Inflation continues to rise faster than wage growth. It has been decades since the last inflation hike and many people were not even alive the last time the cost of living skyrocketed. In their quarterly report to Colorado’s Joint Budget Committee, the Legislative Council and Governor’s Office of State Planning and Budgeting highlighted the fact that consumer prices outpaced the national average at 7.9%. That means prices were higher in January of this year than they were in January of 2021, the highest increase in 40 years. According to Legislative Council’s forecast, “the risk of escalating conflict in the war in Ukraine, potential for additional pandemic-induced supply chain disruptions, and the momentum of a wage-price spiral, each pose significant upside risks to this inflation forecast”. What does this mean for you and your family as a Coloradoan? How can you combat inflation in your everyday life?
How Inflation Impacts Daily Life
Wage growth was strong in 2021 as the labor shortage caused businesses to compete for workers by raising wages and salaries faster than ever. Now, inflation causes prices to rise continuously, overtaking and surpassing the growth accomplished by wages in 2021. The Denver Post reported inflation in the energy and transportation sectors was over 21%, in each case. As far as food, proteins like meat, fish, poultry, and eggs are up nearly 13%. Fruits, vegetables, cereals, and bakery items are up almost 9%. Dairy and related products cost about 5% more. Housing, apparel, and other things needed for daily living have seen price inflation higher in Denver than the national average. These numbers were reported before Russia invaded Ukraine causing rising gas prices. The rise in gas prices also contributes to inflation because of the higher cost to deliver items.
A Quinnipiac University Poll conducted between March 10 and 14, found that nearly two-thirds of Americans say that the price of gasoline has been a serious problem for their family. More than 4 out of every 10 families have cut back significantly on household spending because of the recent rise in gas prices. All this talk of rising pricing can make one wonder: what about my family in the future? How will this affect them? Governor Polis is hopeful about Colorado’s future, stating that “Colorado is recovering faster, stronger, and ahead of other states. The forecast shows that despite nationwide inflation and supply chain headwinds, Colorado’s economy will likely continue to grow stronger, with elevated job growth. The state’s innovative work creating and strengthening programs that help connect job seekers to employers has provided real relief for Coloradans, as Colorado’s unemployment rate continues to decline.” The people of the United States are no strangers to economic crises; we have faced many such as the dot-com crisis and the Great Recession. After those, we saw exponential growth until COVID-19. We can only hope that once inflation hits its peak it will hopefully fall, leading to a time of economic growth.
Inflation Impacts Democrats Current Standing
Inflation stems from many different places. Which place has the higher impact, depends on who you ask. Democrats will blame it on the pandemic and corporate America while Republicans will blame the Biden administration’s energy policies and pandemic assistance for putting too much money into the economy. Before this current period of inflation, we saw an exponential growth in Democrats taking public offices. Currently, Biden and the rest of the Democrats find themselves in a precarious position. Low presidential favorability rates and high inflation will likely benefit Republicans nationally by leading to significant Democratic losses in November. National polls show voters blame the Biden administration for higher gas prices. A Rasmussen poll released this week found that 64% of voters believe Biden’s administration has been the major catalyst for increased inflation. Here in Colorado, where Democrats control virtually every majority and office in both the state Senate and House, Republicans’ potential win this November is the silver lining of the current economic situation.
As Inflation gets higher, prices continue to rise, and families continue to struggle to get by in everyday life. As Americans, we have to stick together and cling to the light at the end of the tunnel. Republicans will hopefully return to the majority which will likely set off a chain of events that allow for economic growth. Until then, you can try saving money by taking public transportation when you’re able, borrowing what you can, and planning your week of meals to cook at home ahead of time. Have you had to cut back financially due to inflation? How has your experience with inflation affected your political outlook?
Written by: Erinn Malloy