The Floundering US Economy, the Middle Class, and Inflation Numbers Run Amok

by Tim Imholt

I am a member of the American Middle Class. I have worked very hard to ensure I am in that category. I joined the army, I was honorably discharged, I went to college earning a PhD in Experimental Physics, and I have worked as an engineer for almost a decade.
I can tell you that I have watched the American Middle Class take a beating unlike anything I could have imagined while I labored to earn the skills I have. About ten years ago (maybe longer) there was a change in the attitude towards the American Worker, with some exceptions. Our economy changed, and that caused the change in attitude.

How did that economic shift happen?

What was that economic shift?

Our economy used to be based on manufacturing, building things and then taking those things to market. We lost that edge back in the 1980s when manufacturing shifted to Asia for a variety of reasons. If you are curious about why that happened there are volumes written on the subject.

Then in the 1990s we had the technology boom (and bust) that came along with all of the dot com companies going public (and some rapidly going out of business). Then we had a real estate boom and bust.

Now we have had a ‘jobless recovery,’ and are constantly told the economy is getting better.

Well…is it? Really?

Or have the numbers just been ‘massaged’ to the point where a press release can be put together to make it look like a recovery.

I think it has just been marketed to look that way.

Here is why. I live in the real world. I have a great resume. I also have tried to change jobs for various reasons and been told that I should stay where I am and wait it out. Whatever it is.

So what does the economy really look like to the middle class, the middle class who doesn’t get raises every year (like executives), who doesn’t always get a cost of living increase, but who does see costs go up.

What do I mean by costs?

Here we go…

Ground beef is something we use a lot of in this country. (Somewhere a vegetarian is telling me to eat less of it, and please, stop channeling my wife…I know. But let’s see the argument).

The price of a pound of ground beef is up 11.7% just since April of 2013.

Doubt me? Here is the US Government chart on the matter, extending back to 2004.

 

Price of Ground Beef

That is an approximate doubling since 2010. Yet I see in the news that there is almost no inflation. I guess food doesn’t count.

What else do we, the American Middle Class, use every day?

Fuel comes to mind.

Do you drive to work? Take the kids to school? Take the bus (it runs on fuel), buy things that were shipped to the grocery store?

Yes, I know get a more fuel efficient car…I get it and we did, but you still have to drive it.

 

Since 2010 we have added (give or take) $1 per gallon to gas.  That is roughly a 33% increase.  Has anyone else gotten 33% in raises since 2010?

 

If we just use the ground beef as a line that Middle Class Income would have had to almost double to keep up with the price increases.  In 4 years are you making twice what you did?

 

I know I’m not.

 

What else might really have an impact on our daily lives?

 

Anyone else have kids?

 

Milk is a commonly used thing by all Americans.  Since 2010 milk has gone from $3.18 per gallon to $3.74 per gallon (on average).  That is an 18% increase over 4 years.  That makes it the best of the items I have listed.

 

Now let’s think about what the government has said for inflationary numbers.

 

  • 2010 – 1.64%
  • 2011 – 3.16%
  • 2012 – 2.07%
  • 2013 – 1.47%
  • Total of 8.34%

 

I think the official inflation numbers are broken.

 

I think in the time since 2010 until now I have probably gotten 9% in raises (give or take).

 

One thing I want the reader to ask themselves, and comment on my ranting post is…Do you see the same things I see?  Have costs really gone up far more than the news would have us believe?

 

Is this just a skewed viewpoint or are we really being ‘marketed’ by someone cooking the books?

 

I think we need to stop looking to Washington for answers.  We need to start returning control to the localities.  It worked for us as a Nation for a very long time, and I think, if we do that, lots of these types of issues go away.

 

Why do I think they go away?

 

The causes of inflation come from DC but that is a story for another day, perhaps my post on next Tuesday will cover that topic area.

gas chart