Common Sense: The high cost of living
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Official figures from the government on the cost of living have been growing at less than three percent this year, yet a common experience, including mine, is that the cost of living is going up much faster.
The category growing fastest is transportation which has been growing at an annual rate of 10 percent for the first half of this year, according to the Bureau of Labor Statistics.
This is because gasoline has increased 20 percent, according to the Energy Information Administration.
Surprisingly, this is not because of crude oil price increases, because they have fallen 1 percent in the first half of the year.
Other than that, the fastest rising components are medical care and food, each increasing at a bit less than 3 percent over the first half of the year.
Housing, education and communication have gone up only about 1 percent over the first half of this year; Apparel went up barely at all, and recreation went down slightly.
Inflation is having a greater impact on businesses than consumers. The producer price index, a cost of living index for businesses, went up 11 percent for intermediate goods and 26 percent for crude goods, over the past year.
One way you can have a low official rate of inflation and feel like you are having a tougher time making ends meet is if your wages are not going up as fast as inflation or at all.
This is what has been happening in McNairy County and in the nation as a whole. The average weekly wage for McNairy Countians in December 2010 of $590 actually fell a dollar from a year before.
Nationwide, civilian workers compensation grew at only 2.2 percent over the past year, nearly a percent lower than the rate of inflation.
Another reason many people feel that the official inflation rates lowball the real cost of living is if gas prices, for instance, are going up much faster than their pay, they have less to spend on other things. They feel like their standard of living is not going up, and they are right.
It has been even worse for senior citizens since they have not received a cost of living increase in the past two years.
The official rate of inflation may not necessarily be accurate for small town and rural areas because data is only collected for urban areas.
The consumer price index you see reported on television and in the newspapers is based on an average and will probably only reflect your experience if you buy exactly the same things the mythical average person buys.
(The views expressed in this column are the opinion of the writer and do not necessarily reflect the views of the Independent Appeal or its owner.)
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