US consumers remain unimpressed with this progress, however, because they remember what they were paying for things pre-pandemic. Used car prices are 34% higher, food prices are 26% higher and rent prices are 22% higher than in January 2020, according to our calculations using PCE data.
While these are some of the more extreme examples of recent price increases, the average basket of goods and services that most Americans buy in any given month is 17% more expensive than four years ago.
If you want to know why Americans are bummed out about their purchasing power, just look at this chart about how wages abruptly stopped increasing with productivity 45 years ago. People are accomplishing more than ever before in history and being left with less buying power. In many cases wages don’t even keep pace with inflation because companies pay based on what they can get away with, not what the work is worth.
I could work two hours a day and still get all my tasks done. I could do that, go to my next job, and do another two hours of work and double my income. But because I have to have my butt in a chair in an office eight hours a day on the off chance my boss thinks of something additional for me to do, I’m stuck being four times more inefficient than I need to be.
This is the answer. For 50 years now wages have remained stagnant while productivity has gone up through the roof. We are being robbed decade after decade, and by now claims of “strongest economy” feel like slaps in the face. Many of us are earning more than ever before, yes, but also have less purchasing power than ever before.
Remember that in the 1950s a high school grad could support a family of 4 with a house and car on a single income. That’s how much has been taken from us by the rich and corporations.
Except that doesn’t explain how as soon as there’s a Republican president, people suddenly think the economy is great.