The Rising Cost of Living

Since the start of 2021, inflation, coupled with an insubstantial increase in the median American family income, has caused stress to many people. The current inflation rate sits at 6.2%— the highest it has been since 1990— and the price of certain essential goods, like gas, have risen significantly higher than that.

As of December 18th, 2021, the national average cost of gas stands at $3.31 per gallon, and the average cost of gas per ger gallon in California is $4.67. Compared to one year ago, that’s a
$1.10 increase per gallon, or 33%, on the national level, and $1.48 per gallon, or 46.5%, in California.

As many people drive to work or school every day, gas expenditure is a necessary part of their budgets, and the rise of gas prices forces them to cut funds from other areas, in order to maintain the ability to drive. In a society where public transportation is unreliable and often non-existent, and where many people live several miles from their place of work or school, these people often only have the option to drive themselves daily, to remain employed, or continue their education.

Other options promoted by many to stop people from relying on gas, such as switching to electric cars are also often implausible or impossible, as electric cars cost more to purchase than gas cars, and although owning an electric car may be cheaper in the long run, many people can’t afford to lay out the money to replace their vehicles or to pay the extra amount upfront for an electric car, when they do end up replacing their vehicles.

This increase in gas prices puts strain on many families’ budgets, often forcing them to redirect income from other parts of their budgets or from going to saving. The increased costs, due to inflation, on the rest of the goods these families buy, though often not quite as pronounced adds to financial stress, and makes it difficult for many to continue being able to afford their previous lifestyles.

One might think this inflation wouldn’t be quite so problematic, though, since it would also result in higher salaries. Unfortunately, this has not taken place on a large enough scale to keep the average American family with as much buying power as it had last year. Due in large part to the economic effects of the COVID19 pandemic, the average family income only went up by 1.8% in 2021, which is 5% lower than the inflation rate, and hardly comparable to the rate at which gas prices have gone up.

With the rising cost of living in 2021, and especially the price of gas, many are left worrying about their bills and being forced to adjust their lifestyles. Hopefully, this surge of inflation will slow, and incomes will rise to keep up with it, but in the meantime, many are forced to make difficult decisions regarding their budgets.

Sources:
https://www.huduser.gov/portal/datasets/il/il21/Medians2021.pdf
https://gasprices.aaa.com/
https://tradingeconomics.com/united-states/inflation-cpi#:~:text=Excluding%20volatile%20food%20and%20energy,highest%20since%20June%20of%201991.&text=The%20annual%20inflation%20rate%20in%20the%20US%20surged%20to%206.2,and%20above%20forecasts%20of%205.8%25.
https://www.foxla.com/news/california-gas-prices-record-high

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