High Inflation: Whats Inside A Student’s Market Basket?

What is inflation?

As described by the Bureau of Labor Statistics, inflation is “the overall general upward price movement of goods and services in an economy” (BLS). In recent months, the average inflation rate in the United States has reached record highs of 6.2%.  This generally means that when you buy things, they will cost more and when you save money, that money will be worth less. 

Why is it different for students?

The Average inflation rate is measured using the CPI (consumer price index) which tracks prices in a market basket of goods. The CPI’s market basket tracks housing, apparel, motor fuel, transportation, medical care, recreation, education and communication, food and beverages, and other goods and services. However, a focus group responded that they spend 75% of their weekly expenses on food, about 12.5% on clothes, and the rest on gas (12.5%).  Since the inflation rate for these three product categories is 10.67% (adjusted annually), students are seeing more of a price change than the average AmericanAmerican consumer.

How does high inflation affect students?

High inflation means that students need to spend more to get less, which decreases standard of living for students. When polled, 80% of the focus group said they were not in the labor force and out of the 20%, none of the students responded that they make above the living wage, $17.74 in mass (MIT). Seeing as wages are not increasing for students at the same pace as inflation, students at Waltham are able to buy less now that they have been able to in a long time. 

The Bottom Line: 

High inflation in the United States economy is a problem for lots of Americans however, highschools are more impacted by those price changes than most because their market basket is smaller. 

Are you a student at WHS interested in finance? Join the WHS Finacial litaracy Club on thursdays 2:00-2:30 in room 274! See you there!

Bibliography

BLS. “Inflation.” US Bureau of Labor Statistics Latest Numbers, 2021, https://www.bls.gov/. Accessed 16 November 2021.

MIT “Living Wage Calculation for Massachusetts.” Living Wage Calculator, 2021, https://livingwage.mit.edu/states/25. Accessed 16 November 2021.