Inflation isn’t always bad for the economy—but usually, it is a sign that things are about to get worse.
Inflation occurs when there is an overall increase in the prices of goods and services, causing the purchasing power of money to fall. The causes and effects of inflation wind up in a negative cycle that increases the cost of living for individuals, which can lower their quality of life.
Drivers Of Inflation
One of the drivers of inflation is a rise in the cost of raw materials and wages while demand remains steady. The increase in the costs of production is reflected in the increased prices of the final goods.
Generally speaking, raw materials are commodities, which can become volatile in price due to geopolitical unrest, natural disasters, epidemics, seasonality, market attitudes, and unpredictable events that affect supply and demand.
Another driver of inflation is a rise in demand; an increased willingness or desire by consumers to pay more or buy more of an available supply of goods and services results in increased prices.
The Truth About Wages
Fuel, groceries, electricity, and water are just a few basic necessities that people need in their daily lives in order to survive and work. On average, when the increase in the prices of goods outpaces the increase in wages, people find themselves in a cost of living crisis.
A nominal wage is the amount of money a worker earns for a specific amount of labor within a specified timeframe. However, a real wage measures the value of their wages in the context of economic changes such as inflation.
While the dollar amount on the paycheques of workers may increase year-over-year, nominal wages do not tell the full story. When inflation increases their cost of living more than their wages have increased, their real wages effectively decrease; individuals are left with lower purchasing power despite higher nominal wages.
Unfortunately, this has been a sad reality for many in our town as well as people living in many parts of the United States.
Can Green Technology Save Us?
Employers can help their employees during periods of inflation by enhancing perks and benefits programs as well as reducing the cost of going to work.
While many businesses cannot operate remotely, businesses that can distribute their operations should allow their employees to work from home. In addition to giving employees more time and flexibility on workdays, working from home allows employees to save time and money by not having to commute.
Lowering emissions benefits the planet immensely. Software such as Zoom Video Conferencing and Google Suite enables companies of all sizes to collaborate productively while being location-independent.
Energy-efficient appliances may also help people manage rising costs of living. Many homeowners in San Diego are investing Water Heater Replacement to improve their life at home.
A typical residential hot water heater should last between six and 12 years. Electric hot water heaters can last two to three years longer than gas water heaters because of cleaner operation and more efficient design.“Best Water Heaters”, Forbes
California Plumbing has been praised for its “great service and fair price”, which is what every property owner needs, especially in times like these.Read Chaniel L.‘s review of California Plumbing on Yelp
You can give California Plumbing a call today.
455 Willowcrest Way, Chula Vista, CA 91910