Inflation is the measure of price increases year over year, typically based on a “basket” of goods and services consumed by “average” Americans. Here is the rub: Average Americans may fit that basket of goods, but older Americans have their own “basket” of goods. Arguably, Biden’s inflation hits seniors harder. No one will say so, but Biden’s inflation is worse on seniors.
The leading measure of inflation is the “Consumer Price Index” (CPI) which is put together by the Bureau of Labor Statistics. The CPI uses data collected, in turn, from the “Consumer Expenditures Survey.” This all may seem useless background information, but it is not. Do not glaze over, just follow me.
Here is why all this matters. What does the “Consumer Expenditures Survey” measure? It measures the cost of clothes, education, entertainment, transportation, make-up. Granted, seniors use these things, but do they use them as much as younger people?
Another factor figures into official “inflation” numbers, just like official poll-taking for political predicting. The CPI is based exclusively – by the index’s own admission – on “urban” consumers. Rural consumer habits, those living with rural families, in rural settings, are not measured. The index, for example, officially excludes “farm families” and those in the “armed services,” to mention a few.
Likewise, how are items “weighted?” CPI does not consider important demographic trends, including percentage of the population that is older, younger, and trends in purchasing. Nor does it take account of spending habits unless a household earner is employed 37 weeks a year. What does that do to single, non-earning pensioners?
Making matters less representative again, a time lag exists between expenditures in the survey and CPI estimates of inflation, a lag of about two years. So, what is being measured is often two years old, even if habits tied to gas, food, rent, energy, and COVID masks change.
What does all this mean? It means the basket of goods being measured affects what inflation rates really are for a set population, like seniors.
So, what do we know about the real inflation rate for seniors? Officially, the government says inflation is 8.5 percent, bad enough. So, everything is at least 8.5 percent more expensive than last year. But what if the “basket” of goods and services consumed by those over 50 is different?
What if seniors tend to pay a higher percentage of their life savings for things like rent (or housing costs), used cars, food, winter heating costs, and medicine? That affects the real inflation rate seniors are now paying, year over year.
So, what are the numbers? For starters, the US economy has suffered a shocking 26 percent increase in rental and non-mortgage housing costs in the last ear. How many seniors – even in urban areas – pay rent, are in assisted living, or in a community that does not involve owning outright? They are obviously more affected by Biden’s inflation than fixed rate homeowners.
Next, look at food, used cars (versus new), energy – all up markedly in just one year, major impact on rural and older populations, versus city dwellers and younger groups. Food nationally is up 11 percent (13 percent in June), rising with costs of fertilizer, harvest, transport, and storage. Cost of used cars (and other equipment) is up 43 percent. Energy is up 33 percent, with winter coming. Health care, with 4.8 percent inflation in early 2022, may go to eight percent, double-digit increases in premiums for 2023 under the “Affordable Health Act.” Who does that hit hardest?
Net-net, a reality check is overdue. Unaccounted for – and unacknowledged by Biden – is the rising, invisible tax inflation imposes on the nation, especially seniors on fixed incomes, with variable rate credit, little cushion. The “basket of goods” specific to seniors, in many cases, is hardest it. Like it or not, Biden’s unnecessary inflation hits seniors hard.