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The Tongva Times

The Tongva Times

The Tongva Times

Wages increase but consumers deal with higher prices 

By Ashley Sanchez | Production Chief 

In the beginning of the COVID-19 pandemic in 2020, and due to the public’s reaction, supply of many goods and materials began to drop, leading to the inflation issues imposing on the nation today. 

   According to the New York Times, as a result of the pandemic, lasting effects of the labor shortage, supply shortages, and rising prices is a key contributor to rising costs. 

   As of February, the United States Labor Department reported strong numbers of jobs following the pandemic and a rise in wages. 

   Yet the increased income is still not enough to combat the high prices that pose the consumer. 

   “Wages are up 5.1% over the past year, which is trailing the pace of inflation,” stated economic analyst Mark Hamrick. “Indeed, surging prices are stealing the show on the minds of consumers.”

   In reports issued by the U.S. Department of Agriculture, food prices for the rest of the year are expected to rise between 2.5% to 3% more. 

   According to a Lending Club report, at the beginning of 2022, 64% of the U.S. population was living paycheck to paycheck, up 3% more than in December of 2021.

   Essentially, the increased cost of living across the nation, especially in states like California and New York, is putting a heavy burden on households posed with the high prices at grocery stores and gas stations. 

   As of March, the monthly increase for the “food-at-home index” is the largest seen in a two year period while the yearly increase is expected to be the largest since 1981. 

   According to Agri-Pulse Communications, “Prices across all the six major grocery store food group indexes increased last month and over the past year. Fruits and vegetables rose 2.3%, their largest monthly increase since March 2010, with fresh fruits increasing 3.7% in the month and vegetables rising 1.3%.”

   Essentially, there is a slow incline of wage growth following the pandemic, but inflation is outpacing the progress. 

   “Americans have seen prices jump for gasoline, oil, electricity and cars, while also creeping up for apparel, food and other commodities.” According to the LA Times, “Overall, consumer prices were 7.5% higher in January than they were a year ago, the biggest increase in forty years easily outpacing the 4.4% growth in average wages.”

   In cities such as San Francisco, New York City, and Los Angeles, the median household income varies from $60,000 to $80,000 a year, when minimum income needed to remain afloat varies from $150,000 to $200,000 a year. 

   “As the economy recovered in 2021,” states economist Paul Sheard, research fellow at Harvard University’s Kennedy School, “demand was able to come back much, much faster than supply was able to meet it.” 

   As inflation increases, it’s still unclear if the United States can expect to see slowed economic growth from the Russian invasion of Ukraine. A large contributor to inflation is supply chain problems caused by the invasion. 

   According to DesertNews, “Russia and Ukraine are large suppliers of some of the world’s [major] food products, such as wheat. Ukraine is also a hub for cargo ships that transport goods to the rest of the world, but the ports have been closed due to the war.”

   It is likely there will be spikes in food and energy prices after the invasion of Ukraine and sharp capital costs will end up challenging the economy in 2022 after a record-setting year. 

   Financial markets reporter Sam Ro stated, “Oil prices have been increasing ever since Russia began threatening to invade Ukraine, with costs after Russia made true on it’s promise. Rising gas prices are hitting Americans at the pump, and the impending ban is likely to make things worse.”

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Wages increase but consumers deal with higher prices