If my rent goes from 1000 a month to 1500 a month from one year to the next, that’s 50% inflation. If it stays at that higher amount for a full year afterwards, that’s 0% inflation. But that doesn’t mean I’m suddenly living the good life. I just went a full year with my rent way higher than I used to pay, and my income did not increase proportionally. I am able to save less (if at all), can’t afford things I used to be able to, and feel just a little more desperate every month.
That’s why looking at year-over-year inflation is meaningless. It doesn’t reflect the long-term hardships that come from a sudden price spike that never goes back down.
Seeing as the government considers deflation to be not an option, the only practical fix to the crisis is a general wage gain across the entire workforce equivalent to the inflation we’ve been seeing the past couple of years. More, really, seeing as inequality had been growing prior to the pandemic as well. Prices are not going to go down. And if deflation is threatening to occur, the government will move heaven and earth to stop that from happening. Ergo, wages need to go up.
Or maybe we could move away from this irrational system, but one step at a time, I suppose.
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