Here’s How Much ‘Bidenflation’ Is Really Taking Out Of Your Bank Account
the Biden White House is counting on you to glance past the record-breaking bad inflation numbers that keep revealing the dangers of Congress’s high-dollar spending. You might give only a cursory look to a list of percentages from the Labor Department, but apply those numbers to your own paycheck, savings, and expenses, and the numbers start to sound a lot bigger and more painful.
The average annual wage earned by American workers was $53,383 for the year 2020, according to the Social Security Administration. Take 7.9 percent of that — the year-over-year inflation rate for February — and you have $4,217.
So, for that average American salary to maintain the same value it had a year ago, it would have to increase by just over $4,200; if it hasn’t, inflation has cost you roughly $4,200 in depreciation of your salary’s value.
To compare, the average annual pay raise employees are expected to receive in 2022 is 3.4 percent — less than half of the past year’s inflation rate. Using the previous average wage, even if you got a 3.4 percent raise (adding $1,815 to your yearly income), you’d still be down more than $2,400. And that’s with an average raise that’s already higher than pay bumps in previous years; in 2021, the average employer gave out 2.8 percent raises.
Not only does inflation mean you’re effectively getting paid less, it also means that in many sectors, you have to spend even more of those dollars to purchase the same amount and quality of goods. Some goods, like the cost of food, have a comparable rate of inflation to the overall rate of 7.9 percent, but other commodities have jumped far more drastically.
According to the Bureau of Labor Statistics, the cost of fuel oil in the past year jumped 43.6 percent from February 2021 to February 2022.
In February 2021, the cost of gas was approximately $2.50 per gallon. Divide that by the average American’s vehicle mileage of 24 miles per gallon and multiply by the average 14,263 Americans drove in 2019, and that’s roughly $1,486 spent on fuel in a year. (2020 and 2021 saw skewed averages due to politicians’ Covid lockdowns, so 2019 is a more reliable average.) The cost of gasoline fluctuates over the course of a year, of course, but the static February number works for the purpose of comparison.
If your car’s mileage and the number of miles you travel stay the same, what can you expect 43.6 percent inflation of gas prices to do to your wallet? Multiply that percentage by the rough annual fuel cost of $1,486, and at this rate you’re going to be spending nearly $650 more to keep your tank filled over the year.
Rising gas prices aren’t going to make up your largest jump in expenses, either. Housing is by far most Americans’ biggest expense, and the rising costs of rents and mortgages in the past year have also outpaced the already record-breaking overall inflation rate.
According to a Redfin analysis, February saw a 15 percent year-over-year increase in asking rent, and a 31 percent jump in the national homebuyers’ median monthly mortgage rate.
Monthly asking rent jumped to $1,901, compared to $1,646 last February. Just multiply that $255 difference by 12 months and you’re spending an extra $3,060 on rent over one year.
Mortgage payments rose even more dramatically, from $1,311 in February 2021 to $1,716 in February of this year. That $405 difference adds up to spending an extra $4,860 for the same mortgage, thanks to the rapid inflation of the past year.
Additionally, Americans in the market to buy used vehicles have also seen a far higher price spike than the overall inflation rate in the past year, at a whopping 41.2 percent. The Kelley Blue Book reported the average used car selling for $27,608 last month (a number likely higher than the average used car sticker price, as Americans look to offset inflation by buying cheaper cars).
If that number is 41.2 percent higher than a year ago, that means you’d have spent $8,056 more on the same car last month than in February 2021. The inflation rate for new vehicles, while not as high, has also risen faster than the overall inflation rate, at 12.4 percent.
With all of these rising costs and depreciating wages, thank goodness for savings, right? That’s another thing; the average American who had savings had $41,600 put away in 2019. If you had a similar amount saved away in February 2021, the value depreciation caused by the past year’s 7.9 percent inflation rate means your savings have been drained of $3,286 in value in just one year.
Just looking at housing and fuel costs — not counting utility bills, which have also outpaced overall inflation, or any other commodities and services — you might find yourself spending an extra $3,500 to $5,500 in a year, while your salary depreciates by about the same amount and your savings likewise see a value loss of $3,000 and change.
Near-8 percent inflation already sounds high, but look at the actual drain on your paycheck and simultaneous spike in your expenses, and that number suddenly feels a whole lot higher.
https://thefederalist.com/2022/03/29...-bank-account/
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