (11.3%).
What can be drawn from this is that the things that most low-to-moderate income households spend their money on have increased significantly, while the things which are generally more affordable for higher income households are declining in price. However, the cost of basic necessities affects everyone, yet it is lower-income households who are more vulnerable when prices increase for these staples, putting further pressure on already tight budgets. Just as a reminder, the welfare grant has not been raised since 1990.
Finally, as Food Stamps gets evaluated during the debates over the Farm Bill re-authorization in congress, the Food Research and Action Center, as well as a number of other hunger advocates, are calling for a full indexing for inflation in the Food Stamp program. Though the Food Stamp program gets an increase every year for the “cost of living”, many advocates note that the cost of living adjustment has not kept pace with the inflation in food prices that we are now coming to see.
